How Top Banks Are Turning Customer Experience into Sustainable Growth

Jim Marous (00:24):

Welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous. In a world saturated with digital noise where customer loyalty is increasingly rare, how can traditional banks not just survive, but thrive?

Jim Marous (00:41):

I'm joined in the Banking Transformed podcast by Kartik Ramakrishnan, CEO of Financial Services at Capgemini. He will discuss the eye-opening findings from their just released 2025 World Retail Banking Report.

Jim Marous (00:57):

This report reveals some concerning trends, including that a vast majority of customers are indifferent or outright dissatisfied with their current banking experiences. Meanwhile, banking executives are struggling to convert prospects into customers with significant gaps between what customers want and what banks are delivering.

Jim Marous (01:18):

But within these challenges, lie extraordinary opportunities for transformation. We'll explore how leading financial institutions are using customer-centric flywheel growth models to attract, engage, and delight digital first customers in an increasingly competitive landscape.

Jim Marous (01:38):

More than ever, progressive financial institutions are implementing new growth strategies, focusing not just on acquisition, but on creating seamless personalized experiences that drive long-term engagement and advocacy. This is achieved by leveraging AI, data analytics, and targeted deployment to create meaningful connections with increasingly dissatisfied customers.

Jim Marous (02:03):

So, Kartik, you've been with Capgemini for over 20 years with many of these years focusing on the banking industry. What has been the biggest change in the industry that you've seen over those years?

Kartik Ramakrishan (02:17):

Absolutely, Jim. So, first of all, thank you for having me. As I look at my journey with Capgemini, with the financial services industry and cards, the whole journey has seen various evolutions as we work with our clients, me as a customer of banking services. And if you start with the early 2000s and the early advent of the digital era, just being able to check your balance was a big feature to where you are today.

Kartik Ramakrishan (02:56):

Apps are the most common thing with which people interact with their financial institution. But what … and we'll talk a little bit about what our report says. But what we see is a point at which there is not as much differentiation between the offers. And we see app providers, new banks, new technology startups beginning to capture a little bit of the mind share that large established financial institutions really desire to have, and that's where we are at.

Kartik Ramakrishan (03:35):

So, we've seen a big evolution, but we are at this point where I think customer expectations have gotten to the point where they expect more, and banks aren't there yet.

Jim Marous (03:46):

It's interesting because your report series, the World Bank and Report Series, which covers just a lot of things in different types, in different reports that you publish, really has continually shed light on the fact that while we're doing things okay, we're not doing things well enough. And that's coined but it's really true.

Jim Marous (04:09):

And I think what's happened is the industry overall has almost become complacent because they don't see customers leaving. And it's interesting because when I get in front of a huge group of bankers, I ask how many people have closed a primary financial relationship in the last five years, and virtually, nobody raises their hands.

Jim Marous (04:30):

Then I ask how many in the room have opened a relationship with a non-traditional financial institution or a financial institution beyond their core banking relationship in the last two years, and virtually, everybody raise their hands. Mind you, this is a group of bankers that have relationships with the organizations they work at. Yet, even you have gone outside of your traditional relationships to get services you want.

Jim Marous (04:56):

And I call it silent attrition. The customer's not really leaving, but they're not building that relationship. And in many cases, the relationship's becoming fractured, as you mentioned, by FinTechs and other organizations.

Jim Marous (05:09):

When you look at what's going on in the retail base, your report, the World Retail Banking Report pens a lot of attention on the card and payments ecosystem, but it also shows that banking customers overall have become either indifferent or outright dissatisfied with their current experiences across product lines.

Jim Marous (05:31):

So, what do you see as the primary drivers behind this widespread dissatisfaction, and why has it reached such a critical level?

Kartik Ramakrishan (05:42):

Absolutely. So, the report that we do, we survey a wide variety of people. So, we survey senior executives. This year there are about 200 of them that we've interviewed. We survey in this case marketing professionals. That's about 800 of them, and about 8,000 end customers across a variety of countries.

Kartik Ramakrishan (06:06):

This process is repeated year after year, and we kind of summarize the results. This year ended up being focused on cards, but we've done different things. But if you look at what I did, and I did a little bit of this before this session.

Kartik Ramakrishan (06:22):

I went to Grok.ai and said, "Tell me what the last five Capgemini retail banking reports have talked about, and are there any trends?" And this is relevant to your question, so I'll come back to your question in a second.

Jim Marous (06:39):

No, yeah.

