Banks collect more customer data than at any point in history.
Yet I am no longer sure they understand their customers any better.
Every day, millions of customers hesitate before pressing “Confirm”. They pause before transferring money. They read the same warning twice. They abandon applications without telling anyone why.
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Banks record the click.
They rarely understand the hesitation.
That may be one of the biggest challenges facing modern banking.
Have banks become experts in customer behaviour while slowly forgetting how customers actually think?
There is an important difference.
Behaviour tells us what customers did.
Thinking tells us what almost stopped them from doing it.
Banking increasingly measures the first.
It spends far less time understanding the second.
Why banks need to relearn how customers think
Banking has spent twenty years learning how customers click. It may now need to relearn how customers think.
A customer pauses before pressing “Confirm”. They read the same sentence twice. They hesitate before transferring a large sum of money. They abandon a mortgage application halfway through. They receive a fraud warning and suddenly wonder whether the payment they were about to make is genuine.
These are not technology problems.
They are human moments.
Yet these moments rarely appear in board papers, executive dashboards or monthly performance reports.
For much of my career in banking, I have watched our industry become exceptionally good at measuring activity. Every year we build better dashboards, collect more data and produce more sophisticated reports. We know digital adoption rates, transaction volumes, call handling times and operational performance with remarkable precision.
Those measures are useful.
But they answer only one question.
What happened?
They rarely answer the more important question.
Why did the customer hesitate?
Customers rarely judge a bank by the elegance of its technology. They judge it by something far simpler.
Do I understand what is happening?
Am I making the right decision?
Can I trust myself to press this button?
That is how customers experience banking.
Not through performance indicators or management reports.
Through moments of uncertainty.
Has banking confused measurement with understanding?
The industry has become brilliant at collecting information.
Understanding human judgement is a very different skill.
Ironically, the more digital banking becomes, the more important those moments become.
Years ago, a customer making an important financial decision often had someone sitting across a desk. Questions could be asked. Explanations could be given. Reassurance was immediate.
Today, many of those decisions are made alone.
A mobile phone has replaced the conversation.
The screen has replaced the adviser.
The customer carries a greater share of the responsibility.
Twenty years ago, uncertainty was often shared with a banker.
Today, uncertainty is often carried by the customer alone.
That is one of the biggest changes digital banking has quietly introduced.
Where banking needs to pause and reflect
We often celebrate removing friction from customer journeys. We proudly announce that opening an account now takes five minutes instead of twenty. We measure success by speed.
Banking has become faster.
I am not convinced it has become easier to understand.
Those are not the same achievement.
A customer can complete an application in record time and still spend the next two days wondering whether they have made a mistake.
The journey was efficient.
The decision was not comfortable.
Those are two very different outcomes.
Artificial intelligence will make this challenge even more significant.
AI will help banks detect fraud more quickly, personalise services more effectively and automate decisions at unprecedented speed.
That is genuine progress.
AI cannot explain uncertainty
It cannot always recognise hesitation.
It cannot reassure someone making one of the biggest financial decisions of their life.
As technology becomes more sophisticated, the responsibility to communicate clearly becomes even greater.
Perhaps the industry has been asking the wrong questions.
Instead of asking how many customers completed the journey, perhaps we should ask how many completed it with confidence.
Instead of asking how quickly a customer reached a decision, perhaps we should ask whether they fully understood it.
Instead of measuring only customer behaviour, perhaps we should spend more time understanding customer judgement.
That requires a different conversation in every boardroom.
It would mean watching customers rather than simply measuring them.
Listening before analysing.
Observing before optimising.
The banking industry has achieved extraordinary progress over the past two decades. Digital innovation has made financial services faster, more accessible and more efficient than ever before.
Efficiency alone has never been banking’s purpose
Banking exists to help people make important decisions about their money, their families, their businesses and their futures.
That is, and always will be, a profoundly human responsibility.
Banks have become exceptionally good at understanding transactions.
The next challenge is to become equally good at understanding the people behind them.
Because customers are not simply completing journeys.
They are making decisions.
And if banks spend as much time understanding how customers think as they do measuring what customers do, the future of banking may look very different from its past.
Twenty years ago, customers depended on banks to make good decisions. Today, banks increasingly depend on customers to make them alone. That may be the biggest change in modern banking. It is also the question I believe every banking leader should now be asking.
Dr Gulzar Singh, Senior Fellow – Banking & Technology, Chief Executive Officer, Phoenix Empire Ltd
