CEO and cofounder of Catchpoint, the Internet Resilience company.
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When was the last time you changed banks? Your bank is betting you haven’t—and never will. But in today’s fiercely competitive market, resting on legacy isn’t enough. Long-standing financial institutions must now look beyond the marble and columns to redefine competitiveness. How do they achieve this? By taking cues from the dynamic world of e-commerce.
From immediate page loads to streamlined transactions, online stores have raised the bar for digital experience—a standard that banking platforms must now meet to satisfy modern customers’ expectations. Let’s delve into what makes a bank’s digital presence resilient and dependable, learning from the leaders in e-commerce and setting the stage for a new era of banking defined by a user experience-led approach.
Measuring Up: The Digital Performance Of Today's Banks
Catchpoint recently put the digital performance of over 50 banking websites under the microscope, measuring everything from DNS time to overall site availability.
Three banks stood out: Franklin Templeton, Bank of New York Mellon Corp and Thrivent Financial. Their winning formula? Unsurprisingly, they were the same indicators of a high-performing and reliable e-commerce site: stellar performance and unwavering availability, including webpages that loaded in a blink (under two seconds, to be exact) and a remarkable 99.9% uptime.
Here are the key metrics we looked at.
• Availability: The percentage of time the website was up and running.
• DNS Time: The time taken to resolve the domain name into its corresponding IP address.
• Time To First Byte: The total time from the initial DNS request to receiving the first packet of response from the server.
• Document Complete: The time from when the initial URL request is made until the browser triggers the onload event.
• Webpage Response: The time until the last byte of the final page element is loaded.
• Largest Contentful Paint: The time when the largest content piece becomes visible within the viewport.
• Cumulative Layout Shift: Measures the unexpected shifting of webpage elements while the page is loading.
How Banks Became Complacent
It’s troubling that many financial institutions have yet to fully embrace these vital metrics of digital performance, underestimating their impact on user experience. From the customer’s perspective, the user experience of many banking platforms often seems like an afterthought.
The irony is that this is a situation we, as customers, have contributed to.
Most of us stick with our first choice of bank to avoid the hassle of switching, leading to industry-wide complacency. Yet, as other sectors raise the bar, banking must accelerate its pace of innovation to keep up with customer expectations.
E-Commerce's Road To Resilience
At the turn of the millennium, the e-commerce sector faced its trials by fire as Black Friday and Cyber Monday stress-tested their online capabilities. No giant was immune, with even industry leaders like Amazon grappling with service interruptions. These were more than mere technical glitches; they were lessons in the cost of downtime.
The response was decisive and transformative. Investments surged in load testing, internet performance monitoring and advanced toolsets. Through a commitment to resilience, these platforms turned potential failures into robust digital fortresses.
This journey offers invaluable insights for the banking sector, which often encounters high-traffic periods. From 401(k) enrollments to tax seasons, these industries must now emulate e-commerce’s proactive stance, investing in strategies that enable resilience during peak periods.
Redesigning Financial Services For The Digital Age
In Europe’s financial landscape, a new breed of banks is redefining success without a single brick-and-mortar location. Digital-first entities like Monzo and Revolut are capturing the market with their unwavering commitment to digital-first banking, emphasizing agility, speed and a mobile-centric ethos. They resonate with the digital-savvy youth, for whom traditional banking rituals like visiting a teller are relics of the past.
For someone like me, who has no use for traditional banking services, the rise of digital-native banks is a breath of fresh air. Their ethos of performance-as-experience is proving to be a key differentiator. With trailblazers like Robinhood, the finance industry has started this revolution, turning the cumbersome stock trading process into a seamless app experience. For legacy banks, the message is clear: Evolve with the digital tide or face the risk of obsolescence.
Across the U.S., this transformation is already underway. Banks like USAA are demonstrating that an online-only model isn’t just viable—it’s excelling, reshaping customer interactions without a physical footprint. Capital One is pushing the envelope further, reimagining banking spaces as community hubs, complete with Wi-Fi and coffee, where banking becomes a part of customers’ daily lives.
Going Digital: Key Priorities For Banking In The Digital-First Era
What should companies prioritize when shifting to a digital-first banking model? Focus on simplifying the user journey. Begin by identifying the most frequent transactions and making them simpler and faster. Ensure your platform’s design adapts seamlessly across devices, from mobile to desktop. Implement end-to-end monitoring of the customer journey from the user’s perspective to proactively address potential issues before customers are impacted. This dedication to ongoing enhancement and customer-focused design is crucial for remaining competitive in the digital era.
Steering Finance Into The Future
The emergence of open banking has the potential to shake up competition in the industry. It promises to level the playing field by allowing third-party developers to create apps that can access banking data. This could spark competition, drive down costs, improve technology and elevate customer service. No doubt, new regulations like DORA, which focuses on the digital resilience of the financial sector, will further accelerate the adoption of a digital-first mindset.
As the digital banking wave advances, maintaining relevance hinges on prioritizing user experience and embracing innovation. The shift toward agile, customer-focused services isn’t just on the horizon—it’s here, dictating the pace for success in our rapidly evolving financial landscape.
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