7 Ways to Improve Customer Service in the Banking Industry

Banking customer service sits in a strange spot. The stakes are higher than most other industries, yet it often feels like many banks treat customer service as an afterthought laid on top of their core operations.

That reality shows up in the numbers. 59% of Americans say good customer service is the number one reason they stay with their bank, and a significant chunk (37%) say they'd switch if another institution better matched their needs.

I have a somewhat unusual vantage point on this:

I'm American, but I've traveled and lived abroad for almost a decade. I now bank between the United States and the Netherlands. I’ve dealt with U.S. and European banking, and I ultimately started to do most of my banking through a digital-only bank because it makes my life easier. I have both personal bank accounts and business bank accounts. 

Interacting with banking software and customer service across so many locations and sectors has made it apparent which frustrations are just because “banking is hard" and which pain points are tied to specific, fixable choices some financial institutions have made (or not made).

This post covers seven ways to improve customer service in banking, covering both the digital banking experience and the in-person branch experience.

1. Train branch staff to front-load requirements

Busy bank branches often station a greeter or concierge at the door, someone whose job is to ask what you need and route you accordingly. It’s a good model, but it usually stops at “what do you need,” and doesn’t ask, “Do you have everything and everyone with you that you need?” 

As I mentioned, I live in Europe. I also have aging parents, with my mother in the early stages of Alzheimer's. If something happens to my father, the only way I can guarantee that my mother’s bills are paid is to be a joint holder on their bank account. Last time I was in town, Dad and I went into the local branch to get that done.

We told the greeter why we were there, then waited in the lobby for the better part of an hour before sitting with a banker. We then learned that my mother would need to be present to sign the paperwork. And no, we weren’t allowed to sign it then and have her come in to finish the process later. We all had to be there together.

Why didn’t the greeter ask us if all current account holders were with us? My parents' house is five minutes up the road. It would have been no big deal for one of us to wait while the other went to collect her.

Instead, we effectively ended up spending an hour at the bank to schedule an appointment to come back the next day.

A quick checklist in the hands of the greeter would catch this before the wait starts:

• Identify the request type immediately. Adding an account holder, closing an account, disputing a large transaction, etc. Most common requests have known requirements.

• Check requirements. Ask if all account holders are present and if all necessary documentation is in hand. 

• Give the customer a real choice. If the customer doesn’t have everything or everyone needed, offer options. “It’s going to be a 45 minute wait. If you live close, maybe one of you could go get her?”

Banks can reinforce this process before customers ever step into a branch. Appointment booking flows, confirmation emails, and online help articles can all explain what’s required for common requests. But these should only serve as a complement to, not a replacement of, a quick verification upon arrival. In my example above, we merely walked-in while running other errands. It never occurred to either of us to check the website.

Why this matters

This is a low-cost, high-impact fix. It doesn’t require new tech or compliance changes, but it can have a meaningful positive impact on customers and reduce unnecessary customer frustration.

2. Keep context intact when customers switch channels or agents

Switching from the mobile app’s chatbot to a phone call means re-explaining everything to a human. Getting transferred mid-call to a different agent usually means re-explaining everything again.

I budget at least an hour every time I have to call my bank because if I’m at a point of making a phone call, I know I’ll likely be escalated several times and have to re-explain myself to every agent. In an era when tech is meant to make the administration of our lives faster, that’s just unacceptable.

There are a few concrete ways to fix this:

• Give agents visibility into cross-channel history. If a customer started a conversation in chat or email, whoever picks up the phone should see that history before saying hello.

• Pass notes forward on every transfer. A transfer should come with a summary of what's already been said, not just a name and an account number. 

• Ask the customer to confirm, not repeat. "I see you're calling about the dispute you opened yesterday, is that right?" takes ten seconds. Making someone re-explain the whole thing from scratch takes five minutes and costs you goodwill.

• Track repeat-contact rate as its own metric. If a meaningful share of contacts are customers following up on something unresolved, that's a signal handoffs are failing somewhere.

