It’s often said that digital transformation (DX) is not a destination but a journey — and for many financial institutions, customer experience has been the most significant factor fueling that journey. In this CX-centric environment, organizations must adapt their businesses by leveraging the latest digital technologies to attract and retain valuable customers.

The digital revolution has touched every corner of the financial sector, creating new opportunities while making old habits obsolete. From automated fraud detection to machine learning for smarter investments, retail and commercial banking institutions can benefit from deploying new technologies and modernizing legacy applications. In addition, digital and non-traditional banks have shaken up the financial space, making customer retention an even more critical concern.

This is the second article in a series exploring digital transformation in the financial sector, especially as it pertains to banking, investment, accounting, and insurance. Below, we’ll discuss how digital transformation in finance is increasingly led by the motivation to improve the customer experience.

Digital Transformation in Finance: By the Numbers

If you’re looking for insights about digital transformation in finance, who better to ask than finance businesses themselves? According to a 2020 survey, 40 percent of financial services firms say that they’re currently engaging in a digital transformation project, while another 26 percent say that they’re in a perpetual state of digital transformation.

What’s more, the same survey found that since 2017, the primary motivation for DX projects among financial companies has been to improve the customer experience (closely followed by increasing revenue, lowering costs, and improving efficiency). In terms of areas of focus, cloud computing technologies such as SaaS (software as a service) lead the pack, along with business intelligence, analytics, and data security and privacy. Among emerging technologies, AI and machine learning, the Internet of Things, and blockchain have received the most interest from financial services firms.

Meanwhile, a 2021 Microsoft survey of financial services companies found that 86 percent of respondents devote at least a quarter of their budget to CX. Forty-six percent of these firms say that they plan to increase their CX budgets either “somewhat” or “substantially” in the next 12 months.

Digital Transformation and Customer Experience in the Age of COVID-19

The COVID-19 pandemic marked a significant turning point for digital transformation in the financial sector, but the underlying changes had already been going on for some time. For example, even before the pandemic, finance businesses knew that improving user interfaces and introducing customer loyalty programs were essential to gain a competitive advantage.

Of course, lockdowns and social distancing dramatically altered how customers interacted with their financial institutions. Although many banks were designated as essential businesses during the height of the pandemic, disruptions still happened. In a 2020 Deloitte survey, roughly one-fifth of bank customers said that they had used at least one financial service online since the start of the COVID-19 pandemic — and for many, this shift to online banking will likely be permanent.

Changes to the organizational workflow, too, can impact customer experience, necessitating the use of digital technologies. Adopting new remote work arrangements, for example, means that there are fewer tellers available to serve customers in person. As a result, a bank might choose to build chatbots that help resolve common queries through its website, mobile app, or social media. Meanwhile, accounting firms can adopt cloud computing and robotic process automation (RPA) technologies to streamline and automate their business processes and enable their newly remote workforce.

How Financial Services Firms Can Embark Upon Digital Transformation for CX

Given these changes, how can financial technology innovators best position themselves and offer a winning customer experience? Here are some notes and bits of advice:

  • In financial services, the age of undying loyalty to a particular bank or company is over. Customers are more willing than ever to jump ship to a competitor if its offerings are more attractive.
  • Given this greater instability, financial companies need to focus on personalization to attract and retain customers. From baby boomers to Gen Z, people of every age and demographic appreciate personalization efforts such as special offers, fine-tuned messaging, and individual advice based on a customer’s financial situation.
  • Another crucial area of focus is connectivity. Customers have increasingly grown to expect a smooth, streamlined user experience on the device of their choosing, whether that’s a desktop computer or a smartwatch. For example, investment companies can help streamline the process of buying stocks by rolling out user-friendly mobile apps that encourage users to check in on their portfolios daily.
  • With the shift from in-person to online, financial companies need to identify new upselling and cross-selling opportunities at the right digital touchpoints. Customers that have purchased a new insurance policy, for example, can be targeted with personalized marketing campaigns for upselling (i.e., buying a higher level of coverage) as well as cross-selling opportunities like bundling home and auto insurance together. Financial institutions need to build a 360 degree view of their customers.


To keep up with their competitors and better serve their customers, financial institutions need to constantly assess their digital transformation maturity and experiment with and launch new digital transformation pathways. DigXchange is here to help you with your digital transformation journey. We host an ongoing series of events and webinars for business leaders to share their experiences and learn from their peers.

For more information, check out the DigXchange website and sign up for updates on our next digital transformation event. You can also follow us on Facebook, LinkedIn, and Twitter for all the latest news and articles. In the next piece in this series, we’ll look at how digital transformation is crucial not only in the here and now but also as the single most important factor to help financial companies future-proof their business.