Kartik Ramakrishan (06:41):

But it summarized probably my five hours of research in 10 seconds to say, number one: digital transformation. Number two: customer experience. Number three: efficiency and leverage of AI. Number four: cards are a strategic tool, a feature of our report this year. Number five: legacy systems, cost pressures, data readiness are all key challenges.

Kartik Ramakrishan (07:06):

And this, we've set it for five years in a row now in a variety of ways, variety of focus areas. And it kind of builds on some of the themes that you're seeing. The challenges have amplified, but the challenges have remained. And to your point of silent attrition, the biggest friend of the traditional bank today is inertia. That is what has kept them going.

Kartik Ramakrishan (07:35):

But if you start to look at some of the examples of FinTechs and Neobanks and how they've expanded, let's take Revolut for an example. Great startup, it started in the card space. So, you could very easily have somebody who adds on Revolut as one of their products in addition to having a traditional banking relationship. But you look at Revolut today, seven, eight years on, they do everything from cards to banking, to wealth management, so investing, ability to trade in crypto.

Kartik Ramakrishan (08:11):

So, you start to think about the services that get added on, and one can see a customer gradually trading from their traditional banks. So, they start with a card, they add on to retail banking, they add on some investing advice, and so on and so forth.

Kartik Ramakrishan (08:30):

So, it is a process, but I think unless there is that wow experience that focuses on the customer, not just at acquisition, but during servicing that continues, there is going to be this slow gradual attrition that will come piece by piece. And then at one point, you see that big move over.

Kartik Ramakrishan (08:57):

Our report says 74% of customers (that's the number) are either indifferent or are unhappy. Now 50%, so 50% of the 74% are indifferent, 24% are unhappy. So, you see that, you've tracked that over the years, you'll see slowly that indifferent getting to unhappy, and then unhappy moving to attrition. That's the way we see it.

Jim Marous (09:23):

It's interesting because you mentioned the different things over the last several years that there are key trends, and inertia that you bring up, it's not only inertia within an organization, because there aren't many banks that have gone out of business. There aren't many banks that are losing money. As a result, we don't tend to feel the fear of something happening bad if we don't do something different than we've done in the past.

Jim Marous (09:48):

So, you have inertia of executive management, of middle management doing things the way they've always done them. And then you also have the inertia of the consumer that may not close their account when they're dissatisfied because we've made it so hard for them to do so.

Jim Marous (10:02):

But they've expanded the relationships across more and more organizations, and organizations aren't even paying attention to the flow of funds to see every month when I get paid, where does that money go? It doesn't stay where it was in the past, it's going to different organizations.

Jim Marous (10:18):

And I think when you look at that inertia, when you look at our focus as an industry on cutting costs and making things more efficient as opposed to making them better for the consumer, we eventually are going to have to pay for that. Because organizations outside of banking as well as the inside of banking bring up Revolut. I can bring up NewBank and other organizations, they'll continually build momentum because customers start sharing the experiences they've had.

Jim Marous (10:50):

In your report, you talk about the difference between traditional banking models and what you refer to as the new age banking model. What's the biggest difference between the two beyond doing what we used to do just faster?

Kartik Ramakrishan (11:06):

Yeah. I think a lot of it starts in our mind with the customer engagement model. It starts with the customer always. So, if you think about a traditional banking model, and there's a nice compare and contrast, banks tend to think in terms of products, and products that they want to offer to customers. New age banking model starts with the customer to say, “What does the segment of customer really need?” And kind of work back from there.

Kartik Ramakrishan (11:43):

So, if your marketing is focused on just a product, this is my card product, this is my marketing, you end up being in the product-centric realm. Whereas, if you start thinking from a customer standpoint, you start thinking about what do these sets of customers care about? And you market from there, then you actually end up potentially offering them multiple products. So, that customer-centricity is one big difference.

Kartik Ramakrishan (12:10):

The other big difference that you'll see with the new age banking model is an end-to-end digital journey. We've talked about it as multi-channel, omni-channel. There are so many different names for it, but having a seamless mode of interaction with the customers is what we see in a new age banking model.

Kartik Ramakrishan (12:31):

So, you start with whether the customer accesses their chat bot or calls in with the customer, or finds another way to start an interaction, but ends an interaction with a bank in an entirely different model. There is seamlessness around it. One channel knows what's happened in the other channel, so they can be effective in that communication. That is a seamless process.

Kartik Ramakrishan (12:58):

So, that's, I think, the second biggest thing that we see. And then we start to go on to kind of the more … from the customer back towards the inside of these financial organizations in terms of are they cloud native? I.e., can they leverage technology to be efficient, to be quick to adapt to change? And all of those things and all of those start to resonate in the new age banking model.

