A timeline of CX management in corporate banking

Today, customer experience (CX) management has emerged as a top operational priority across industries. The driving forces? A surge in customer touchpoints and an explosion of customer-related data sources. To keep pace, many global organizations have introduced roles such as chief CX officers, dedicated to overseeing the design and delivery of seamless customer journeys, according to Katherine N. Lemon and d Peter C. Verhoef in a 2016 article in the Journal of Marketing. 

Back in 2014, a Gartner survey found that 89 percent of companies expected to compete primarily on the basis of CX by 2016—a dramatic leap from just 36 percent in 2010. Similarly, Jaruzelski, Loehr and Holman (2011) predicted that CX management would become the defining trait of tomorrow’s leading innovators. Fast-forward to 2024, a Forbes study highlights that 53 percent of consumers believe that the experience a company delivers is just as important as the products or services it offers. Almost half (49 percent) say the relationship a company builds with its customers matters just as much as its product offerings, according to Forbes in a 2024 article.  

Banks are no exception. To stay competitive, they are prioritizing efforts to enhance CXs across all channels. Yet, within banking, a critical segment has often been overlooked: corporate clients. Compared to individual customers, corporate clients are fewer in number, possess more complex organizational structures and exhibit distinct transactional and perceptual behaviors. 

As customer expectations grow and competition intensifies, banks have no choice but to sharpen their focus on this vital group. Corporate clients—businesses, organizations, and legal entities—operate independently from their owners or partners and hold legal standing. They engage in financial transactions, negotiate commercial contracts and tap into specialized banking services. Despite their smaller numbers, corporate customers have an outsized influence on a bank’s resources and success. 

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Successful CX Management in Corporate Banking 

According to a survey conducted by BCG (2019), retailers across various industries are expected to invest about 30 percent more in personalization over the next three years. In addition, a study by Forbes (2022) found that 41 percent of marketing leaders consider personalization a top priority for enhancing CX. Brill (2018) argues that the demand for personalized experiences has gained more prominence because of the influence of smartphones, artificial intelligence and real-time big data analytics, which significantly contribute to improving CX.

Specifically, in the context of personalized banking services, Wang, Cho and Denton (2017) examined the correlation between the adoption of electronic banking services and service customization according to customer needs. The study, which involved 181 banking customers across 31 branches, evaluates the interaction of two factors: personalization and alignment with the customer’s prior experiences. The results show that personalization leads to a greater willingness among customers to use the service. A key aspect of personalizing services in any industry, for any target customer, is the need to collect data and information regarding customer needs, preferences and past behaviors. These data can be gathered through surveys, interviews, website analytics and other resources. Analyzing these data to understand patterns and gain insights into the customer—such as the motivations for using banking services and the customer value chain—is essential. 

Understanding and Valuing Corporate Clients

Segmentation is one of the most common and effective approaches for creating suitable profiles, gaining a deeper understanding of customers and managing them efficiently. Customer clustering factors typically include demographic, financial and behavioral attributes, but the specifics of these factors differ when applied to corporate clients as compared to individual clients. In understanding corporate customers, there are additional factors to consider, such as the nature and ownership of the company, whether the company is knowledge-based, and whether it is government or privately owned.

These factors influence the identification of needs and the design of products for corporate clients. Ultimately, banks need to identify their valuable customers and, through proper segmentation, design products tailored to them or redesign existing services to meet their needs. This approach calls for a bank to operate like a financial supermarket, discovering value with simple and appropriate processes, maintaining customer service at its core, going global and establishing a strong and active brand. 

Data management and customer analytics

In the growing digital economy, big data analytics hold significant potential for CX management by enhancing the understanding of the customer journey and enabling decisions aimed at improving CX. According to existing research, very few studies have explored the intersection of data management and CX management for corporate clients. One such study, conducted by Kandi et al. (2019), provides a step-by-step guide for implementing text mining approaches in managing CX. The authors suggest six key insights for managing the customer journey, including gaining insights into the customer, identifying root causes, discovering high-risk areas, understanding customer emotions and cognition, preventing sales attrition, and prioritizing actions to improve CX. In another study by Holmenland et al. (2020), a framework for managing CX based on big data insights was proposed. This framework includes three main blocks: types of customer data (structured, requested, and unsolicited), types of CX analysis such as descriptive, prescriptive and predictive analytics and tools used for these analyses, as well as insights related to CX, including market insights, behavior and psychology. The final block focuses on CX actions, such as monitoring touchpoints, prioritizing, aligning and designing the journey.

Technical requirements and infrastructure are crucial because of the high volume of customer transaction data. Issues like utilizing AI web services, data analysis tools, data storage infrastructure and server infrastructure are highly important. Regarding data security considerations, while the use of data can lead to personalization and, consequently, greater customer satisfaction, it also raises security concerns for customers.

The use of data at various points of customer interaction with the organization presents both advantages and disadvantages. However, research findings indicate that the best time for personalized communication is close to the point of purchase and immediately after the transaction. If personalized messages and actions raise privacy concerns among customers about how their personal information is used, it could lead to decreased loyalty and reduced engagement. 

