Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members


Customer experience has always been one of the top priorities for financial service providers, but it has taken on a new level of significance in recent years. With more knowledge and options available to them at their fingertips than ever, customers, predominantly Millennials and Gen-Z, now do expect an effortless, fast, and frictionless experience. This expectation directly puts the financial service providers under the immense challenge of winning and engaging customers by rolling out new digital platforms and services that enable data, insights, and critical functionalities that fuse consumers with the seamless experiences they crave.

CXM is a term that’s typically confused with CRM. Gartner defines CXM as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy.” In simple terms, CXM is an approach to relationships with customers to achieve a digital transformation that puts customers at the centre of the business by orchestration and personalization of the complete end-to-end customer experience on any channel, in real-time at scale.

Current CXM Trends

Digital-first and customer-centric FinTech providers are setting the example of Customer Experience Management in Financial Services by turning tedious financial functions into unique and engaging experiences. They provide alternatives to traditional financial institutions, better at serving a wider variety of needs.

Today’s Non Banks or Digital-Only banks are some of the exemplary examples of CXM, as they offer customers greater freedom, features, and experience to manage their wealth than digital solutions provided by legacy banks. Leveraging data to understand customer preferences and build digitally-enabled experiences is where Neobanks gain an edge over traditional banks.

On the other hand, Neo Wealth Management firms have disrupted the Capital Markets and Wealth Management business simply by introducing a whole new wave of investors. They have accelerated the democratization of the financial system by lowering the barrier to entry and simplifying the process of buying and selling stocks and other asset classes.

Future of CXM

Open Banking/Broking standards would play a significant role by enabling FinTechs to access customer data via Account Aggregation (AA) Services and provide a wide range of opportunities for providing complementary services and products, leading to added customer value.

Super Apps, which acts as an umbrella app for multiple service offerings and offers Nudging via Gamification for customer engagement, and Marketing features to upsell and cross-sell products & services to drive revenue, would garner more traction due to its potential to enhance customer experience.

Hyper Personalization is also another area that’s gaining traction in the CXM arena. With customers and their needs getting sophisticated and widely varied from one another, generic offerings and messages fail to resonate with customers. That’s where Hyper Personalization comes to the rescue by leveraging a variety of data sets, AI/ML, and predictive analytics to deeply understand individual customers’ behaviors and make interactions more relevant and meaningful to them, thus driving engagement and enhancing experience.

Delivering on the CXM Strategy

Delivering Experiences should be thought of from a customer view and not limited to functions of core systems. More often than not a top-down approach does not yield desired results, therefore a bottom-up approach with a customer-centric view has to be strategized.

This would require organizations to De-Couple systems, allow for seamless process automation,    and have an Open Architecture to integrate third-party partner ecosystems. This is a winning strategy that can overcome the limitations of business, operational, security standards yet comply with changing regulatory requirements.

Financial Services Ecosystem expanding rapidly, fuelled by financial inclusion and digital penetration, especially in Tier-2 cities and beyond. In order to capitalize on this growing market, Financial Institutions must definitely focus on CMX and adapt it as a core part of their digital transformation strategy.

Authored by

Praveen Kumar, Chief Evangelist, Market Simplified India

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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