Kartik Ramakrishan (13:28):

And finally, having the ability to have real time multi-payment solutions, whether they be plastic, whether they be the phone, whether they be other ways of making payments. All of those using the vehicle like a card as a channel to be able to make those payments or have real-time payment options – all of those are what we'd see in new age banking models. Whereas traditional banking models would've probably used just traditional plastic.

Kartik Ramakrishan (14:00):

So, I think we start to compare and contrast those as we look at the evolving new age banking models.

Jim Marous (14:07):

So, when you look at that, and there's a lot of financial institutions that keep on looking at a checking account as being the primary financial relationship. And you kind of refer to it in this year's report, and I can use my son as an example, that while he has a traditional financial relationship, he has never walked into a branch, never written a check, and wouldn't know probably today the balance in his checking account as much as he knows the balance in his Venmo account, or the balance on his credit card.

Jim Marous (14:35):

As a consultant to the industry and one of the biggest organizations doing that, have you seen a complete conversion of what is the primary financial relationship for customers being a different payment vehicle than it was in the past where it was a checking account? And taking it a step further in many cases, is even a payment vehicle?

Jim Marous (15:00):

In other words, are we looking at the wrong place for our answers at a time when people … I know for myself, I don't carry a wallet, I don't carry cash, I don't carry cards at all. I carry my phone. And it was funny because we were out to dinner last night, I was talking about the fact, and the person who was our server said, "I lost my wallet a week ago. While I stopped all my cards, I have not re-put all the things in my wallet, including the $400 I lost." He says, "If I don't find a partner that uses mobile wallet, I'm just not going to work with them."

Jim Marous (15:34):

Is this the way everything's changing? And does that in a way weaken the actual financial institution relationship? Because when I'm making payments, I don't always know … I know what account I'm taking it out of, but I'm not building a relationship with the financial institution.

Jim Marous (15:50):

And because these are embedded solutions, my traditional financial institution is not even getting data on where I'm making payments the way they used to. How's that changing the dynamics of how organizations have to build relationships today?

Kartik Ramakrishan (16:09):

What I think and we'll talk about this in a little bit because I share a lot of the behaviors you've just talked about, but I'll answer your question in a second using some other country examples. Because that's where we're seeing the change, and I think that's a change that will make its way here to the U.S. in terms of what we will see.

Kartik Ramakrishan (16:32):

But to your point, I had this thing happen to me a couple of years ago where I was traveling to London for work and I left my wallet at home. All I had was my passport and my phone.

Jim Marous (16:46):

You're good.

Kartik Ramakrishan (16:47):

I put myself …

Jim Marous (16:48):

I can tell you the end of that story. You're doing good with that.

Kartik Ramakrishan (16:52):

So, I told myself this is a test for my industry. Can I survive checking into a hotel, eating, having coffee, meeting clients without my corporate card? The fiscal corporate card I had it on my phone, and my five-day business trip.

Kartik Ramakrishan (17:15):

Good news, I'm still here. Never had to rely on anybody. And of course, UK is highly digital, so it was very convenient, but I never had to actually show my card to anyone, and I could do everything. I could take taxis, buy coffee, all of that.

Kartik Ramakrishan (17:36):

And if I now translate that to see what I see in the rest of the world, it's true. Almost everywhere I travel, I have this habit of keeping some cash just in case I'm stuck. But that's usually sitting in my laptop bag somewhere in case I'm stuck. I never find the need to use it. And I almost always come back with all of the cash I withdrew locally just because I wanted to have the comfort of having some local currency.

Jim Marous (18:01):

It's interesting, Kartik, I had the exact same experience in Rome. I did not forget it, but I was trying to say, "Can I make it through the week?" And the only time I felt like, "Oh, geez, this wasn't good," was when I was checking out, I wanted to tip the doorman, the person working the door, and I didn't have any cash.

Jim Marous (18:21):

Now, mind you, there are those today that have a little fob that says, "I'll tell you what, why don't we tap our phones together, and you can tip me that way." But it was funny because that was the only time the whole time, because I didn't go to an ATM, I didn't do anything. It was a very interesting experience, very much like yours.

Kartik Ramakrishan (18:40):

So, coming back to your question on how we see that evolving, I think the Venmo example you used is perfect. My daughter has friends where they may have a checking account, they get money from their parents on a monthly basis.

Kartik Ramakrishan (18:57):

Usually, what happens is that money goes into the account and immediately gets transferred out to Venmo. And that's their modus operandi in terms of how they deal with cash, whether it's peer to peer, whether it's to make a purchase. All of their life revolves around something like that.

