Banks are beginning  to recognize that they need to rethink customer experience, and they’re taking cues from startups to do so. 

Vendors like eGain and Backbase, who work with banks, said at Bank Innovation Ignite on Tuesday that their customers are increasingly taking a startup-inspired approach to the user experience.

Vince Bezemer, head of strategy at software solution company Backbase, said a better customer experience comes with knowing the customer. He used millennials as an example of a customer base comfortable with a high level of personalization.

Bezemer said bottlenecks, like a lengthy application process for a loan or to open a new account at a financial institution, often lead customers to leave their banks and become disengaged. He suggested using more ecosystem-type solutions to allow customers to more easily access products and services. In particular, he emphasized that allowing customers to easily use multiple products and services in one place is a goal to which institutions should aspire.

Evan Siegel, vice president of financial services and AI at eGain, a cloud solutions company, also highlighted that knowledge of customers and their future goals should shape customer experiences. Machine learning and AI are important enablers, but the financial institutions have to be clear about which customers they want to serve.

“It’s homeownership, putting your kid through college, retiring safely; it’s not just the paycheck-to-paycheck crowd,” Siegel said. “How do we work with these people to tackle all these challenges? If you as a bank or a fintech can build that deeper relationship with them, you will have that customer for life.” 

See also: US Bank’s Venturo: New product ideas need to boost bank customer experience

Meanwhile, Steph Reiley, director of product at BBVA-owned Simple Finance, emphasized the importance of a human-digital approach. For customers interacting with Simple’s digital banking and personal finance management platforms, Reiley said the experience is designed to emphasize there is a human behind the technology.

“I’m a big believer in real-time chat and, in particular, virtual chat,” Reiley said. “I think that combination of tech and human beings is the magic formula for newer customers.”

Mike McCrary, first vice president of Lincoln Savings Bank’s fintech partnership arm LSBX, added that automation can only help banks to a certain extent. There are instances when customers need human intervention, often because of a stressful, critical situation. Banks can better serve customers if they understand the driving forces behind their financial behaviors.

“Algorithmic decision presentment and data collection solve a portion of [problems],” McCrary said. “The element that leaves out is, ‘How is the person feeling?'”

That’s not to say that financial institutions haven’t focused on customer experience. A 2019 survey from Forrester Research outlined that, although some big banks lag in customer experience, some institutions are starting to improve. 

Forrester’s survey of more than 100,000 U.S. consumers rated Navy Federal as the best multichannel bank and USAA as the best digital-only bank for customer experience. According to Alyson Clarke, principal analyst at Forrester, the two financial institutions set themselves apart because they’ve nurtured a deep understanding of their client base.

 “There’s a real kind of empathy there; other firms could do the same thing, but they’re too busy trying to drive sales,” Clarke said.

Banking Automation Summit, which takes place from June 1-2 in Miami, is a unique opportunity to share insights, trends, strategies and best practices on back-office automation in financial services with the industry’s leading practitioners.