Why this matters

Handoffs are where trust erodes fastest. A customer can tolerate being handed off. But being asked to start over from zero signals that nothing they've already said mattered, and that the bank's systems (and people) don't talk to each other. 

The moment the customer learns they’ll need to be handed off a second time, they don’t just wait on hold; they stew in their frustration, already bracing to re-explain everything before the third agent has even picked up the line.

This isn’t a great environment for your customer service staff either. Your most senior or specialized agents are the ones the most frustrated customers are landing with, which means they’re likely spending their day talking to largely frustrated customers. That’s a sure recipe for burnout and high turnover. 

3. Map the full customer journey across all channels

Since the worst friction points are often the handoffs between channels, it’s worth making note of those friction points. A customer starts something online, gets stuck, calls in, gets transferred, then ends up driving to a branch to finish what should've been a five-minute online task.

Before implementing any channel-specific fixes, map what the journey actually looks like on the customer side. Here’s a simple way to start:

• Pull your top five contact reasons. Start with whatever’s driving the most customer service volume (not the most interesting edge cases).

• Trace each one across every channel it touches. Where does it start? Where does it get stuck? Where does the customer have to repeat themselves? Where do customers drop off?

• Talk to frontline staff. Customer service agents and branch employees usually know exactly where customers get frustrated because they're the ones hearing about it in real time.

• Flag every handoff point. Channel switches, agent transfers, and department reassignments are where friction compounds. Each one is an opportunity for context to get lost.

• Fix the handoff, not just the channel. A better mobile app doesn't help if the problem is what happens when someone leaves the mobile app for a phone call. Focus on streamlining each handoff by passing along context and reducing customer effort.

Randstad Digital ran this kind of journey mapping with a credit union, focusing specifically on debit card disputes and credit card issuance. By mapping what members actually experienced step-by-step, they found the exact points where friction was building. Implementing fixes improved first-touch resolution, simplifying processes and automating dispute resolution.

Why this matters

Fixing individual channels in isolation can make each one look better on paper, but the overall experience can still be just as frustrating for real-world customers. Understanding the full customer lifecycle is the only way you'll actually find where customers are getting stuck.

4. Build support access that works in an emergency

Most customer support systems are designed around the assumption that everything is working as expected. Customers have access to their email, their phone, their password manager, their authentication device, and their ID.

But support isn’t at its most valuable when everything is working. It’s meant to be there when something has gone wrong.

Digital-only banks (aka “neobanks”) are a rapidly growing part of the banking industry and they provide a perfect example of poor emergency support protocols. 

To help you with the story I’m about to tell, it’s first worth understanding that neobanks are often the leading choice of people who travel frequently, live as digital nomads, or live outside of their home country. For instance, Revolut built its business on multi-currency accounts and low-fee exchange rates which were a "huge draw for frequent travelers and expatriates," and N26 markets its cross-border features to appeal to traveler types. 

I share that because people who live on the road or abroad (i.e. people like me) are usually a big part of their target customer base.

Which makes it especially absurd that their support policies are often built entirely on the assumption that the user has a working smartphone in hand. What happens if that smartphone gets lost, stolen, or water logged (a very common occurrence for digital nomads)?

Basically, it sucks to be you. 

My phone was stolen while I was traveling in Oaxaca, Mexico. I could still log in to the N26 website, but the website doesn’t support chat or any banking activity. You can see your balance and freeze a card. That’s it. 

I sent them an email through a general support address, which took hours to hear back on, and they told me the only way to get access to the account was with a smartphone. But I couldn’t buy a new smartphone, because all of my money was in savings, and I needed to move money to the account attached to my debit card…so I could buy a phone.

This customer service interaction was slow and painful, especially because they kept doubling down about how the only way to move money was to access the account through a smartphone. One agent even suggested that I should just find someone with a smartphone who would let me install the app on it.

I was alone. In Mexico. With access to no more than €20, being told to trust a stranger enough to put my bank account details on their phone, all in the name of “security.”