Kartik Ramakrishan (19:17):

Now, let's look at the usual argument against that taking over is, "Well, people go through life situations, and you go from being a student, to you have a job, to you have a family, you have kids, you have bills to pay, and this doesn't really solve all of that." So, you go and see what's happening with the UPI, the payment system in India, and the new super apps that are coming out.

Kartik Ramakrishan (19:49):

If you have a place where you can keep your deposit and no longer keep it in a checking account, you can do everything from investing to bill pay, to doing peer to peer payments, tip somebody when you're exiting the hotel, to buying something off a street vendor. All of it, you can use using UPI in India. And that pretty much takes care of everything.

Kartik Ramakrishan (20:17):

So, I could see in the future a world where that is the standard of operation. Now, is that source of funds continue to going to be the bank? That is for the banks to answer.

Jim Marous (20:29):

Yeah. It's interesting in your report, you reinforce what we have found in our research also, that banks are facing challenges in attracting, acquiring, and onboarding customers despite a massive amount of data available at their fingertips. You attribute this to the inability to convert data into action. Can you elaborate what you really mean by that?

Kartik Ramakrishan (20:55):

Yeah, absolutely. I think if you look at … and we use this concept of a flywheel to describe the lifecycle of a client. And we used credit cards in this example, we used a few personas. There are six steps that we talk about in terms of attract, engage, and delight in terms of how a customer's lifecycle with a bank, with a product from a bank is.

Kartik Ramakrishan (21:26):

And there are a few areas where today, we see opportunities to create some momentum. That is to get a prospective client excited to bank with a given bank, to be able to align the right product to them. And those are all opportunities to create some momentum, to create some excitement. And then there are friction points, and that'll get to the to the actions that we think banks need to take.

Kartik Ramakrishan (21:58):

Then you get to onboarding, and whether it be credit card onboarding, checking account onboarding, or when you go past retail banks to commercial banking, onboarding is an industry-wide challenge, and that's where data is not being leveraged efficiently.

Kartik Ramakrishan (22:14):

Many times we find customers having to submit data that bank probably has access to by themselves. They're going to have to submit data that somebody has to manually validate. So, it takes time, creates friction. And then once the onboarding process is complete, there is some dropout, there is some loss of customers there.

Kartik Ramakrishan (22:37):

When you get to servicing, there isn't a full comprehensive view. I talked a little bit about omni-channel. There is data of what interactions have happened with the customer in history across the various channels. Did the customer walk into a branch? Did the customer call? Did the customer do something on a chat bot?

Kartik Ramakrishan (22:57):

And they're all dealt with potentially by different tech groups within the bank and different customer service groups within the bank. And one doesn't know what has happened in the other channel. Creates friction, creates frustration, and dissatisfaction.

Kartik Ramakrishan (23:13):

And that's where I think a lot of these digital natives are solving that problem because they start afresh with one common customer interaction channel. And that's where I think leverage of data that banks already have is the number one issue that we see that creates friction.

Jim Marous (23:34):

It’s that one view of the customer. We used to talk about the silos that were product silos, and now, we have what I'll call communication or channel silos, and because consumers invariably go down that path of engagement in different ways all the time – I may start in a branch, (I wouldn't but let's say I could), and then go to a mobile device and then maybe make a phone call or maybe go to the chat bot.

Jim Marous (23:59):

The concern is, are these talking to each other, and how much of the friction that's being built and has stayed in the traditional financial institution is caused by the lack of ability to embrace maybe managed risk?

Jim Marous (24:19):

In other words, you know we have vendors in the marketplace that will sell a three-minute new account opening experience on your phone. A financial institution will hire them as a partner, and immediately, the financial institution will say, "I like everything you’ve sold. I want that three to five-minute period, but I still want to use the government idea as a starting point." And the organization says, "Why did you hire us? Because basically, I can't get under seven minutes if we start with key punching."

Jim Marous (24:52):

You're higher up an organization than I am in many cases. What is the challenge that organizations are facing to completely change the way banking's done for a digital world as opposed to simply using digital doing the old fashioned things? There's a balancing act there, but what do you see the challenge being?

Kartik Ramakrishan (25:14):

I think I'll summarize this in a few words. I think it's what I call the big company problem. What I mean by the big company problem is every one of our large clients, large banks that we work with, but large banks in the industry have several departments. And the departments keep growing. They keep creating just as a means of functioning, creating more work for themselves.

