A (5:53)

Yeah, as you're talking about that, I'm thinking you really need the AI, which has that ability to just be personal, know all that information at scale. But you need. You need the AI to wait for you to make that first move, right. If it's coming to you and say, hey, Nathan, I see you. You know, you're doing this or that about your relationship or your new home. You're like, whoa, that is a little too creepy. Or.

C (6:21)

Yeah.

A (6:22)

Or the other things we've heard from other people is that AI can be tone deaf too. Right. They can share all the information you want, but it's not being shared in a way that it Feels too computerized. Right. It feels not, not human or not, not in the moment. But what are your thoughts on that? You know, and, and what can, how do banks approach that? How do they learn more about that sort of thing?

C (6:48)

Yeah, well, I think that's the whole thing is you, you know, and we'll kind of get in, into this too, with some of the other trends too. But it's really understanding kind of like what feels actually supportive, right. During these moments versus, like, yeah, like you said, like a robot or like I'm spying on you type of thing. And in order to do that correctly, it's really about like understanding these segments, like specifically. And, and that actually leads into the next kind of trend. That's just like, you know, if you could have picked a segue, you just got one, you know, but it's like, it's so great because that's kind of where everything is going. So, you know, the next trend essentially is that there are, you know, banks are under profit pressure like every other type of business. Right. And it's, what it's really doing is forcing banks to shift from this kind of broad strategy, kind of a one size fits all, to precision. And that's, you know, making kind of this deep customer understanding, exactly what you were just asking, just absolutely essential. And let me unpack this a little bit because this one's kind of interesting. So banks are really showing that they can't rely on strategies of the past to drive growth. Right. Where it's just kind of like a blanket strategy. And there is extreme profit pressures in these next couple of years, pushing them to what McKinsey recently stated as a precision toolbox. And what that means is serving like, very specific segments, journeys and needs with very targeted experiences. Again, not those blanket strategies. So kind of what's, what's happening out there, obviously. So going back to McKinsey, they were talking about how 2026 is bringing the reversion to the mean, which means that banks will, you know, experience like slower growth and profit pressures will increase. Right. We know there's a lot of external factors out there that are really forming this. And at the same time, which, this one I find really interesting is Accenture said that more than 40% of consumers say they can't tell the difference between most financial brands. And at the same time, nearly three quarters of people already bank with more than one provider. And so what it really means is loyalty is super fragile at this point. And so obviously there's so much competition out there right now, especially in the banking world and different financial products. And if everyone's looking alike, banks really cannot afford to have these broad blanket assumptions, right? And so they need precision to understand specific motivations, barriers, emotions that shape like a financial consumer, right, their decisions. And that comes from really understanding these like specific segments. And so, you know, here's an example is like when you think about like digital account opening, you think about opening an account online and you think about it for a first time home buyer versus like a gig economy worker, right? There's entirely different needs, entirely different friction points. So it's about having precision versus a one size fits all to acquire and retain loyal customers, right? Because if you kind of have like what you were speaking of earlier, this tone deaf experience, then basically, you know, you're not going to be able to meet the needs of these people kind of where they are. And so, you know, scale is kind of what built the last era of banking. You know, getting everything digital, making things convenient. But precision is predicted to really be that next kind of real segment of growth for banks. So banks that really get that right are going to be the ones that I think are going to really win in this next era of banking.

A (11:25)

You as you're talking about that and I'm thinking about, you wrote earlier this year just about, you know, onboarding new, new customers or as opening new accounts within banks and just the huge cost of that for banks for, you know, to get me as a customer and that. And they had to do it in this sort of broad vanilla sort of way. This is why nobody knows the difference, right? They, everybody, it costs so much, they can't really take too much of a risk in their advertising and so they have to do this sort of bland type of thing. But if they, if they can narrow that down to this specific niche where they're, where they're going and also advertise to that specific niche and get those messages right to the right people, then that you lower that acquisition cost, your profits increase. And so it's just taking that time now before you do all that to understand just who are these people? What are the potential niches that you're going to go after? Is that right or.

