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By Roman Regelman, Derek Hayes, Olivier Morbé, Julia Lingel, and Michal Reshef

B anks have heard the digitization

message, and they get it. They’re aware
that financial technology companies with
a data plan within ten minutes or purchase
travel insurance from an airport kiosk in
less than three. Yet the purchasing cycle for
superior digital offerings are nibbling away many banking products (apart from bal-
at the edges of the traditional banking ance checks, withdrawals, and other basic
business, reshaping customer expectations, activities) can average days or even weeks.
and altering the revenue and cost dynam- While banks are working actively to reduce
ics of current and emerging services. cycle times, customers continue to raise the
bar and are increasingly looking for real-
Despite this, few financial services institu- time responsiveness.
tions have fully embraced digitization. While
most have some degree of online and mo- To materially improve the quality of the
bile banking presence, functionality is often customer experience, banks need to do four
scattershot and limited to the front end. In things: adopt customer-centric design prac-
fact, our research shows that only about one tices, redesign processes from end to end,
bank in five offers consistent digitization for apply digitization and process robotics to
any given process. A customer could apply make those journeys efficient and respon-
for a mortgage through a slick online inter- sive, and transcend organizational silos to
face, for instance, only to find that subse- internalize customer centricity throughout
quent processes, from credit review to loan the business. Some banks that have taken
approval, remain manual and require trips these steps have increased their revenues by
to a physical branch, additional paperwork, 25% and their productivity by 20% to 40%.
and more time. Rarely is the experience co-
hesive and streamlined from end to end.
Shifting to a Customer Journey
That incongruity can be jarring. A custom- Mindset
er can buy a new mobile phone and set up A college student whose bank balance has

For more on this topic, go to bcgperspectives.com

dipped into the red is probably not think- ance, but the mortgage section was full of
ing about which type of overdraft protec- tabs such as “securitization,” “convert-
tion he might need or whether a prepaid ibles,” and “refinancing.” Poring through
debit card might be best, but rather how to all that information seemed time-consum-
better manage his cash flow. A career pro- ing, so they Googled definitions, ticked the
fessional looking to start her own business boxes that seemed to apply, and then sub-
doesn’t care about the difference between mitted the form.
various pension plans; she simply wants to
roll over her retirement account without An agent called the next day and spent ten
getting dinged by the tax authorities. But minutes with them reviewing the same
while most financial services institutions questions and detailing the paperwork the
believe that their processes put the custom- bank needed. The couple dug out their pay
er first, customers don’t think in terms of stubs and bank statements—even though
processes. They think in terms of their own the agent already had some of that infor-
needs and wants. How they satisfy those mation because the bank managed the
needs and wants, and the paths they take couple’s primary checking and savings ac-
to do so, are called customer journeys. counts—and dropped everything off at
their local branch. A couple of days later, a
A journey comprises all the decision-making loan officer called requesting additional
steps that customers follow, as well as all paperwork. Then a backlog in the bank’s
the processes, systems, and channels that credit department delayed things by anoth-
they encounter as they consider various pur- er week. Finally, the couple received an
chasing, selling, and investing options. This e-mail stating that they were preapproved
includes research and evaluation, the even- for the loan. But by that point another buy-
tual shortlist of products or services they er had snapped up the house they wanted.
create, and all the interactions they experi-
ence both on- and offline throughout the This is the difference between a journey
purchase and postpurchase periods. Open- mindset and a process mindset. Journeys
ing a bank account or closing on a loan, for embrace the full suite of interactions for a
instance, may involve dozens of bank pro- given activity and work to make the entire
cesses, departments, vendors, and partners. end-to-end chain streamlined, efficient,
Yet from the customer’s point of view, all consistent, and personalized from the van-
those interactions should feel like a single, tage point of the consumer. To compete ef-
streamlined, intuitive experience. The quali- fectively, financial services institutions need
ty of the customer journey—along with the to reimagine their core journeys from front
ease, speed, and personalization of the end- to back by addressing key customer pain
to-end experience—has been proven to points, identifying new opportunities to de-
markedly affect customer satisfaction, loyal- light customers in differentiated ways, ap-
ty, and willingness to recommend the insti- plying—and being inspired by—smart new
tution to others. technologies, and building a scalable and
resilient digital IT platform to innovate and
Consider the experience of a couple look- facilitate consistent delivery. (See Exhibit 1.)
ing to buy their first home. After finding a
great listing for a house in their price
range, they punched some numbers into an Putting Ideation into Action
online mortgage calculator, checked out Crafting journeys that deliver a step
current rates, and then downloaded a pre- change in value takes an end-to-end, cus-
approval application from their local bank. tomer-centered digital mindset, integrated
Some questions were straightforward, but data analytics, dematerialization (where
others confused them. Were they looking smart technologies replace the need for
for a jumbo loan or a conventional one, a physical assets), and the progressive intro-
variable-rate mortgage with a balloon pay- duction of machine learning and robotic
ment or a 30-year fixed-rate contract? They execution. But financial institutions don’t
poked around the bank’s website for guid- need to undergo a massive IT transforma-

| How Digitized Customer Journeys Can Help Banks Win 2

Exhibit 1 | Reimagining the Customer Journey Requires End-to-End Change

Enhanced offering from

rapid MVP iterations
Example: multiple, tailored
private-loan pricing options

Automated, real-time, data-driven
Standardized, visually intuitive workflows
interface across platforms CUSTOMER PROCESS Example: risk-based premiums are
Example: self-service loan application INTERFACE WORKFLOW delivered in a fraction of the time
CUSTOMER they used to take