Kartik Ramakrishan (25:45):

And when you start to look at the KPIs of each of those departments, and a good example will be look at risk and compliance. What is the incentive in this example that you took for a chief compliance officer to say, "I can live without an ID" because they're taking higher risk? What is the incentive for a chief risk officer to say, "I support this?" Because they're targeted with keeping the bank safe and compliant.

Kartik Ramakrishan (26:18):

So, as these organizations become bigger, they tend to at times, lose perspective on what each of these divisions are expected to do because everything ultimately has to be to customer delight. So, if you orient yourself to customer delight, a lot of these problems go away.

Kartik Ramakrishan (26:40):

But the challenge, the way I see it is what I call the big company problem – is there are a lot of people asking for a lot of things, and not everybody has the same KPI, which is to get customer delight. And there you have it, there you have all of these …

Jim Marous (26:56):

Can that be caused by the fact that without going out there and saying it outwardly, that employees are afraid of digitalization of banking costing their jobs? That if a loan adjudicator looks at the way that can be done in a digital world, they're thinking to themselves going, "If I agree to this, if I don't put friction back into the process, I could lose my job."

Jim Marous (27:23):

Or compliance, in some cases, we're not bringing them in early enough where they're part of the solution. But if they were part of the solution, would they feel that in some ways, if we give them reasons not to be used, that they'll lose their job? Is there a fear factor within banking?

Jim Marous (27:40):

Because we are all hired … I was hired 45 years ago, and the first thing you get told is, "No risk. We're a risk avoidance organization." And I went through management training was told, "Here's how we do things," which is a great way to lose any new college graduate, is to tell them, "Oh, by the way, I don't care what you learned, this is the way we do things."

Jim Marous (28:01):

But is part of what is going on in the environment today where people are afraid of moving forward of change for fear that they'll lose their worth?

Kartik Ramakrishan (28:13):

So, I have to say in at least my experience working with clients, I haven't seen that being the driving force. There is inertia, there is resistance to change, but the resistance to change is just because there is a new way to do things.

Kartik Ramakrishan (28:32):

You'll see trying to put a new sales force or a new tech platform in place, when you actually talk down to the operational level, it's less about, “Does my job go away?” It's more about, “I want in the new platform the exact same thing that I had in my old platform.” And what we end up doing, if we're not smart about it, is rebuilding the same thing over again on a different technology. We haven't really solved the problem.

Kartik Ramakrishan (29:00):

So, we see more of that happening than people trying to say, “This means less jobs or less relevance to our department.” There may be an element of that, but I haven't seen it that much. I see more of everybody trying to work with their KPIs and their KPIs don't lend themselves to change.

Kartik Ramakrishan (29:23):

And all of this is going to get accelerated as banks want to adopt AI more because there's going to be a lot of things that are not finite with AI, and that is going to complicate the challenge.

Jim Marous (29:34):

So, our KPIs maybe aren't keeping up in that we're maybe not measuring the right things. When you're talking about customer engagement, when you're starting to talk about the ability to bring a value exchange for … if I'm feeling like my financial institution being empathetic to my needs, it may not resonate immediately.

Jim Marous (29:56):

That's the other thing, is we're in the quarterly and annual statement things, and a lot of these things take time to change. In many cases, it's a trust-based engagement, and we don't trust our financial institutions the way we used to. And it's interesting, your report, and it struck me because I'm a marketer by trade – it said that less than 25% of marketers felt that they are effectively communicating to customers around the whole engagement, activation, acquiring models.

Jim Marous (30:29):

And what's interesting to me is they've never had more capability to do this with the data they have. Where's the performance gap? What are you seeing as the reason why the people who should have access to the most data, the most information and the tools to communicate effectively, less than 25% believe that they are doing a good job?

Kartik Ramakrishan (30:55):

Yeah, I have to say, when I saw that, I was a little surprised because we do so much work-

Jim Marous (31:02):

They're rigging themselves. It could even be lower than what we thought because some could be giving themselves some credit.

Kartik Ramakrishan (31:10):

And I think what we found was there is a reliance on traditional marketing methods, maybe may have become digital less of trying to get to … for using a very standard marketing term, word of mouth. That's one of the most effective things. If you look at all the Neobanks, it's because everybody else around people who use it hear so much good news about it.

Kartik Ramakrishan (31:45):

So, I think a lot of what we heard was they aren't using much of that projected marketing benefit. And it's a lot of using fairly traditional ways of sending emails, not having the right segments that you're able to get to. And the hope that once they get a little bit more data and a better view of data and better leverage of AI, that they can get a little bit more targeted. But the current feeling is a lot of it is down to not being able to get the right data to the right people at the right time in their life.

