ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Retail and Marketing

RIP ROI, hello ‘ROX’

April 12, 2022
Reading Time: 5 mins read
RIP ROI, hello ‘ROX’

By Vince Bezemer

Many outdated ways of banking are dying—and we should terminate ancient ways of measuring success as well.

Today, banking customers view their financial services providers through a holistic lens, looking less for a repository for their funds and more for a lifestyle partner to help them centrally manage their financial lives and financial wellbeing. Meeting and exceeding these customers’ expectations now hinges upon far more than having a slick, intuitive mobile app and bank-from-anywhere capabilities. Modern banking customers want compelling experiences built around their specific needs that integrate seamlessly with their day-to-day lives. And if a financial institution can’t deliver that, their customers will swiftly take their business elsewhere.

This is why traditional, ROI-centric success metrics such as revenue, efficiency ratio, customer numbers and deposit growth are no longer sufficient to inform banks’ long-term strategic planning. They do not take into account the speed with which customers’ expectations are evolving, and they cannot paint a full picture of a customer’s likelihood to stick around or grow their business with the institution.

rightwards arrow
View more
bank marketing articles

For example, a customer may maintain a primary deposit account or have a car loan with a bank—which looks good for the institution’s balance sheet—but take their mortgage or wealth management business to a more user-friendly fintech firm with better rates at time of the decision. This means lost revenue for the bank and a deteriorating relationship with the customer—something established ROI measurements likely would not show.

In other words, today’s successes should no longer be considered an accurate forecast for future viability. It’s vital for financial institutions to consider the impact of experiences created, as well as customer engagement—even when these do not immediately translate to cash flow. Return on experience, or ROX, is the new ROI.

A shifting digital mindset

Tech leaders such as Netflix and Uber have set the standard within their respective industries for customer experience. Both leverage individual platforms and sophisticated algorithms to deliver consumers a deeply personalized, relevant experience. This approach holds promise for the banking sector as well, with customization being the key to building an outstanding CX.

In order to redesign the banking experience to center the customer, not products—the way other platform players have—institutions must undertake a significant, cross-channel digital transformation effort. Unfortunately, the financial industry tends to create siloes between functions and the adoption of new, enterprise-wide innovation is often stopped by those who are afraid of change, or those only interested in defending their own “turf.” However, according to Gartner, these rigid institutional mindsets, processes and structures are predicted to severely impact 80 percent of financial institutions by 2030 if they don’t embrace digital transformation.

So, how can banks break down these silos? The first step is letting go of the idea that digital transformation simply means adopting new digital tools. This is a misconception. Instead, financial institutions benefit when they rethink their digital strategies, soup to nuts, and focus on creating engaging, memorable experiences for both customers and employees. Here’s how:

First, banks realize advantages when adopting a single-platform approach that consolidates customers’ financial needs—deposit accounts, credit cards, mortgages, leasing, business banking and investments—in one virtual place.

The easiest way to level up a lagging CX is to eliminate the need for customers to play phone tag with different departments. Or worse, to open up and log into a different app.

Second, banks benefit when they prioritize customer choice when it comes to interactions with the institution. Customers should be empowered to conduct their business however they choose, online, over the phone or in-person. And the experience should be equally smooth and satisfactory regardless of the channel they use. Empowering customers, versus forcing their hand, helps to build loyalty and positive associations.

Combining a unified digital platform with options for self-directedness provides banks with end-to-end visibility into customer behaviors, patterns, needs and pain points. This, in turn, allows institutions to identify which elements of the CX are enjoyable and where expectations still aren’t being met – and to quickly eliminate friction points. This is not limited to CX alone. Customer experience is a great identifier of friction in the process.

At the same time, this holistic view of not just channels and journeys but more importantly, the entire front, mid, and back office, enables banks to view each customer as an individual, allowing for a more tailored approach to retention and upselling.

The kind of digital transformation prescribed above may seem intimidating. Make no mistake, it will require significant organizational investment and buy-in. However, technology has evolved to address the problems associated with legacy systems and siloed functionality, enabling banks to quickly upgrade their tech stacks and get on the right path. The key is identifying technology partners and solutions that will layer over existing technology to unify them as a single platform.

Quantifying the intangible

Locating a way to quantify something as seemingly intangible as ROX is non-negotiable for banks hoping to use it to inform their strategic decision-making. Why? Because this information empowers bank executives to make critical long-term business decisions, such as which digital capabilities to invest in, what organizational adjustments should be made, and more.

