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Rob Rubin (00:00):

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(00:30):

Hello everyone and welcome to The Banking and Payment Show, a Behind-the-Numbers podcast from eMarketer made Possible by Cint. Today is June 10th, 2025. I'm Rob Rubin, Head of Business Development at eMarketer, and your host today. Today we're going to talk about why banks fail customers and what they can do about it. I'm really excited to have Principal Analyst Tiffani Montez and Banking Analyst Lauren Ashcraft join me for this discussion. Hi guys. I love the title, Why Do You Fail? So exciting. Let me sign on to that.

Lauren Ashcraft (01:04):

Great to be here.

Rob Rubin (01:05):

We should thought of that. Who thought of the title? Not me.

Tiffani Montez (01:11):

Come on. Take credit for that.

Rob Rubin (01:12):

How are you guys doing?

Tiffani Montez (01:14):

Good, how are you?

Lauren Ashcraft (01:14):

Doing very well.

Rob Rubin (01:15):

Good. I want to sort of set this up with a little lightning round to sort of get us all warm. Either of you can answer it any time and maybe not. What's the biggest CX myth in banking?

Tiffani Montez (01:28):

I think there used to be a myth that if you don't build it the right way the first time, that customers will never come back and use it.

Rob Rubin (01:36):

Ah.

Tiffani Montez (01:37):

And I think that that myth has been broken. I think consumers understand the technology moves quickly and they know that experiences will only get better, and so that should never be a reason to hold back on implementing something.

Rob Rubin (01:54):

All right.

Tiffani Montez (01:55):

First thing that I thought of is that it's not totally untrue, but people always think the bigger banks have the better digital experiences than smaller ones or credit unions. Some recent surveys just came out showing that credit unions are more satisfied with their overall experience. So definitely their digital is part of that so undoes some of that stereotype.

Rob Rubin (02:23):

So this is a good one. Fintechs that keep big banks up at night. Who are they scared of?

Tiffani Montez (02:30):

Scared of Chime's IPO.

Rob Rubin (02:32):

Yeah.

Lauren Ashcraft (02:33):

That's true. And it'll probably mean that there are more IPOs coming.

Rob Rubin (02:42):

All right.

Tiffani Montez (02:42):

I think it's also more big tech and payment players that they're probably the most fearful of.

Rob Rubin (02:47):

Right, because they can own cash management and take that away.

Tiffani Montez (02:50):

Yes, exactly. They can get closer to every single purchase that a consumer makes.

Rob Rubin (02:55):

Yeah. Well, this was, I think, fun and a fantastic way to start the show. So thank you for the quickfire. Let's get right to our first segment, the headlines. Is going to be a little different. In the headlines, I choose a story related to this topic and today the title which we laughed about, Why Banks Fail Customers, I asked eMarketers new AI chatbot, "Why do banks fail customers?" Our AI chatbot is only trained on our data. So it came up-

Tiffani Montez (03:33):

Which it's always the right answer.

Rob Rubin (03:34):

It is. It came up with a headline, US banks struggle to meet customer's needs, innovation and service gaps persist. And it went on to list five reasons. High fees, poor customer service, erosion of trust, limited access to banking services, and a lack of innovation. So how did it do, guys?

Lauren Ashcraft (04:01):

I think it's pretty spot on.

Tiffani Montez (04:02):

It did pretty well.

Rob Rubin (04:03):

But there's definitely nuance though, right? Lauren, what's missing or what is the list, like what does it beg for more an expansion of?

Lauren Ashcraft (04:12):

Well, I was looking at the first one, high fees. It is something that's really important. Speaking of credit unions, I was just writing an article today about how almost a third of them would leave their credit union for lower fees.

Rob Rubin (04:26):

Really? Because credit unions have no fees practically, they're nonprofits.

Lauren Ashcraft (04:32):

A lot of them do still have some pretty high fees and especially with this law, the overdraft fee ruling that we're one step away from undoing.

Rob Rubin (04:43):

Right.

Lauren Ashcraft (04:44):

That only ever pertained to the larger financial institutions anyway. So there was all sorts of inequity in the industry. But high fees are still a big, it's a big differentiator if you're able to offer lower fees or none at all.