Jim Marous (32:21):

It's interesting, you also mentioned also with marketing in mind, that digital-first urbanites, as you refer to them, represent a crucial growth segment. Yet this segment is increasingly turning to non-traditional providers. Again, the digital-first providers. What is standing in the way of traditional financial institutions actually getting a handle on these customers?

Jim Marous (32:50):

Now, I'll bring up one example that you're very familiar with as well, that in the United States, Chase Bank is very much a branch-based network, but they have a big expansive group of customers that were either investment customers, but more likely credit card customers. So, they have this overall base that was maybe a one product customer base that they're helping to serve.

Jim Marous (33:15):

Yet in the UK, they were the fastest growing digital bank, and they're structured completely different with different partners delivering those services. Why can't more traditional financial institutions learn from these kind of examples to say, "We've got to move much faster towards being able to reach and be appealing to digital-first urbanites?"

Kartik Ramakrishan (33:41):

Yeah. I think banks have made several attempts and their different models that they've opted to get to what we call the new age banking model. And they come from, we've seen over the last decade or so, banks create digital native versions of themselves or attempt to create digital native versions of themselves, or to start to build digital capabilities that'll add on to what they have. So, there are different models that that have been attempted.

Kartik Ramakrishan (34:13):

And the example you use of Chase is a perfect example of where when a bank starts from scratch, they have no legacy to deal with. And we saw that when Goldman Sachs launched Marcus, we've seen that with what Chase is doing in the UK and we've seen it with digital natives over and over again.

Kartik Ramakrishan (34:36):

So, if I kind of backtrack from that, a lot of this is organizational setup, organizational barriers that limit the ability of these large banks to do exactly what they're capable of when they start as a fresh greenfield opportunity in doing what would be in what we call a brownfield opportunity. In a setup environment, how do we start to deal with all the legacy that we have while we create new capabilities that can mirror or be better than what the Neobanks can offer?

Kartik Ramakrishan (35:15):

And if you think about a bank like Chase or several of U.S. based banks, there is an opportunity to use the branch as a differentiator. It's a value-add. I'm never going to enter, and probably most urbanites are not going to enter the bank to transact, but you have that physical space to bring them in to do value-added things.

Kartik Ramakrishan (35:40):

Those are the kinds of things that I think are good points of leverage for traditional large banks to think about what it's going to take to create that experience for customers so that they use that as their means to access digital native urbanites.

Jim Marous (36:01):

So, let's take a short break here and recognize the sponsors of this podcast.

[Music Playing]

Jim Marous (36:07):

Welcome back to Banking Transformed. Today, I'm joined by Kartik Ramakrishnan, CEO of Financial Services for Capgemini. We've been exploring the challenges, opportunities, and strategies that will define winners and losers in 2025 and beyond, based on the brand new report, the World Retail Banking Report published by Capgemini.

Jim Marous (36:30):

So, Kartik, it's interesting when you look at where we're going today, and we've talked about the omni-channel, the multi-channel, contact centers appear to be a major friction point, but also an opportunity for amazing amount of growth.

Jim Marous (36:48):

Your research showed that only 24% of customers reported satisfactory experiences. How are we leading banks transforming their service approaches to delight rather than frustrate customers? Is it a matter of integration with the other channels, or is that one channel itself have problems?

Kartik Ramakrishan (37:08):

I think it's a bit of both. So, to first start with that 24% number, that is the U.S. number. If you actually go outside of the U.S., it starts to fall off. I don't know the number off the top of my head, but I think France is like 18%. So, the satisfaction level when they call someone and actually get the service is fairly low.

Kartik Ramakrishan (37:34):

And it comes from a few aspects. One, the traditional wait times. Do I need to wait? Do I need to give them information that I believe they should have already? They know my phone number, they know me as an individual. What else do they need? To how quickly can my problem or situation be resolved? To a point of can I make this an opportunity? And there are various aspects that I'd like to cover here.

Kartik Ramakrishan (38:08):

So, on one side, if I look at it from the bank perspective, if not enough is done to leverage call center technology, there is a lot of calls that come in that shouldn't actually be calls. So, I'd worked with the one bank in the past three years where we went and did a study of their contact center. And I was shocked despite the availability of an app and a lot of other information, the number one call that somebody actually answered for them was, "Have you received my payment?"

Jim Marous (38:51):

Yeah. Something that can be answered without a person. Yes.

Kartik Ramakrishan (38:53):

Yes. So, can they do something different. So, now when banks are busy answering these calls, because there are so many of them and they're not really … they're expensive, they're not really value add for that interaction, there's a queue of people waiting to have more pressing matters resolved that are getting frustrated. So, they've got to be ways by which they can balance out cost and the opportunity.

