Luxembourg: How Banks Are Tearing Down And Rebuilding Customer Experience

Last Updated: 17 September 2018
Article by Jean-Pascal Nepper

Most Read Contributor in Luxembourg, September 2018

"The customer is always right!"

So goes the motto of good business. For a century or more, entrepreneurs, shopkeepers, and global corporate heads alike have been guided by this principle, but perhaps it needs to be slightly updated.

Because, today, customers are not only right—they're also telling you how to run your business.

"The customer has spoken!"

Perhaps this one is better suited to our 2018 reality. Look in the finance sector, for example: the Viacom Millennial Disruption Index has found that 60% of millennials think that big banks aren't designed to service their generation, and 33% believe they won't ever need a banking institution.

That's one third of a whole generation who can imagine a world without traditional banks at all! Furthermore, 53% of the 10,000 respondents see no difference between the institution they use and other banks.

The message is that customers are jaded with the current incarnation of the whole banking system. They are open to alternative money institutions; this bank is as good as any other; and their banking experiences are nothing to write home about.

Tech companies can wreck companies

In that context, banks are vulnerable to new types of digital competitors. Even so-called traditionalists (at least a high proportion of them) use banking services via their mobile phones, an interface exploited very adroitly by many new, digital companies. The momentum for brand-new banking seems to be strong: one might even ask whether banks will survive as the primary type of money-holding institution at all. Perhaps open banking providers or tech giants will take the stage.

Indeed, the likes of Google, Facebook, and Amazon have certain advantages: they benefit from strong brands, stable infrastructures, and huge user bases. They are able to utilise the existing banking infrastructure and already have expertise in developing new customer-friendly services and products. Furthermore, 73% of generation Y would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank.1

One advantage that digital companies have over banks is, in many cases at least, a head start in terms of tech integration: there is a shift currently observable from siloed systems, where every need has a corresponding technology or software, towards an integrated system where there are no standalone needs and everything is interconnected.

While around a quarter (27%) of banks still see fintech as a threat, 0% of banks can prevent third-party players from getting customer data, which is rapidly becoming the most prized asset in the financial sector. Banks must therefore choose how to approach this shift in technological power and how to deal with newcomers whose operations run on powerful, interconnected IT systems that they've built from the ground up. No matter what, APIs are going to be opened up, and this could be the excuse—the opportunity—for banks to pursue a new, digital ecosystem: not just revamped processes, but an all-encompassing transformation involving a total rethink of business model and revenue sources.

Fintechs and other disruptive companies are also known for speed. If banks quicken their IT workings, they will stand a competitive chance by dramatically cutting costs as well as the time-to-market of their products.

No matter what's happening backstage, customers will only care about one thing: their journey and experience of the product or service. In a banking context, this means redefining people's relationship with money.

Five hot CX items for banks

Research by the Economist Intelligence Unit has revealed the top five areas consumers identified as leading to a positive experience:

  1. fast response to enquiries or complaints
  2. simple purchasing process
  3. ability to track orders in real time
  4. clarity and simplicity of product information across channels
  5. ability to interact with the company over multiple channels

All the above come down to one attribute: agility. In the context of banking, agility means that the bank is flexible on a deep level—and thus able secure enduring nimbleness.

How can these items be benchmarked? Customer experience may be harder to quantify than other, more numerical fields—but it is possible, for example using a metric of growth combined with stickiness. By growth I mean how well a bank can attract new customers and more business from existing customers; by high stickiness I mean low customer attrition.

Ultimately, customers will take fast, easy, and accurate technology for granted. Over and above that, they want to be treated well and to perceive that someone is listening to them if they complain, seek assistance, or respond to new offers.

The social way

Historically, banks have considered "interaction" to be an onsite meeting between client and financial advisor during daytime working hours, but that model is unfit for today's customers who want 24/7 digital access. Retaining customers seems to be related to agility, but also to the bank's ability to interact with customers across different channels.

The commerce industry, for example, has already matured in digital platforms, whereas banks are only starting now to gain momentum. Earlier digital efforts by banks tended to focus simply on marketing through the new medium, but as technology matures—along with the regulations and security surrounding it—more fundamental changes have become possible.

Ian Pollari, Global Fintech Co-leader and Head of Banking for KPMG Australia, comments that "changing customer behaviour is another significant factor. Customers spend the majority of their time on digital (e.g. social, messaging) platforms. Hence, financial institutions must position themselves where their customers are, and create a corresponding digital platform strategy relevant for their market position, customer service proposition and strategic objectives."

Nowadays most banks are striving to become social businesses, to understand that customer word-of-mouth is worth more than paid ads and marketing collateral. Of the 50 largest banks in the world, over 90% use Facebook and 88% Twitter. However, there are two ways for banks to use social networks: they can repeat old branding patterns, or they can adapt to the local norms of these new social communities.

An easy way of adhering to the latter is to answer user questions online, a practice called social customer care. Even if you can't go into detail on a public platform, at least directing the use to another channel shows engagement and that you're part of that online community.

Striking the right balance

Without a doubt, customer experience is today's battlefield. Eighty-eight percent of CEOs are concerned about the loyalty of their customers ( KPMG Global CEO Survey 2016), so it's no wonder customer experience is poised to overtake price and product as the number one brand differentiator.

What's more, over the next five years, almost 89% of CEOs expect to be competing on the basis of customer experience, yet only 7% currently deliver it effectively, according to Forrester. And KPMG's US CEO Outlook 2017 found that only 56% of CEOs say they can confidently articulate how they can create value for their customers.

We understand the challenge: companies need to respond to customer needs while, at the same time, better understanding the value those customers bring to the enterprise.

Read more customer experience insights in the Khube Mag special CX edition.


1 Viacom Millennial Disruption Index

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions