Switching suppliers is becoming less painful and that means local players will need to lift their game and fast.
Get them in young and you’ll keep them forever. This has been the prevailing marketing philosophy in the financial services sector for decades and it’s informed the way institutions have engaged with their customers and delivered products and services.
The bad news is, that old playbook is now seriously out of date. In today’s times, businesses and consumers are no longer as ‘sticky’ as once they were and relationships for life have ceased to be a ‘thing’ in the banking world.
Instead, customers are changing providers far more often than they did a decade or two earlier, and future focused providers are pulling out all the stops to ensure making the switch isn’t the time consuming and tiresome experience it used to be.
Keeping customers on the books
Against this backdrop, banks that want to remain relevant, competitive and profitable need to ensure they’re keeping their customers satisfied, every day, in every way.
They need to be ultra focused on doing so in the digital realm, where more than 99 per cent of customer-bank interactions now take place, according to latest research from the Australian Banking Association.
‘More and more Australians are jumping online to do their banking. Digital options are reshaping how people interact with their bank and manage their finances,’ ABA CEO Anna Blight noted in the organisation’s Bank on It: Customer Trends 2025 report.
Going deep
Doing better in the virtual sphere – where there’s no ability for customers to forge personal bonds with sympathetic local branch managers or friendly tellers – necessitates banks offering deeper, more immersive experiences, ones that are ubiquitous and seamless, irrespective of the channel or device customers choose to use.
It means knowing where a customer is, what the context of their enquiry is and how they prefer to be engaged with and supported.
And it means being not only responsive, but proactive: leveraging advanced AI to generate personalised insights on the customer’s behalf; providing recommendations; and furnishing them with the data they need to make optimum decisions about their finances.
Struggling to provide satisfaction with yesterday’s technology
Unfortunately, knowing what customers want and delivering it to them are two very different things.
For institutions that continue to rely on monolithic legacy solutions for their core banking and digital services capability, providing streamlined, dynamic digital experiences is an impossible ask.
Whether developed inhouse or delivered and supported by third party vendors, these platforms have typically not been designed to generate the customised digital experiences customers expect and demand.
But replacing them wholesale is an expensive option and one that’s – rightly – perceived to be fraught with risk, for the banking leaders who authorise the investment and the ICT teams charged with implementing the new solution of choice.
Charting a path forward
Fortunately, there is a better way, one that enables banks to supercharge their digital customer experiences quickly, safely and economically.
Termed progressive, or journey-led, modernisation, it centres around the concept of identifying points of friction and substandard customer experiences, and eliminating them steadily, journey by journey.
Partnering with a financial technology vendor whose AI-powered banking platform is designed by developers with deep expertise in the financial services sector can provide you with the tools to pursue this strategy smartly and safely.
Ideally, you’ll choose a unified, AI-powered platform that connects seamlessly with your core banking systems, and with third party fintech providers whose products can be used to develop digital experiences that give your institution an edge on the competition.
Once it’s deployed in your back office, you’ll be able to implement out-of-the-box journeys that can be orchestrated seamlessly in real time, across all your digital and physical channels.
Setting your bank up for a stronger future in 2026 and beyond
Australia’s banking industry has undergone extraordinary change over the past two decades and its future is unarguably digital. Providers that can’t or won’t provide a personalised, high quality customer experience in that sphere are already losing mind and market share to competitors that have made doing so a priority. If profitable growth is your overarching aim for the new year, investing in an AI-powered banking platform is an essential step that will deliver true engagement and help you achieve it.