Customer Experience in the financial sector: Trends and strategies for better customer loyalty

In today’s fast-paced financial landscape, delivering exceptional customer experience in the financial sector is no longer optional, it’s a defining factor for loyalty and growth. From seamless digital services to personalised advice, banks and financial institutions must adapt to ever-changing client expectations to stay competitive and build lasting relationships.

Delivering an outstanding customer experience (CX) has never been more critical. Banks and financial services providers that consistently offer positive experiences tend to earn more recommendations, while clients are also more willing to explore new products and services.

Several factors shape CX in the financial sector, from a competitive market environment to rapid technological advances. By keeping a close eye on current trends, financial institutions can gain valuable insights to tailor their offerings to client needs, implement timely improvements, and ultimately boost satisfaction and loyalty, and prevent churn.

The current state of customer experience in the financial sector

In recent years, geopolitical uncertainty, economic volatility, and growing regulatory demands have had a significant impact on customer experience in the financial sector. These developments have required banks and financial service providers to adapt quickly to evolving expectations.

Clients now expect seamless digital services, enhanced security, and financial products tailored to their individual needs. Comparison websites make it easier than ever for clients to switch providers, meaning banks must find the right balance between meeting customer expectations, maintaining operational efficiency, and embracing technological innovation.

Balance in digitalisation for sustainable customer relationships

Traditional banks, such as high street and regional institutions, are associated with trust and personal connections. However, the costs of branches and staff remain high, while the trend towards online services continues to grow, requiring automation, flexibility, and the use of artificial intelligence.

Neo-banks, including names like Revolut, Monzo, and Starling, focus on a fully digital presence, fast processes, and streamlined user interfaces. They primarily appeal to younger, digitally savvy customers. Yet, building trust that goes beyond the app remains essential.

Customers have largely embraced digital banks due to the convenience they offer, yet many still do not want to give up personal contact entirely. Despite the growing use of digital channels, access to personal support remains important for more complex issues. To meet the needs of all customer groups, a hybrid approach that combines online and offline services is therefore essential.

Companies that achieve this balance gain a clear competitive advantage. Traditional elements, such as physical branches, are becoming less central, making customer-focused, dynamic relationship management crucial in delivering genuine value with every interaction.

Analysing customer experience in real time

Customers increasingly expect real-time support, whether for advice or transactions. Many UK customers, particularly younger ones, now favour chat based interactions over more traditional channels. Short waiting times for telephone support and prompt email responses are also highly valued.

Banks now face the challenge of not only providing direct support but also implementing technologies for real-time payments. DORA compliance and its impact on secure customer interactions is an important consideration in this process. In the sensitive banking environment, data security is crucial. Compliance with regulations such as DORA and clear data protection agreements with internal stakeholders are essential to build trust in new technologies and AI solutions.

Customer experience for direct banks and non-bank providers

Modern customers are changing their habits fundamentally, including their choice of financial provider. According to the FCA’s Financial Lives 2024 survey, about 14 % of UK adults now hold an account with a digital bank. While high street banks remain dominant, with traditional “Big 4” banks holding more than 70 % of the current account market, challenger and neobanks are steadily gaining ground.

For example, a recent Finextra report notes that 9 % of UK adults hold their main debit card with a neobank, and the proportion of people using a digital-only bank has risen from 16 % in 2018 to 50 % in 2024, according to RFI Global.

This shift also includes the rise of non-bank providers, companies that traditionally were not part of the financial sector but now offer similar services and are increasingly serious competitors. The UK financial landscape is evolving rapidly, and banks must adapt to remain relevant.

Personalised offerings and self-service alternatives

Self-service options and tailored offerings have become essential in the financial sector. Research from Capco highlights that a large majority of customers consider personalisation an important part of their banking experience. This aligns well with current behaviour in the UK, where customers are increasingly willing to use financial apps and share their data when they receive clear value in return.

Customers in the UK are also becoming more independent in how they manage financial tasks. According to the FCA’s Financial Lives survey, around 75% of adults use mobile banking and 69% use online banking (source referenced in the paragraph above). The continued rise of open banking supports this trend further, with 13.3 million active open banking users recorded in early 2025. These figures show just how important it is for banks to provide effective and reliable self-service channels that genuinely make everyday banking easier.

High quality support material plays a crucial role here. Articles and videos should be easy to find, search optimised and written in clear language so that customers can quickly understand both the issue and its solution. The ability to book or cancel services digitally is another key expectation. Today’s customers do not want to handle every transaction in person or over the phone, and banks that offer intuitive self-service journeys can significantly strengthen the overall customer experience.

Practical tips for Customer Experience in the financial sector

Below, we outline practical measures to optimise customer experience that have proven particularly effective in the financial sector. These approaches are often seen as low-hanging fruit – solutions that are straightforward to implement and can deliver noticeable results quickly.