Processes and organizational structure reformation

Some organizations view CX separately from employee experience, organizational attitude and structure. However, from the perspective of a customer-centric organization, six key organizational elements are identified to enhance CX. These include:

1. Developing an integrated CX strategy.
2. Knowledge management based on CX.
3. Redesigning organizational structure to support CX management.
4. Strong management commitment.
5. Integrated information technology systems.
6. Customer-centric human resource policies to improve effective customer interactions.

From an organizational structure perspective, various studies emphasize the need to eliminate siloed approaches. This is reflected in concepts such as the formation of interbank committees, the creation of interdepartmental committees, and the importance of establishing product testing and correction teams. Moreover, a 2019 Forbes study highlights the significance of cross-functional teams in improving CX and their role in breaking silos, which influences CX. Cross-functional teams can analyze data from multiple perspectives, identify the root causes of problems, and assess and optimize decisions. Therefore, forming interbank and internal bank committees not only improves CX but also helps in identifying and solving issues quickly. 

Competitor analysis, economic conditions, banking policies

The components related to this factor include: internal bank policies, macro banking policies, economic conditions and competitor analysis. Competitor analysis ensures that organizations remain competitive by comparing the products and CX offered by direct and first/second-tier competitors, helping determine their own strategy in the market.

Economic conditions, such as inflation and political circumstances, also significantly influence CX policies. By comparing products and experiences offered by competitors, banks can identify their strengths and weaknesses. Competitor analysis involves examining services, the quality of customer interactions, technological innovations, pricing, communication channels, and loyalty programs. Furthermore, economic conditions and macro factors such as interest rates, inflation, currency fluctuations and sanctions impact the behavior of legal customers in banks, and must be considered in CX planning.

In addition, macro banking policies and regulatory frameworks such as anti-money laundering laws, customer credit evaluation regulations and credit risk frameworks determine the types of services and interactions between banks and legal customers. Overall, considering environmental analyses and aligning policies and actions with economic, competitive and regulatory changes is essential for designing and implementing an effective legal CX management program. 

Product portfolio management

Experts believe that in the coming decades, companies will focus more on CX strategies to enhance customer loyalty and gain competitive advantages. Their theory has been validated over the past decade, reflected in the shift from product design to customer service design. Feng and colleagues (2020), in their research on data-driven product design using smart manufacturing, conducted a comprehensive review of existing research on data-based product design. They categorized data-driven design methods into aspects such as customer need analysis, conceptual design, detailed design, and design knowledge support tools.

Recent studies in product design have also shown the use of smart product approaches with technologies like digital twins (Bratti et al., 2022), convolutional neural networks and machine learning (Kuan et al., 2021), and the Internet of Things and big data analytics (Li & Christensen, 2023). In essence, this component is also linked to previous model elements such as data management and customer analysis, customer understanding and personalized product design.

As living standards improve and user needs change, modern products become increasingly diverse and precise. Therefore, producing products without considering the pain points and needs of customers in different clusters is futile. 

Organizational maturity and culture 

An organization may accidentally create a few successful CXs, but implementing a customer-centric approach, despite its appealing appearance, is difficult for companies, and maintaining commitment to it is even harder. Many organizations have failed because the culture, systems, people and values were not aligned to prioritize the customer. The concept of organizational maturity and culture can be categorized into five main areas:

1. Culture of embracing change.
2. Customer-centric culture.
3. Risk-taking culture.
4. Digital maturity.
5. Teamwork culture.

The common thread among all these five areas is the management's commitment to these elements and ensuring their integration throughout the organization. Essentially, if management is not committed to CX programs and projects, other projects will take priority in terms of budget and time. 

Marketing and advertising management

Marketing and advertising significantly impact CX. These are primary tools used to enhance CX and build customer loyalty. Through marketing and advertising strategies, banks can introduce their products and services to the right audience and foster deeper connections with customers. Establishing effective marketing strategies is crucial, and when customer-related information is timely and accurate, it can positively influence CX. Marketing and advertising management includes concepts such as smart marketing, brand management and traditional marketing. 

Corporate customer relationship management 

Throughout the customer journey with the organization, various channels and touchpoints are involved, which must be managed effectively. These areas are divided into three main concepts:

1. Creating a customer interaction platform.
2. Analyzing customer behavior.
3. Establishing policies for customer interactions. 

Implementation of CX management in banking

The following table displays the components and sub-components of implementing CX management in banking: 

Framework for implementation of CX management

For easier planning toward model execution, and forming technical, executive and strategic committees, the identified components are categorized into three main layers. It is essential to first evaluate the organizational maturity to identify strengths and weaknesses in areas such as IT and information systems maturity, bank process maturity and customer-centric culture maturity. In addition, forming multidisciplinary teams will facilitate the improvement and acceleration of the model's implementation.

Strategic layer

Includes components that affect the overall organization's policies and direction and require high-level decision-making.

Operational layer

Includes components that assist in executing the organization's strategies and optimizing existing processes and structures.

Executive layer

Includes components related to the precise and operational implementation of daily processes and customer interactions.

This layered approach ensures that the implementation of CX management is structured, systematic and adaptable to the organization’s needs.