Smart tools that enhance decision making RISK Superior process design that improves
TECHNOLOGY AND compliance and risk management
Example: machine-learning tools predict
underwriting outcomes even when COMPLIANCE Example: alerts preempt and respond
applications are incomplete to compliance issues

Realigned structure that supports agile

teaming and workflows
Example: an online app provides best
practices and project guidance on the go
Source: BCG analysis.

tion to get these capabilities. Instead, they ments. Ethnographic research—where

need to focus on the journeys that matter teams study customers at home, in the
most and then innovate selectively around store, at the office, while commuting, and
them. Indeed, a small subset of the 20 to 30 so on—reveals customers’ needs, wants,
journeys that customers experience in most and preferences and clarifies not only what
banks offers the greatest opportunities for makes them tick but also what ticks them
differentiation and performance. Within off. The user experience leader at one
customer onboarding, for example, such North American bank, for instance, knew
journeys might include opening an account that the only way his team would be able
for everyday banking or switching to a new to gain practical behavioral insights was to
business banking account. Within servic- get his people into the field. Over a three-
ing, they might include helping to refinance week period, team members observed
a home or resolving a fraud claim. And customers as they navigated their banking
within financial planning, they might in- routines. The experience provided a
clude setting goals for retirement, working visceral sense of the frustrations that
through financial difficulties, or building customers encountered as well as the little
an optimal investment portfolio. things that delighted them. Using that
input, the leader convened a formal
The following are four specific steps that ideation session that brought together
financial services institutions can take to executives, user experience designers,
materially improve the quality of their cus- product managers, software programmers,
tomers’ journeys. and other stakeholders. He then ran
through several rapid minimum viable
Adopt Customer-Centric Design Practices. product (MVP) cycles that identified and
Obtaining a deep understanding of bank- reimagined the most important journeys.
ing customers’ wants and aspirations goes
beyond buying histories, demographic data, Redesign Processes from End to End. The
and segmentation analyses. It takes observ- best journeys embody a bold aspiration.
ing customers in their contextual environ- Creating them takes thinking outside

| How Digitized Customer Journeys Can Help Banks Win 3

existing norms and gaining inspiration from generate new functionality in weeks in-
practices in adjacent sectors and break- stead of months. One large North Ameri-
through technologies. When one bank can commercial bank that redesigned its
reimagined the home-buying process, for credit-lending approach, for example, was
instance, it challenged its design team to able to cut in half the amount of time re-
look at some of the innovations coming out quired for clients to go from application to
of Silicon Valley and to consider how those funding. By automating many of the steps,
concepts might be applied to the bank’s the bank saved 30% in costs, and clients
business. Maybe a live-streaming applica- spent less time submitting paperwork,
tion would allow a prospective home buyer which sharply boosted their satisfaction. In
to share the house tour with a partner stuck addition, by employing dynamic queuing
at work. Similarly, robotics can approximate and other digitized processes on the back
a property’s value faster and more cheaply end, the bank was able to reduce the num-
than could a human by automatically ber of exceptions that required manual
assessing and comparing municipal proper- handling and saw a 100% improvement in
ty records along with other real estate data. hitting its service targets. (See Exhibit 2.)

Once the aspiration is defined, cross-func- Apply Digitization, Machine Learning, and
tional teams—composed of product man- Robotic-Process Automation. Cognitive
agers, designers, user experience experts, tools capable of ingesting vast quantities of
programmers, and others—use agile devel- data and performing sophisticated analyses
opment techniques to pull together an in near real time allow financial institu-
MVP that balances the desired functional- tions to create more responsive journeys
ity with the required investment, current and to employ highly accurate and predic-
capabilities, and expected overall benefit. tive insights to inform customer interac-
Teams then put that product into the field tions. In banking settings, such tools are
and refine, iterate, and rerelease it in rapid, transforming the quality of interactions
successive cycles until the journey ele- that are as varied as call center support,
ments meet predefined customer thresh- credit scoring, and wealth management
olds. Back-office functionality is designed advice. Many of these tools are designed to
concurrently so that the completed journey execute predefined actions on the basis of
is capable of delivering a full end-to-end highly refined reasoning capabilities. And
experience. Operations and servicing com- because the tools are capable of learning,
ponents must also be redesigned to align the more they are used, the more accurate
organizational structures and underlying the decisions and insights generated. A top
business rules. US credit card issuer, for example, part-
nered with third parties to employ new ma-
Often, this type of end-to-end process rede- chine-learning models capable of churning
sign allows financial services institutions to through 10,000 transactions per second

