European banks struggle with declining customer experience

MASSACHUSETTS, UNITED STATES — European banks are experiencing a notable decline in customer experience (CX) quality, reflecting a global trend seen in various sectors.
A recent survey by research and advisory company Forrester, which included 18,058 European adult customers from 60 banking brands across eight countries, revealed a significant drop in CX Index scores for 2024.
This downturn marks a shift from the stagnation observed in 2022 and 2023, raising concerns about the potential business impacts on the banking industry.
Challengers and mutuals lead, but mediocrity prevails
The survey highlights that while challengers and mutual banks are outperforming traditional banks in terms of CX, the overall quality remains mediocre.
The decline was observed across all evaluated countries, with no single nation showing improvement in average CX quality. This presents a unique opportunity for banks to differentiate themselves by enhancing their CX offerings.
“Challengers and mutuals continue to outperform traditional banks on CX,” the report noted, emphasizing the need for traditional banks to innovate and improve.
Communication and transparency as key drivers
To combat the decline in CX quality, European banks are advised to focus on communication and transparency. These factors are identified as the most influential in driving customer loyalty and revenue.
The report suggests that banks should prioritize clear communication and transparent pricing to improve their CX Index scores.
The study stated that “plain communication and transparency drive loyalty the most in Europe,” urging banks to align their strategies with customer expectations.
The future of banking experiences
The survey also reveals that hybrid CX, which combines digital and physical channels, creates the most effective and emotionally positive experiences for customers. While ease and effectiveness are crucial for customer satisfaction, emotion plays the most significant role in fostering loyalty.
Forrester advises banks to integrate hybrid experiences into their customer journeys to build empathy and emotional connections, especially as more customers transition to digital-only interactions.
The report concludes that hybrid CX “creates the best experiences according to European banking customers,” highlighting the importance of evolving customer engagement strategies.
As European banks navigate these challenges, focusing on improving CX quality will be critical to maintaining competitiveness and customer satisfaction in an increasingly digital world.