Personalisation of digital and personal interactions

Strong personalisation is a key factor in the success of banks. Customers are willing to pay more for excellent service, which increases the pressure on financial providers to deliver tailored experiences. Research shows that 50% of customers stop using a financial service after a negative experience. Digital personalisation, from customised notifications to interactions with chatbots, plays a crucial role in this.

Chatbots are an effective way to provide fast and personalised support. When used correctly, they can enhance brand perception and significantly improve customer experience. However, striking the right balance between digital and personal interactions remains essential. While digital solutions make services more efficient, many customers still value personal support and appreciate the option to visit a branch.

Giving customers a voice – anytime, anywhere

Today’s customers expect seamless two-way communication with financial providers and want to feel heard and supported at all times. An omnichannel approach to feedback is therefore essential, as it allows customers to raise their concerns through a variety of channels, whether via website or app chat, social media, email, or telephone. Many institutions still rely on outdated feedback systems, manual surveys, and open-text responses without AI-driven analysis.

It is important to encourage interactive engagement to fully realise the value of feedback. This goes beyond responding directly to surveys and includes incorporating feedback from external or indirect sources. Modern analytics tools make it possible to integrate and analyse feedback from multiple channels, providing valuable insights into customer needs and expectations. These insights enable organisations to strategically and sustainably adjust their customer experience initiatives.

Optimising customer service in real time

Increasingly, industry leaders recognise that non-traditional providers pose a real challenge to established banks. A common issue among traditional financial institutions is the lack of real-time support. Many customers expect immediate assistance, yet not all banks are able to provide this service, or its implementation is delayed by lengthy approval processes.

The introduction of real-time technologies, such as chatbots, is a promising approach to enhancing customer experience. It remains essential to maintain consistent, high-quality support across all communication channels. In addition, tools for measuring customer satisfaction can provide valuable insights to optimise service and improve overall experience.

Proactive engagement in financial advisory

Many customers are increasingly concerned about their financial future, particularly given economic uncertainties in recent years. Banks can help address this by offering proactive financial advice and management. This allows customers to receive support early on and make more informed financial decisions.

Younger generations, in particular, are seeking additional guidance in financial matters. This presents an opportunity for banks to build trust and enhance the customer experience through exceptional service and personalised advisory support.

Artificial intelligence with a forward-looking focus

Artificial intelligence already has a firm place in many banks, and the technology continues to evolve. AI offers numerous opportunities to enhance the customer journey by delivering personalised offers, simplifying payments, and providing valuable insights into customer behaviour.

The integration of AI analytics has enormous potential to optimise processes. The aim is not to replace staff but to increase their efficiency, enabling banks to provide faster, more personalised, and higher-quality service.

Ensuring optimal technical performance

Providing excellent customer service remains a central goal for many banks. While many institutions believe they offer a high-quality customer experience, UK data suggests customers often perceive it differently. For example, only a small proportion of UK bank customers describe the service they receive as excellent, and almost half characterise their experiences as unremarkable.

Many financial institutions continue to face technical challenges, such as inadequate mobile optimisation and slow onboarding processes. Some banks have successfully implemented shorter onboarding journeys, which are particularly well received by younger customers. Through continuous improvements to mobile app functionality and regular updates, banks can exceed customer expectations and create a sustainable, positive experience.

The biggest challenges in Customer Experience in the financial sector

Offering online alternatives and personalised services is essential for stronger customer retention. However, banks and financial providers face several challenges in achieving this, including limited understanding of their customers’ needs, as discussed in why banks struggle to understand their customers:

Regulatory changes

Compliance with legal requirements, particularly regarding data protection and GDPR, can make the implementation of digital solutions more challenging. Banks must adhere to strict security protocols to safeguard customer privacy and data. This often entails significant investments in data protection technologies, network upgrades, and external certifications necessary to meet legal obligations.

Low customer loyalty

The implementation of personalised offerings can fail if customer engagement remains low. This often indicates that customer needs are not fully understood. An improved feedback solution, for example, can help address this issue and make personalisation more effective.

Rigid internal structures

A lack of internal perspective and inflexible structures can also impact customer experience. Banks that are willing to adjust their processes and organisational structures to respond more quickly to customer needs are likely to achieve better results in the long term.

Summary: CX in banking and financial sector for long-term success

A well-designed customer experience in the financial sector is essential for remaining competitive and building strong customer loyalty. Today, customers expect not only digital solutions but also tailored offerings and personal service for complex matters. To meet these needs, banks must strike a balance between digital and personal interactions and continuously adapt their services to evolving customer expectations. Technologies such as AI and big data play a key role, enabling personalised experiences and providing valuable insights.

Challenges such as regulatory requirements and adapting to new market developments demand that banks continually adjust their strategies. Only through a holistic approach that considers both digital transformation and the human element can banks deliver an outstanding customer experience over the long term. By placing the customer at the centre, offering proactive advice, and constantly optimising service, customer experience becomes not only a differentiator but also a decisive factor for sustainable success.