Kartik Ramakrishan (39:21):

And then when you start looking at everything that's available as technologies that they can leverage to say, "Can I offer somebody something interesting?" "Can I talk to them about an experience they can have because they're a card customer?" I think all of those things are possible if they start to look at contact centers as not just contact centers, but communication enablers, distribution channels. And that's what we’re seeing when we start to talk about contact center transformation.

Kartik Ramakrishan (39:51):

There's a technology element to it. Whether it be a Genesis or Amazon Connect or any of the others that allow the leverage of data, allow some analytics, allow AI to be used effectively so they can be more efficient.

Kartik Ramakrishan (40:08):

There is an aspect of how do we free up time so the agent can be a marketer and not just be somebody who answers questions. And I think that is where we see that that the future of the contact center going and that 24% being 70%, 80% in terms of satisfaction rating on communications.

Jim Marous (40:28):

So, we're getting close to the end of the podcast, but I want to ask you a question that really goes differently than the other ones. Can you name some organizations that you believe are getting it right?

Jim Marous (40:39):

We've been talking about the negative things that we've seen in the marketplace and how we're not building the experiences we want for the consumer and for the customer, be it small business, the consumer, or a corporation. What are some organizations that directionally at least are really starting to get it right?

Kartik Ramakrishan (40:58):

I think there is a lot of good happening. I know we like to pick on the things that don't seem to work and feels like if I try and summarize in our conversation could be interpreted as Neobanks, great, traditional banks not great, and that's absolutely not the case.

Jim Marous (41:20):

And there's examples that cross paths really quickly there. Yep.

Kartik Ramakrishan (41:23):

Exactly. So, there is a lot of good that's happening. My own personal experience my first card in the US was a Discover Card and I'm still a Discover Card customer because I love the product. The product is simple, the product does what it said it did 25 years ago, gives me cash back. So, there are a lot of banks and issuers, card issuers who know who they are and what they want to be. And I think those are the ones that I see doing really well.

Kartik Ramakrishan (42:00):

Having a product set that says, "Okay, I'm going after this segment and this is what this segment wants," I see a lot of banks doing. And from my personal experience, I did that. I bank with Chase. I've seen some great stuff that Chase is doing. We see a lot of good.

Kartik Ramakrishan (42:20):

What we have not yet seen is trying to bring everything together the way some of the Neobanks have done. And that's the journey that I hope a lot of these "traditional banks" that we've been talking about can take because that accelerates their growth that much more.

Jim Marous (42:41):

You know what, you brought up a very interesting point when you talk about like, Discover, they know their North Star, they know it's differentiated and they deliver on it. I think Ally does that. I know in my relationships I talk about them often: Acorns. They do a very, a very, very narrow group of things, but they do it exceptionally well.

Jim Marous (43:04):

And they will continually build engagement from that, which I think is a key element that Discover, Ally, Chase to a degree, as well as some of the other card companies really do, is that they will continually interact with you as PayPal does, to say, "We appreciate you using us. Here, if you need a line of credit, we'll give you this."

Jim Marous (43:24):

Acorns will say, "If you want more cash back on your transactions, do you want to increase your monthly allocation towards savings?" And I talk about it, and it's not something I'm really proud of, but I'm an old man who never had a real savings account that was accessible. And when I started using Acorns, all of a sudden, I had a savings account that had a real balance in it. Something that I couldn't believe got built over a three-year period.

Jim Marous (43:47):

But I keep on giving the analogy of my 401(k) where I didn't pay attention was being taken out. I just made sure I always had enough balance, and all of a sudden, I have money in a place that actually never had money in before.

Jim Marous (44:01):

So, I think you're right in that if you can define your North Star, your differentiator, Revolut's done that, Monzo's done it, and say, "I'm going to double down on that and do that the best I can," it makes the job easier, but it also makes it so you're differentiated and you can make your customers that came to you for that reason happy.

Jim Marous (44:21):

So, with that said, and without being able to double down on the exact same comment again, if you are going to give a recommendation to a financial institution today, or let's change that a little bit. I'm going to put you in a financial institution and say they are a traditional financial institutions. They're doing everything okay. They don't get a bunch of complaints, but they don't get a whole lot of thank you letters. What would you do first? What would you change first?

Kartik Ramakrishan (44:47):

I have this dream product, Jim, that I've always thought about. And since this is card related, I'll talk about it. I think if you think about a product that caters to a customer segment of one, it is allowing the customer select the features that they want. What do I mean by that?