Exhibit 2 | Reimagining the Credit-Lending Journey Generated Significant

Benefits for a North American Bank


50% 30% >100%

Time from credit Operational Improvement in service

application to funding costs level attainment
Source: BCG analysis.

| How Digitized Customer Journeys Can Help Banks Win 4

from multiple channels to detect existing nancial services industry are taking advan-
and potential fraud triggers. The combined tage of journey-based design to dramatical-
speed and depth helped the issuer improve ly reshape the customer experience,
fraud detection rates by more than 40%, for differentiate their brands, and drive
an increase in savings of $125 million. growth—and they’re setting aside signifi-
Similarly, within the investment sector, cant investment dollars to do so. To get
predictive platforms such as Kensho are started, financial services institutions
allowing advisors to tailor portfolios in should take the following actions:
response to political, economic, or other
events and helping analysts generate •• Unlock the value. It’s critical to specify
highly detailed models within minutes a big ambition and then back it with
rather than days. well-validated numbers to quantify the
value at stake. The evaluation should
Transcend Organizational Silos. Designing encompass all the avenues for growth,
and building end-to-end customer journeys such as increased cross-selling, new
requires collaboration across business, value-added features, and expanded
technology, and operations functions. market access through better use of
Different reporting hierarchies in cross- existing data, as well as the cost and
functional teams, as well as rapid and agile operating efficiencies from improved
reimagination waves, may require new skill cycle times, greater automation, and
sets, talent, performance incentives, and reallocation of the workforce.
metrics, all of which can diverge markedly
from traditional ways of working. To sup- •• Conduct a realistic assessment.
port this collaboration and to scale innova- Financial institutions must take stock of
tions across the enterprise, financial ser- the tools and technologies they have
vices institutions can rely on a variety of in-house and gauge their suitability to
sources, including centers of excellence, meet the goal of improved customer
innovation labs, venture funds, activist journeys. Diagnostics, data availability
program management offices, and strong and IT appraisals, skills inventories,
senior management support. peer benchmarking, and other evalua-
tions can highlight areas of the digital
One bank, for instance, was struggling to IT platform in which the financial
bring its new journey initiatives to scale in institution needs to invest and areas
part because the bank was relying on its where it should partner to round out
business units to manage the journeys, and needed skills and capabilities quickly.
coordination was suffering. To get things
on track, the team engaged internal stake- •• Visualize success. It’s one thing to
holders, including the CIO and CRO, and identify a vision and another to inter-
talked with digital leaders in other compa- nalize that vision and execute upon it
nies to create a skills inventory. They then quickly. Customer-centric journey
met with other executives in the bank to design requires using very different
prioritize customer outcomes and ensure reporting methods, metrics, and
that management was prepared to support performance incentives; the ability to
the effort financially. That alignment, com- navigate internal politics; and the
bined with the more cohesive operating capacity to sustain needed cultural
structure, gave the transformation the re- changes. To succeed, senior leadership
quired visibility and traction. must align on the financial institution’s
digital mandate, agree on clear metrics
and goals, and establish the right target
Getting Started governance and operating model.
Adopting a journey mindset requires a ma-
jor shift in the way banks think and oper-
ate—and that shift is no longer optional.
Digital leaders inside and outside the fi- A dopting a journey mindset requires
a major shift in the way that banks

| How Digitized Customer Journeys Can Help Banks Win 5

think and operate. Those that embrace the front to back, and reshape their organiza-
shift, reimagine the most important cus- tional practices to support these changes
tomer journeys, employ digitization and will significantly outpace their slower-mov-
customer-centric design principles to make ing peers. Others must catch up or be side-
the experience rich and complete from lined.

About the Authors

Roman Regelman is a partner and managing director in the Boston office of The Boston Consulting
Group. You may contact him by e-mail at regelman.roman@bcg.com.

Derek Hayes is a partner and managing director in the firm’s New York office. You may contact him by
e-mail at hayes.derek@bcg.com.

Olivier Morbé is a partner and managing director in BCG’s Paris office. You may contact him by e-mail at

Julia Lingel is a project leader in the firm’s New York office. You may contact her by e-mail at

Michal Reshef is a project leader in BCG’s Boston office. You may contact her by e-mail at

The authors would like to acknowledge the following colleagues, who made important contributions to
this article: Lionel Are, Christophe Duthoit, Helen Chen, and Jodie Marie Fernandes. They would also like
to thank Marie Glenn for her help in writing it.

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advi-
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Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please
visit bcg.com.

© The Boston Consulting Group, Inc. 2016.

All rights reserved.

| How Digitized Customer Journeys Can Help Banks Win 6