And this is the normal policy for most neobanks: no phone = no access.

Get to know your customers so that you understand common scenarios for them, then build easy support paths into your processes. Don’t just test the happy path. Test the crisis path. Ask what happens if a customer loses their phone, forgets their password, has their wallet stolen, has their identity stolen, is hospitalized, or is stranded overseas. 

Ask yourself what happens when a customer can’t access the channel you expect them to use. Then build a recovery process around that scenario. For banks that might include: 

• Offer at least one support channel that doesn’t require being logged in. A phone number, an email address, or a chat option where a customer can reach before proving who they are.

• Build a specific "I've lost my device" protocol. This should be a known, documented path, not something a support agent has to improvise on the spot.

• Allow identity verification through a second channel. If a mobile phone is compromised, a customer should be able to verify who they are some other way (document upload, a landline call, or whatever fits your risk model) rather than being told to use a stranger’s phone.

Why this matters

Security measures built to protect the customer that don’t work during a crisis are pointless. Instead of comforting security, they begin to feel like a bank holding your money hostage. Good customer service isn’t measured by how well your system and processes work under ideal conditions. It’s measured by how well it works when the customer is having one of the worst days of their life.

5. Don't neglect phone support for customers who still prefer it

It's easy to assume digital-first means digital-only, but a meaningful share of banking customers still prefer a phone call over live chat, in-app help, or email. Modernizing the phone experience matters just as much as building a good app, even if it gets less attention.

Outdated IVR systems — the automated phone menus customers navigate before reaching a human — are often clunky, button-based, and slow. That’s friction right at the start of a call before a customer even gets to explain what they need.

A credit union's IVR modernization with Waterfield Tech replaced a button-based menu with speech-enabled navigation and added callback options so customers didn't have to sit on hold. The result was a meaningful drop in abandonment rate, and agents spent less time on routine account questions that the new system could route or resolve on its own.

Why this matters

A polished mobile app doesn't help a customer who never opens it. Phone support isn't legacy infrastructure to tolerate until everyone migrates to digital; it's a channel plenty of customers actively choose. Treating it as an afterthought shows up directly in abandonment rates and agent workload.

6. Use AI to speed up internal processes and empower agents

A lot of banks invest heavily in training agents on policies and procedures but leave them working with fragmented systems. Even a well-trained agent ends up putting a customer on hold to check something in another system they don't have access to, or transferring them to someone else entirely just to look something up. 

The customer experiences that as "this person doesn't know what they're doing," even when the real problem is tooling, not competence.

The fix is giving agents a single place to see account history, balances, and relevant flags so they're not toggling between systems or guessing at information they should already have in front of them. You can use a connected AI platform to read the data from the systems already in play.

MSU Federal Credit Union did this for their own staff, creating a virtual agent employees could query in real time instead of putting members on hold to check with a manager or another line.

How to use AI for internal processes is covered in depth in our companion piece on adopting AI in financial services customer service, so we won't go deep on it here.

Why this matters

A customer can't tell the difference between an agent who doesn't know the answer and an agent who knows it but can't access it. Both look like incompetence from the other side of the conversation. 

Fixing the tooling fixes both problems at once, and it's usually cheaper than you'd think since it's often a matter of connecting systems that already exist rather than building or buying something new.

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7. Modernize how you verify identity

Knowledge-based authentication (KBA) includes quizzing customers on old addresses, past loans, or what car they owned two decades ago.

These all assume people have lived tidy, stationary lives. Anyone who's moved frequently, traveled internationally, or just lived a full life can fail these questions pretty easily. 

Worse, the answers to most KBA questions are exposed in data breaches and public records, meaning fraudulent actors can often answer them just as easily as the actual customer can.

Here’s a personal example: 

Between the ages of 18 and 32, I lived in three different states with 18 different addresses. After 32, I didn’t stay in a single country longer than six months. As a result, I was denied a new credit card last year, despite having excellent credit. The issuing bank assumed my application was fraud because I failed three of the five KBA questions they asked me. 