The good news is that the tools for making the qualitative quantifiable already exist. Here are three key steps banks can take to establish some rigor around measuring ROX and evaluating the success of their investments in CX:

First, measure customers’ ability to problem-solve with the same efficiency and high-touch service regardless of channel. Determine if products and services are available in all channels. Identify where there is operational friction. Data to gather might include how long it takes for customers to complete a transaction, how many touchpoints are required, whether they experience unwanted hand-offs between departments or channels, and where customers may drop out of the process altogether.

Then, gather direct feedback from customers, such as how satisfied they are with their experiences, whether they recommend the bank to friends and family, to better understand their level of satisfaction and loyalty. Measurements such as Net Promoter Score or the results of customer surveys can help quantify this.

And finally, evaluate how customer behaviors have shifted following investments in digitization or modernization. Have deposits increased? Are customers expressing interest in additional services? How has their engagement with the mobile app changed—such as duration of visits, size of transaction and number of transactions?

ADVERTISEMENT

The goal, of course, is to demonstrate a correlation between an improved CX and increased customer loyalty or satisfaction, to then establish an additional correlation between happier customers and business growth. Over time, banks can expect to identify a direct through-line between investments in experiences and customer attraction and retention.

In short, near-term ROI should no longer be the guarantor of long-term success. The customers who make the balance sheet look great today can be gone in an instant, taking their money to a newer, flashier competitor. Banks looking to stay competitive in this marketplace only stand to benefit from continually investing in and measuring the success of top-notch customer experiences. Placing the customer at the center of the business strategy is the only way to survive.

Vince Bezemer is SVP for the Americas at Backbase.

Tags: Customer experienceDataDigital marketingROI
ShareTweetPin

Related Posts

Survey finds high customer satisfaction with banking apps

Survey finds high customer satisfaction with banking apps

Newsbytes
June 12, 2025

Overall satisfaction with U.S. national banking apps is 669 on a 1,000-point scale, up 18 points from 2024. At the same time, the gap in satisfaction between best-performing and lowest-performing apps and bank websites shrunk to its lowest...

Podcast: Old National’s Jim Ryan on the things that really matter

Podcast: Old National’s Jim Ryan on the things that really matter

ABA Banking Journal Podcast
June 12, 2025

Jim Ryan has led Old National Bank to 250% asset growth. On the podcast, the ABA American Bankers Council chair discusses the bank's growing profile and footprint, his views on deposit insurance reform and the experience of leading...

Fintech startup focused on asset risk builds bank advisory board, gets Citi Ventures funding

Report: Fintech firms show strong fundamentals, growth

Newsbytes
June 10, 2025

According to the report’s analysts, investors are demanding greater maturity, and regulators want more accountability. In addition, fintech firms are adopting next-generation technologies, pushing innovation and forcing other fintech firms and banks to keep up. Of the $378...

OCC issues statement for banks on recent data breach

Trade groups: Financial agencies’ handling of data needs ‘significant reform’

Compliance and Risk
June 9, 2025

Financial institutions are legally required to share sensitive, proprietary and nonpublic information with their regulators as part of the supervisory process. This information can range from capital and liquidity management to cybersecurity protocols. Centralizing large amounts of data,...

Bank community engagement: Yes, you can help bank veterans

Bank community engagement: Yes, you can help bank veterans

Retail and Marketing
June 9, 2025

AMBA partners with the ABA Foundation to recruit banks to provide our nation’s veterans access to safe, reliable and flexible financial products and services.

FHFA finalizes strategic plan for 2022-2026

Marketing Money Podcast: Why leadership matters more than likes

Retail and Marketing
June 6, 2025

For bank marketers, the value of being strategic is great.

NEWSBYTES

In 90th anniversary year, Stonier graduates 182

June 12, 2025

ABA, CBA support maintaining confidentiality of CFPB nonbank risk determinations

June 12, 2025

Survey finds high customer satisfaction with banking apps

June 12, 2025

SPONSORED CONTENT

AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025

PODCASTS

Podcast: Old National’s Jim Ryan on the things that really matter

June 12, 2025

Podcast: What bankers need to know about ‘First Amendment audits’

June 5, 2025

Podcast: Accelerating banking for quick-service restaurants

May 8, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.