Five Big Customer Experience (CX) Transformations in Fintech in 2023

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The banking sector has undergone a sudden digital transition over the last few years. While many banks are still coping with the change, staying updated with the upcoming CX transformations is essential to drive growth in 2023.

FinTechs focus on streamlining operations, enhancing CX, and driving maximum ROI. They build tech-based platforms to improve processes and minimize efforts. By staying updated with the CX transformations, banks can meet business goals, understand customer demands, and upgrade business operations.

1. The Rise of Banking-as-a-service (BaaS)

As banking becomes more mobile-centric, banks are making efforts to adopt BaaS constantly.  As per a recent report by Gartner, “Hype Cycle for Digital Banking Transformation, 2023,”

  • 30% of banks with greater than USD 1 billion in assets will launch BaaS for new revenue by the end of 2024
  • But half will not meet targeted revenue expectations.

In 2023, the rising demands and the need for open banking will be the key drivers of BaaS adoption. BaaS enables FinTechs to use the traditional bank’s experience, expertise, and infrastructure to offer robust financial products and services.

Moreover, open banking allows customers to share their financial data with third-party providers securely. This helps them seek tailored financial products and services.

Here, BaaS is critical as it enables FinTechs to securely access banking data and infrastructure. Furthermore, it allows banks to reach a wider customer base by offering banking services through digital channels.

Banks can offer investment advice and wealth management through digital channels that may not be available via traditional branches.

BaaS also helps minimize costs by offering services through digital channels rather than physical branches- which can be costly. This increases profitability and will help banks become more competitive.

In 2023, digital banking will continue to grow as a service offering banks accessible and visually enriched transaction data.

2. Uplifting Personalized Customer Services

Customers often expect valuable insight and advice from their banks. But, it is hard to offer sound financial advice when banks are unaware of customers’ goals or priorities.

Personalized customer service enables banks to deliver a valuable service to a customer based on personal experiences and using historical customer data. It also helps build trust and drive revenue.

Furthermore, banks are eager to engage with consumers using tech to boost personalization. The metaverse, AI, and ML use cases have enabled banks to reach customers via robust, personalized customer service.

Techs like these create a whole new level of online experiences, like

  • Delivering quick services
  • Offering customized financial solutions
  • Reaching out to potential audiences through personalized marketing strategies.

Overall, tailored customer services will take the top spot in FinTech priorities in the future to address diverse customer demands.

Here are a few developments for banks to consider to deliver tailored customer service.

  • Chatbots

AI-driven bots offer personalized support and assistance to customers in real-time through messaging apps or voice assistants.

  • Biometric Authentication

It uses unique physical characteristics like facial recognition or fingerprint scanning to deliver secure and convenient access to banking services.

  • Personal Financial Management Tools

These tools help customers track expenses, create budgets, and seek personalized financial advice.

  • Predictive Analytics (PA)

PA uses customer data to predict future behavior and financial needs. This allows banks to offer tailored products and services proactively.

3. Blockchain

As per a recent report by Research and Markets, “Blockchain In Banking And Financial Services Global Market Opportunities And Strategies To 2031,”

  • The global Blockchain in the banking and financial services market will grow to USD 17,583.4 million in 2026
  • It will record a CAGR of 27.9% from 2026 and reach USD 60,270.6 million in 2031.

Blockchain offers a secure and transparent system for storing and transmitting reliable data. It facilitates faster and cheaper payments, better traceability, and easier access to financial services, improving CX.

Here are a few ways Blockchain boosts CX in banking.

  • Better Data Security and Integrity

Blockchain ensures tight security and that data is not easily tampered with or corrupted.

  • Robust Transparency and Traceability

Blockchain makes it easier for banks to follow the history of a given asset or transaction. Moreover, it provides a complete view of the flow of resources and the interactions between the parties involved during financial analysis.

  • Increased Efficiency and Reduced Need for Intermediaries

Financial processes are faster and more streamlined without intermediaries and with considerable cost-saving. At the same time, Blockchain-based smart contracts eliminate the need for manual data reconciliation, lowering errors and delays. Overall, faster and more efficient services with lower fees improve the CX.

  • Personalization and Controlled Data Access

With Blockchain, customers can control their data and determine who can access it. This makes it easier for banks to offer personalized experiences by initiating selective data exchange with banks. This helps develop tailored offers to meet customers’ demands.

4. API Ecosystem

McKinsey Digital’s survey, “APIs in banking,” states that large banks are launching API programs. They allocate about 14% of their IT budget to APIs on average.

Traditional banks following conventional methods experience a reduction in customer engagement. To address this issue, banks must refine their processes to gain more customers and keep up with the ongoing trend. Banks must deploy apps for modern customers to accomplish multiple tasks simultaneously.

Integrating banking services with APIs is essential to help attract more prospective customers and enhance overall engagement. It offers a distinctive way to improve customer engagement and facilitates secured financial transactions.

Overall, APIs offer an easy, rapid, and secure way for customers to access banking products and services.

While APIs are vital for any tech architecture of the future, it is essential to have a clear strategy for maximizing the potential of APIs.

Also Read: Ways to Improve Customer Experience in FinTech

5. The Leading Role of the Internet of Things (IoT)

As customers demand faster, more convenient, and personalized services, banks are turning to IoT to provide them. IoT devices gather vast volumes of data that banks can use to deliver better financial services throughout the customer lifecycle.

Banks can proactively send personalized offers and reminders by tracking customer needs. The data also helps streamline customer onboarding, support, and grievance handling.

IoT offers banks real-time data to make informed decisions and a seamless CX. Moreover, data analytics helps manage customer money better and develop valuable reports.

Also, banks can use IoT to improve security by using devices to track suspicious activity and biometrics to validate customers.

As per another report by Research and Markets, “Internet of Things (IoT) in Banking and Financial Services,”

  • The global market for IoT in Banking and Financial Services will reach a revised size of USD 59 Billion by 2030.
  • It will record a CAGR of 30.8% over the analysis period 2022-2030

IoT will be more crucial in banking in the future due to the rise in connected devices. This will allow banks to collect more customer data and offer robust customer services.

Anushree Bhattacharya
Anushree Bhattacharyahttps://talkfintech.com/
Anushree Bhattacharya is a Senior Editor with TalkCMO, where she covers stories on B2B business strategies and digital marketing. She is a quality-oriented professional writer with eight years of experience. She has been curating content for the B2B marketing industry, and her writing style is inclined toward how businesses want to perceive information about emerging digital transformations in the marketing landscape with latest developments. Anushree blends the best information on trending digital transformations, technology-driven stories, and SEO-optimized content. Anushree is proficient in curating information-driven stories about marketing for TalkCMO publications.

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