The answer is both.
Since banking and financial institutions are largely the same everywhere, service tends to be their most differentiating offering. Customer experience and product innovation revolve around putting people at the forefront of services, actions, thinking, and innovation. Thus, Fintechs tend to be winning so many new customers because they know how to gather feedback and develop products, features, and more, that quickly and efficiently improve customer experience.
Customer Experience
Ask yourself, when you have the chance to give your business to a company that makes the effort to show they care about you as a consumer, or one that simply does not, which one would you choose? Obviously, the one that cares. The overall mindset is no different when the roles reverse, and a consumer has to choose which financial institution to bring their business to. For example, technological advancements and innovations aren’t always just product-focused, but a pivotal part of the customer experience. In fact, everything is customer experience from interior design, the wait time on the phone, to the methods of obtaining personal information. Therefore, even when a new product exhibits superior design, if it fails to put people at the center of its thinking, it can still lead to catastrophic failure.
Product Innovation
New products and features succeed when they are built on the foreground of customer feedback that comes from their experiences. Thus, a budget toward customer experience should definitely not be dissolved altogether. An article from Forbes argues, “Financial institutions that cling to the belief that improving the customer experience (whatever that is) is the key to winning customers and differentiating themselves from their competitors are misreading the trends in the market.” So, while some opinions may lean towards one way more than the other, it is incredibly hard to deny that product innovation can be accomplished without user experience and vice versa.
For example, while Verivend has a comprehensive suite of features including a more accurate picture of monthly cashflow, paperless pay, in-network connection opportunities, real-time communication, and more, these features would fall to the wayside if they didn’t comply with UX. Every feature on the Verivend platform is targeted toward giving B2B consumers looking to transact faster on a more secure platform everything they need to satisfy their customer experience.
A Budget for Both
Therefore, the question shifts from which one should banks be building a budget toward, to how can they be combined to create the best business model right now? Product innovation and CX should merge into one in order to benefit the consumer and the financial institution. In fact, today’s technology is often so associated with experiences, product innovation happens simply by improving that customer experience.