Kartik Ramakrishan (45:10):

If I look at a card, any card product here today, they come with these are all the features. And I look at it and I say, "I love this, I love this. I don't really need this, I don't really need this." But I know at the back that the bank actually incurs cost in offering that, whether it be credit monitoring or whether it be something else.

Kartik Ramakrishan (45:31):

And here I'm saying why can't we launch something that says there's a selector upfront where the client says, "These are the things I care about" and we customize something. So, because they don't want A, B and C, we offer them a lower interest rate on purchases.

Kartik Ramakrishan (45:49):

So, if I had the opportunity I'd start to say, maybe it'll start with a simple selector where customers can go through, answer a bunch of questions, and we recommend them one of our existing products. But I'd like to get to a point where I'm not reliant on a product. I'm reliant on the customer and creating something that is unique to them.

Jim Marous (46:10):

Boy, you know what? I even see that as a great product in the traditional broader sense of retail banking, because I think we're going to be getting away very quickly from an account based relationship.

Jim Marous (46:26):

So, if I walked into a financial institution and the organization said, "I'll tell you what, we have a menu of different services. We have so much of it, we can provide to you at no cost, where it's a simple value transfer. Take what you would like from this." And I want a place where I can put my savings where it automatically goes over there all the time ,and then when I write a check, it takes out of savings.

Jim Marous (46:47):

Now, there's no such thing as a checking account, but it's a savings account. I want so much to go into investments. I want to have so much put into my travel cookie jar on a monthly basis, and I want it to be for a specific destination. And I want you to continually challenge me if I'm keeping up with my goals, and all these things that a financial institution can do.

Jim Marous (47:09):

But to your point, by asking those questions, you're all of a sudden, building an agentic AI type tool that can continue to communicate with you in a language that you've given about the goals you’ve set. And all of a sudden, the financial institution is going to get more than they ever (in my mind) – will get more than they expected from the relationship in a value transfer because you've only put in the things that matter.

Jim Marous (47:38):

While I may not ever use it, if an organization said, "Do you want an immediately accessible $250 with a push of your button onto your mobile app, that would be paid back as soon as you have enough money in your checking account? But if you're getting close to the end of the month, you just push that button, you don't have to worry about anything, it's immediate."

Jim Marous (47:56):

I'd probably take it because I'm not the best steward of my own money. And once in a while, I get caught and I just want to make it so that I don't get charged for something I was just stupid about, for lack of a better term.

Jim Marous (48:12):

But I love your product because I think it takes into so much account what your report said around experiential rewards. It takes into account dialogue, it takes into account onboarding and relationship building, the organic growth issue. And it gives you a great customer experience and again, within the confines of what you want your bank to do as opposed to the way the bank wants to do it for them.

Kartik Ramakrishan (48:41):

What you've just done in the last couple of minutes, Jim, is create products that are customer-centric and not product-centric, which is our first tenet of a new age bank.

Jim Marous (48:51):

And you don't want to be … customers don't want to be sold. They don't want to go into the department store and get sprayed with colognes and anything anymore, but they do want to be … the best retailers are ones that go, "What did you come here for today?" But they dig deeper than simply saying, "I wanted a black pair of slacks." And they say, "What are you talking about? I have black slacks everywhere. What are you looking to do? What are you trying to achieve? What's the look you're trying to do?" And there's ways to do it.

Jim Marous (49:24):

What banking has to do is get out of their own way and be able to do it like other organizations and other industries are doing it. And I think we're going to see the same thing with healthcare. And we're doing better in that actually because do you want dental care or do you want eye care or do you need both? And how do you want to pay for it?

[Music Playing]

Jim Marous (49:42):

But Kartik, I promise you we're going to be visiting again because your reports are great, I love them every year. There's so many different elements of what you bring to the table. And I love how you said, before you got on the call you said, "Well, let me try Grok and see what they look at."

Jim Marous (50:01):

I'd be using Perplexity, everybody's got their AI tool, but I think that's one of these things we didn't talk about, which is that ongoing learning experience that's key to all of us. So, thank you so much for being on this show, I really appreciate it.

Kartik Ramakrishan (50:15):

Thank you. Love being on the show.

Jim Marous (50:20):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoy our work, please give us a positive review. In addition, check out my recent articles on The Financial Brand and the research we're doing for the Digital Banking Report.

Jim Marous (50:35):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage, and your audio engineer and video producer, Will Pritts.

Jim Marous (50:45):

Finally, if you have not already done so, remember to subscribe to Banking Transformed on both your favorite podcast app and on our YouTube channel for more thought-provoking discussions on the intersection of finance, technology, and leadership.