In an interaction with Adlin Pertishya Jebaraj, correspondent of Finance Outlook Magazine, Anil V. Pillai, Director, Terragni Consulting (P) Ltd, shares how behavioral science and neuroscience are changing banking CX, taking it from transactional to trust, empathy, and emotional safety. He highlights the measurable ROI, tools, challenges, and future of neuroscience-inspired banking experiences. Anil is a behavioral strategy expert by profession. His expertise in consumer experience made him the first Indian to be on the editorial board of the Neuromarketing Science and Business Association - a global body of consumer neuroscience. 

How is the adoption of behavioral science and neuroscience influencing customer experience strategies in banks now? 

The combination of neuroscience and behavioral science is fundamentally transforming the customer experience strategy within banking practices now shifting the emphasis on the interface to inner space. Conventionally, banks have focused on observable behavior, that is, what customers do. It is now moving towards trying to know what makes customers feel and behave the way they do.  

The mission is redefined in behavioral science: it is not about selling but minimizing decision fatigue and not all about access but about the establishment of emotional permission. Consumer neuroscience further elaborates by pointing out how stress, ambiguity and status threat which are the bread and butter of the traditional banking business can trigger fear circuits in the brain, destroying trust.  

The new Customer Engagement and Experience (CEE) battleground is on how to make the customers feel safe, smart, and in charge despite their financial vulnerability in certain times. The question of how doing this makes the customer feel has taken the place of the critical question of Can the customer do this?

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How are the leading banks measuring ROI in Rupees, Dollars and Cents from neuroscience-based CX improvements? 

It is essential to point out that improvements of CX based on neuroscience do not work independently. Consumer neuroscience gives a profound, unconscious knowledge that governs strategic, tactical and operational transformations. The actual worth is that it is not what the customers say but what they think and feel. Even major banks are leaving behind the use of Net Promoter Score (NPS) and finding measures that follow the money.  

These are the low rates of abandonment, increased wallet share, less repeat calls and increased contextualized product uptakes. One of the biggest banks in India re-engineered the lending process with behavioral indicators and increased completions by 22%. A different bank re-packaged its denial messages, to lessen the customer shame and this turned out to be an effective bounce back and customer retention. The main learning is evident; in case the emotional friction is less, customers will stay more involved and show increased expenditure.

“Trust, which was traditionally viewed as intangible, has an apparent revenue model of measurability.” 

What tools are banks using to gather behavioral and neural data to improve CX? 

Major banks are implementing a multi-layered tool kit that is able to capture conscious and non-conscious signals. On the subconscious level, they apply Implicit Association Testing (IAT) to access the underlying attitudes and projective methods to reveal the more motivational needs. They also research on digital body language, such as the duration of hesitation, hovering, scrolling, and abandoning activities of the user.  

Behavioral analytics does not just stop at the level of clicks but provides insights on avoidance, freezing or drop-offs of behavior that demonstrate friction. Besides this, conversational AI and sentiment analysis are also used with increasing frequency on call-center interactions and chatbots to decode not only what was said, but what was felt. By means of this multi-dimensional method, banks can gain empathy on a large scale, which would enable them to know what their customers are doing and what they are feeling. 

What are the biggest challenges banks face in applying behavioral science to CX? 

Organizational inertia is the greatest obstacle rather than customer resistance. Numerous banks are designed with obsolete systems where products are the key, processes are the priority, and reasoning is the consideration of thoughts and feelings. The behavioral science has a way of revealing unpleasant facts: bad design leads to bad decisions.  

It is important to include candour in recognition of this, but banking cultures are usually more sensitive to compliance. Other obstacles are due to cultural resistance whereby the culture of being conservative by relying on large decks of research overrides the intent to explore new behavioral strategies. Risk aversion is also contributing because the institutions usually seek the advantages of innovation without going into the unknown world.  

In addition, the isolated character of banks is fragmentative since marketing, UX, and risk operations are seldom synchronized with each other. The outcome is a fragmented customer experience that portrays the internal segmentation of the institution as opposed to customer needs. 

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In 3–5 years, how will neuroscience-informed strategies shape financial customer experience? 

Neuroscience-informed strategies will help banks to provide smarter, quieter, and more empathetic experiences in the next three to five years. Banking interfaces will also change to become more responsive to customer stress and decision fatigue, with nudges being increasingly subtle, sensitive to when they need to intervene and when they need to withdraw.  

The use of language and design will be repackaged to gain trust before requiring sensitive information and the contact centers will be repackaged to adopt emotional regulation as opposed to issue solving. The journey design will start to be designed with the question, what does the customer fear in this moment? Those institutions that manage to deal with these anxieties will become more than financial service companies, they will become behavioral organizations, businesses that are highly sensitive to the way human beings think, feel, make decisions and even regret their decisions.  

After all, it is hard to keep customers away due to one bad experience; they walk away due to the way systems treat them during hard times. Banks which will manage to redesign those moments not only will maintain their clients but will also achieve their loyalty, their forgiveness, and their business in the long run.