Rob Rubin (05:02):

Right.

Lauren Ashcraft (05:03):

Definitely it's something that causes customer dissatisfaction, if they realize that if they could just bank elsewhere, they would be saving a lot of money. So I would say that is an important one to have.

Rob Rubin (05:16):

Right.

Lauren Ashcraft (05:17):

Probably in the top place.

Rob Rubin (05:18):

Tiffani, are you happy with the list and the order?

Tiffani Montez (05:23):

I am. I think, to your point, it's missing some nuance. When I think about lack of innovation, lack of innovating what? And we think about lack of innovation, what really comes to mind, if you're looking for the nuance, is that consumers are willing to switch for better mobile banking features.

Rob Rubin (05:41):

Right.

Tiffani Montez (05:41):

So perhaps that is what number five means. The one that I'm surprised is not on here is security and fraud.

Rob Rubin (05:51):

I wonder if that's encompassed in an erosion of trust.

Tiffani Montez (05:55):

That could be. Yeah.

Rob Rubin (05:56):

Right? When it says erosion of trust, it really means, "I don't think that it's safe here. I don't trust you anymore." Or it could be a bad customer service experience where you were assessed a fee that you didn't think that you earned or the bank earned, rather. See how I think punitively as a parent. It's like, "You earned that punishment, my friend."

Tiffani Montez (06:23):

Exactly.

Lauren Ashcraft (06:26):

And with that erosion of trust, I had a quick piece of data is trust is even harder to earn among Gen Zers.

Rob Rubin (06:33):

Oh.

Lauren Ashcraft (06:35):

And they're the least likely to trust banks as a whole or the banking industry. And what they're really looking for is a brand's values and commitment to those values.

Rob Rubin (06:48):

Huh.

Lauren Ashcraft (06:49):

Which includes DEI, which I know is sensitive.

Rob Rubin (06:56):

Why do you think that a younger person would be less trustful? Is there some sort of like older people were raised to be more trustful of institutions than younger people are today? There's more information about the flip side of institutions or the things that they do which aren't great? Like that's why they might support DEI? What do you think?

Lauren Ashcraft (07:21):

That's a great question. I think some of it definitely goes back to them watching their parents probably go through financial struggles. And they also interact with the world of marketing in a completely different way. So if they feel that there is an overt attempt to market something to them or to make a sale, they're very turned off by that as a whole. So whenever banks are marketing to them, the more authentic types of social media content seem to work better.

Rob Rubin (07:57):

I've raised Gen Zers and I raised them through the pandemic, and I wonder if part of it also is their sort of experience at that particular age in their life.

Tiffani Montez (08:09):

Could be.

Rob Rubin (08:09):

And therefore their trust of things, everything is a little different. Like how they spend and save money.

Tiffani Montez (08:19):

Where they research products.

Rob Rubin (08:20):

Where they research.

Tiffani Montez (08:21):

Their end-all, be-all is what you learn on TikTok.

Rob Rubin (08:25):

Right. Well, this has been fantastic discussion about why banks fail and what some of the reasons are and certainly it is as we point out, the list is good, but there's a lot of nuance to it. So I want to transition to our final segment, which we haven't done in a while, and I literally just told Tiffani about it before we started recording.

Tiffani Montez (08:48):

Feeling bamboozled.

Rob Rubin (08:51):

In our final segment, we're going to pretend that Tiffani is interviewing for a new role.

(09:00):

At a bank, the Chief Customer Experience Officer, the CXO. For this, Lauren, you're going to be the CEO and I'm going to be the CFO and we're going to interview Tiffani together. And what we really want to do is understand her vision of how banks can delight their customers. So Lauren, as CEO, I'm going to defer to you to ask the first question.

Lauren Ashcraft (09:26):

Great. Tiffani, it's great to have you here today.

Tiffani Montez (09:30):

Thank you, Lauren. I don't know how I ended up here, but here I am.

Lauren Ashcraft (09:35):

Well, your resume ended up at the top of my pile today. Well, my question is, we are a product-led organization. Can you be a product-led organization and be customer-centric and how?