C (12:28)

Yep, that's completely right. It's completely right. And then that kind of goes back to the first trend, right, where we're having generative AI, right, can come in here, learn about you really quick and then maybe guide you into the right experience, right? And so like whether it's internal machine learning that banks use because obviously AI is still not widely used in Banks at this point. But there are ways that banks are creating their own systems in this kind of machine learning. And so, you know, the possibilities are kind of endless when you think about all the ways in which they could make an experience just really customized. Because yeah, if I'm like a gig economy worker, maybe I want alerts on my account when my balance goes down to a certain level. But if I am a first time home buyer, I'm going to be wanting to see ways that I can optimize my savings and other types of things. And so just getting those little things, they seem so little, but that is really what is going to build trust and make things like, you know, that's actually. Here we go again. It's just like a perfect segue into the next, next trend. But you know, the next kind of era of banking is also lending itself to, you know, what are those new drivers of, of loyalty? Right, because loyalty's been flipped on its head when you can open because some, some banks have gotten it really right where they can, you can go on and you can open up a new account and it's really easy. And so loyalty then, because everyone is banking with more than one bank at a time, you know what that really drives loyalty. Why would someone want to bank with someone? And so with all of the next trend is really around those economic pressures and how they're reshaping consumer behavior. So trust, clarity and relevance are going to be those new loyalty drivers. And so what we're really talking about is with all of these kind of mixed economic signals and the rise of kind of financial strain, consumers are becoming a little bit more selective and value conscious even when it comes to where they bank, who they bank with. And so they want transparency, simplicity and clear proof of value when they are doing these different types of transactions. So banks in this next year that will succeed are going to be the ones that understand the shifting customer emotions and will be able to help design experiences that are really around building trust and clarity. And those will be really, really important loyalty drivers even more so than new financial products in the next year. So, you know, a little more detail on that keep interrupting you is that Deloitte in 2026 was talking about the 2026 outlook for banks and it warns obviously that net interest income is likely to decline. Right, because interest rates are coming down and they're starting to normalize. And so banks in order to remain profitable might do some more fee based advisory services to be, be able to grow and then. But that's also happening at the same time that, you know, consumers are experiencing more financial stress, making them more price sensitive, more skeptical of fees, and they scrutinize every change and, and everything needs to have value for them or they're just not going to buy it. And then as we just have been talking about this whole time, is that all customers are now maintaining relationships with like multiple providers, like three quarters of people globally. A bank with more than one bank, right? And so loyalty, we know is, is really fragile nowadays. And so if a bank's experience feels confusing, costly, or out of sync with their needs, customers are going to switch quickly because alternatives are everywhere. And that puts intense pressure on the bank to deeply understand what their customers truly value and what they're truly going to pay for and ultimately what will build then trust for them. So in summary, this is just a year where many customers are going to feel that financial pressure and trust becomes like, trust becomes the currency in banks. And so we, when a bank makes things clear, transparent and emotionally reassuring, they're going to really win in these circumstances. And as we know, the only way to really do that is to truly understand your customers. And so I just have one more quick example. But you know, again, I keep going back to account opening because it is a really big, big deal. And so when a customer abandons an application, it's not because of the interest rate, it's because the experience might feel confusing, the language isn't clear, the process doesn't feel even safe, right? Like if you're under financial strain and you're trying to open an account for finances, like that's number one. So these are emotional barriers, right? Not financial ones. So in uncertain times, clarity and trust matter even more than just convenience.

A (18:37)

The it just reminds me we had on the podcast earlier this year Mark Slayton, who's a big voice leader or industry thought leader in customer experience and came from a background and working in a bank in the mid Atlantic area. And he talked about how the executives went and tried to do just that, tried to open up a new account or tried to do something and just had horrible experiences and just had those aha moments like we got to make this easier, we got to figure this stuff out. So, you know, maybe that's a good point to end. You know, we can say if you're in doubt, go and try and do this yourself with your own business, try and open up an account or have a friend do it and walk through that and then you'll see the needs, the importance of talking to your customers. But Amy, I really appreciate your time today. If anybody wants to know more on these topics, what should they do?

C (19:42)

Oh, well, we have some new guides on our website. One is about increasing. It's about these very things. It's about about increasing customer satisfaction and loyalty in banks. And so we specifically are going to talk about CSAT scores, but it really can be applied to any type of customer satisfaction. And that's a great place to start is like are your customers satisfied? Because we know that that ultimately influences loyalty and for a bank it ultimately influences their bottom line. So it's really a win win for both when we just take care of each other.

A (20:20)

Excellent. I appreciate your time. I will include links to all what we talked about in the Show Notes or you can always just search online. Just search for User Testing or Insights Unlocked. Hey Amy, thank you again.

C (20:33)

Yeah, thanks for having me, Nathan.

B (20:35)

Want to keep the conversation going? You can find the show notes@usertesting.com podcast if you haven't already. Don't forget to follow us us on Apple Podcasts, Spotify, Overcast or Google Play so you never miss an episode. And if you enjoyed today's show, please share it with a friend or leave us a rating and review on Apple Podcasts. And until next time, this is Insights Unlocked, an original podcast from User Testing.