By Jamie Allsop, Managing Partner of Financial Services & Insurance at HTEC
Banks and insurers have spent the last decade trying to cut their way to competitiveness. It worked, for a while. But the game has changed.
Today, it’s about being better instead of cheaper. In a world where people can apply for a mortgage on their phone or get a car insurance quote in 90 seconds, the goal posts have moved. Customer experience now sets the pace.
Grudge purchases demand great CX
Nobody gets excited about buying insurance. Nobody looks forward to opening a new current account or a Lifetime ISA. These are classic “grudge purchases” – things people do because they must, not that they want to. Which means how you deliver these services matters more than ever.
Customers aren’t looking for bells and whistles. They want ease. Seamless, intuitive and, above all, fair. If your app crashes, your call centres take a morning to answer, or your pricing feels opaque, you’ve lost them. You’re handing your business to someone else. Customers aren’t afraid to move anymore. And with switching now easier than ever, poor experience is a dealbreaker. Many financial institutions are weighed down by legacy systems. Some are decades old and still form the technical backbone of critical operations. Up to 70% of the software used by Fortune 500 companies was developed over 20 years ago. These monolithic platforms were never designed for the modern, mobile-first customer. They’re rigid and expensive to maintain. Every pound spent propping them up is a pound not spent on innovation.
Imagine an insurer relying on more than a dozen systems for frontline staff to complete the same core task, each one layered on top of the last as a short-term fix. The outcome? Wasted time, inconsistent data, and a frustrated workforce. By consolidating those fragmented journeys into a single, intuitive interface, productivity can improve significantly and, more importantly, transform the end user experience.
The cost of stalling is frustrated customers, stalled digital transformation, and an open door for agile, tech-savvy challengers. These firms have been dominating headlines for a decade and are becoming the go-to for new generations of customers.
Legacy IT is dragging you down
When your tech stack is built on spaghetti code and outdated architecture, even small improvements become massive projects. Want to introduce real-time policy updates? Enable biometric login? Offer a single-view dashboard? Forget it – the systems can’t cope.
And customers are noticing. Account and policyholders now expect the same level of ease, personalisation, and transparency from their bank or insurer as they do from their favourite e-commerce site. The institutions that win tomorrow will be the ones that stop thinking like financial institutions and start thinking like tech companies.
Some leaders are already doing just that. They’re ditching the one-size-fits-all platforms in favour of tailored, modular solutions that can evolve with customer needs. They’re embracing APIs, cloud-native infrastructure, and real-time data to create responsive, personalised experiences. Importantly, they’re investing in custom technology.
Off-the-shelf won’t cut it
You can’t deliver a standout experience with the same tech stack as everyone else. Off-the-shelf tools have their place, but they’re built for scale. Not uniqueness. When every bank uses the same chatbot or onboarding workflow, the only thing you’re competing on is price.
Custom technology changes that. It lets firms build around the user, not the other way around. When done right, it becomes something fundamentally different. That could mean a claims journey that adapts based on policy type and policyholder profile, or a savings app that gamifies financial goals meaningfully to account holders. When these tailored features are all cleanly integrated and user-led, it becomes something entirely different. You don’t get that by buying someone else’s platform.
The common thread is empathy. Great tech understands the person on the other side of the screen.
Self-service is another area ripe for reinvention. Customers increasingly want to manage their money, policies, and investments on their own terms. Too many FS firms still treat self-service as a bolt-on, not a strategic pillar to their traditional channels. The challengers are building self-service into the experience from day one, giving users full control with minimal friction.
A well-designed digital experience builds trust. It turns reluctant users into advocates. And in a market where retention is everything, that counts.
Experience, experience, experience
The road to great CX isn’t paved with minor upgrades. It takes bold decisions – tearing out what no longer works, breaking down silos, and putting the customer at the heart of every interaction. That means investment, designing with empathy, and accepting that compliance and control alone won’t deliver loyalty.
The firms already moving in this direction are shifting the market. They’re rebuilding their tech foundations, aligning around user needs, and rethinking what “good” looks like for their customers. Customers don’t want the cheapest provider. They want the one who listens, adapts, and delivers. That’s a culture issue. And it starts with putting the customer, not the balance sheet, at the centre of every decision.
Cost-cutting might keep the lights on. But CX will bring new customers through the door and keep them coming back. If you’re not designing for them, rest assured: someone else is.