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Digital experience vs. customer journey

Forward-looking banks and credit unions are searching for a balance between technology’s convenience and the know-how provided by human employees.

Nov 4, 2022 / Digital Banking

As fintech upstarts continue to encroach on banking relationships and Big Tech redefines customer expectations, companies in all industries are reimagining the consumer experience. This is especially true in financial services. Digital delivery of financial services—whether opening an account, applying for a loan or carrying out another account transaction—has become table stakes. Now, the industry’s focus turns toward optimizing those platforms.

Wise organizations recognize the distinction between the consumer digital experience and the consumer journey. Slick data capture on a new account application website is nice. Nicer still is a personalized application experience with pre-populated data sourced from the existing relationship with the financial institution. A text message the next day with notification of a loan approval is also nice. But none of this is as beneficial as an instantaneous, personalized loan decision and next steps delivered in one sitting.

According to recently published survey results, financial institutions seem to recognize this distinction when directing investment dollars. “Customer experience as a top innovation driver is losing some steam, as many organizations see the value in other types of innovation drivers, including internally focused initiatives,” the report notes. “This indicates that institutions are recognizing that infrastructure investments need to be made in order to support consumer-facing systems.”

The foundation of the consumer digital loan or account application experience may be a banking institution’s website or mobile app, but the foundation of the consumer journey is the systems, people and processes behind the scenes. So, it’s a good idea to start with that foundation when optimizing the consumer journey.

Identify the areas of friction in those processes—the need to access multiple systems, the extra clicks a user needs to perform, manual decision points or handoffs between people or teams. In almost all cases, it’s these inefficiencies that delay the consumer’s journey to the ultimate desired destination, whether it’s getting funds into a new account or receiving a loan to buy that new car.

Of course, a major difference between the airline experience and the digital lending experience is that banks and credit unions assume risk in lending money to the consumer. Fast decisions are critical to the application experience, but accurate decisions are critical to the institution’s balance sheet.

The risks are growing, too. Consumers generally take out auto loans either for higher-priced new vehicles or for riskier used-vehicle collateral. Unsecured personal loans, a lifeline for many consumers, offer relief from overloaded, high-interest credit cards. These loans are being sought by subprime applicants and those lacking robust credit histories upon which traditional underwriting benchmarks have been established.


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Transferring loan decisions from experienced human underwriters to automated systems is a risk for the financial institution. But the speed and personalization required to meet consumer expectations, as well as the sophistication required to mitigate credit risk, demand data-centric automated loan risk assessment, pricing and decisioning.

Most institutions recognize this reality, and they’re searching for a balance between speed and technology and the knowledge and empathy that can only come from a live employee. Many have systems that can perform sophisticated evaluation of all available data about applicants, credit data and collateral. Some have begun using models based on artificial intelligence and machine learning. In all cases, financial institutions focus on process for continuous optimization of credit policy and agility in implementing changes to meet market demands.

Efficiently leveraging data and integration across systems, streamlining and automating workflow and decisioning, and replacing manual and paper-based processes and tasks will empower a bank or credit union to optimize the journey. It will get consumers to their destination faster and more efficiently, and that’s the key to having satisfied account holders who will come back for more services and influence others to try their bank or credit union.

Kris Frantzen is VP, product strategy, at Temenos.

Explore ways technology can help financial services providers reach the right customers with the right credit products and compete more effectively against nonbank players in the BAI Executive Report, “Technology is pushing lending in new directions.”