I was fortunate to have been applying for the card while on a visit to the U.S., so I at least had the option to verify in person. But that meant driving an hour to the branch, explaining the situation, and then waiting around for an hour while the branch worked out how to relay my in-person identity verification to the credit card team (seems like they could benefit from tip #3 of this piece). 

KBA isn’t universally used in banking. In the Netherlands, identity verification typically relies on document verification (like a passport photo through a secure channel), voice identity, or DigiD (the national digital identity system), not quizzes about your personal history. KBA is more of a U.S. banking habit than an industry necessity.

The National Institute of Standards and Technology's digital identity guidelines state plainly that KBA "does not constitute an acceptable secret for digital authentication" and explicitly bar services from using security questions like "what was your first pet's name." U.S. government agencies like the IRS have already made this switch. 

Voice biometrics and device recognition are increasingly used specifically in banking call centers, but a lot of older banks are stuck on outdated systems, and they aren't prioritizing a switch.

I fully acknowledge that this isn't a decision customer support leaders can make alone. Moving off KBA touches compliance, fraud prevention, IT, and legal, but support teams have a unique advantage that other departments don’t: they see the friction created by these decisions every day. With the right data, support can show leadership not just that customers are frustrated, but how often these failures happen, who they affect, and where the business impact is.

For example, support teams can use this data to identify:

• How often customers fail KBA checks despite being legitimate

• How many support contacts are created because of authentication failures.

• Where customers abandon applications or accounts because the verification process is too difficult.

• How much time support spends resolving these cases.

In the meantime, support teams don’t have to wait for a complete overhaul of authentication processes. They can look for smaller improvements:

• Push for a fallback path, even before the bigger system changes. If a customer fails KBA, is there a documented alternative that doesn't just end the interaction? If not, that’s worth flagging regardless of whether KBA itself changes.

• Understand what your existing systems already support. A lot of core banking and identity verification vendors already offer MFA or document-based alternatives. Sometimes it's a matter of enabling something already in the contract, not a full system overhaul.

Why this matters

Over 80% of financial institution call centers still rely on KBA, largely due to legacy infrastructure and cost, even though it’s no longer recommended. What’s proven to work and what banks are actually doing are two different things, and customers are the ones paying for it.

How to know if your bank’s customer service is improving

A single KPI never tells the full story. Some meaningful customer service metrics that are worth tracking together for financial institutions include:

• CSAT (customer satisfaction score): The fastest read on how a specific interaction landed, but it says nothing about deeper loyalty or churn risk.

• NPS (Net Promoter Score): Useful for tracking overall sentiment over time, but too broad to tell you which specific tip actually moved the needle.

• CES (customer effort score): How much work a customer had to do to get their issue resolved. This one maps directly to a lot of what's in this list, since so much of it is about removing effort (repeating yourself, waiting through requirements you didn't know about, hunting for a working channel).

• First contact resolution: Whether an issue got solved the first time, or bounced between channels and agents. Directly tied to tips like keeping context intact and arming agents with real access.

• Complaint resolution time: How long it actually takes to close out a formal complaint, not just a routine request.

• Abandonment rate: How often customers give up before reaching a resolution, whether that's hanging up on a phone menu or walking out of a branch line.

On their own, none of these will tell you whether a specific change worked. If you modernize your IVR and CES drops the following quarter, that could be a good sign. But track it alongside abandonment rate and complaint volume before declaring victory, since plenty of other things shift customer sentiment at the same time.

Start with the easy customer service win, then go deeper

Most of the banking customer service recommendations above don’t require a complete overhaul of your operation. 

Some of them are quick and free: a checklist at the door, a shared note field between agents, a fallback path when a customer's phone isn’t available at the worst possible time. Other pieces, like retiring KBA, will take years and buy-in from people who don't report to support at all.

What’s important is keeping the customer at the center of your operation rather than treating customer service as something bolted on after the fact. Get that posture right, then take consistent action to make your customer experience smoother, easier, and more reliable.