Tiffani Montez (09:50):

Well, I think if you think about a product-led organization and a customer-led organization, I think they have two very different operating principles. Product-led organizations typically sell products by lines of business, and oftentimes those lines of business don't necessarily act always in the best interest of consumers. They're about meeting their goals. Where a customer-centric organization is one that really takes under consideration what a consumer's needs are, where they are in their life, and offers the right products, service, and experience that aligns with that. So I think it would be very difficult to be both. And I think if you do customer-centric right you're naturally going to sell the right products to someone.

Rob Rubin (10:44):

But how do you get, like we're a large siloed organization that is a product-led organization, which is why Lauren asked the question. So how do you get an organization like that, a large one, to move together towards customers?

Tiffani Montez (11:02):

I think you have to change the context in which they think about customers. So it goes away from selling one product and focuses on the actual long-term value that you can add to a consumer's life. And so if you start thinking about long-term value, it isn't about just getting someone in the door with a product that seems to be the right fit in that moment or the product that you want to push to them, it becomes more about how do you actually understand where someone is in their life based on their financial goals, their spending patterns, and even what you know about what might be going on in their life. And how do you build experiences around educating people, advising, guiding, and growing alongside them? So if you think about that under the context of, I'll use vehicle ownership as an example.

Rob Rubin (11:50):

Okay.

Tiffani Montez (11:51):

How do you help someone understand what they can afford based on their spending, what they expect to pay for insurance, what they expect to have to pay for maintaining that car? How do you help someone create a savings plan for unexpected emergencies and that aligns with the savings product? How do you help them over time understand should they be paying more or less for insurance so that you can increase their cash flow? How do you help them be able to understand when those maintenance activities are going to occur and when they can expect to pay for things? And most importantly, how do you help them understand when the cost of keeping the vehicle that they own outweighs them actually purchasing a new vehicle? And when you think about banking under that context, it's not about interacting with a product, it's about interacting with an experience that aligns that product with your life and your financial goals and helping advise guide and push someone through different life stages. And not just interacting with them, actually showing up as a true financial partner.

Rob Rubin (12:54):

Do customers want that?

Tiffani Montez (12:56):

Actually, they do want this. So we do a study every year where we go out and ask consumers about their mobile banking experience. And so for the last couple of years, I've asked a question around how valuable mobile banking users would find features that were available in an app to help manage them around life stage. And more than 60% of consumers indicate that they would find value in features like planning, preparing for, and saving and living in retirement, planning, preparing for, and filing their taxes, buying, protecting, and maintaining their vehicle, and even finding, buying, and maintaining their home. So being able to do it all across life stage.

Lauren Ashcraft (13:45):

So what are fintechs doing that keeps them closer to customers and why can't banks do the same thing?

Tiffani Montez (13:53):

Banks mainly can't do the same thing because they're stuck in their product-centric experiences and fintechs are really focused on serving an actual need for a consumer. So when I think about life stages and some players that have come in to, I wouldn't say support the whole life stage end to end, but do a good job at capturing at least some of the phases of a life stage. So there's a company or a fintech called My Home Pathway that improves mortgage readiness with personalized recommendation and data analysis. So really helping someone get ready for that home ownership experience. There is another company called Chimney that helps users track home values, gauges their borrowing power, and helps them assess their home's equity directly in banking applications. And when you start to think about college planning, Fizz supports students with credit monitoring, spending insights, and even swipeable financial lessons. So there are fintechs out there that are really stepping back from focusing on selling products, and building experiences around those products, which gets them much closer to everyday moments where consumers are making decisions that have financial impact.

Rob Rubin (15:09):

But they're passing, right? Like Fizz is focusing on a life stage, so you're going to be past that life stage. So they need to get another customer who's in that life stage to replace you. Whereas a bank, if your bank-

Tiffani Montez (15:23):

Yes, and graduate the other one.

Rob Rubin (15:24):

Right. If your Bank of America, you have all those customers across all their life stages, but you don't know how to sell them a product like Fizz or when to sell them a product like Fizz or when to show them how much being ready for when they want to buy a car. I mean, that's their challenge is that those fintechs are so focused on a specific thing.

Tiffani Montez (15:47):

Well, the challenge is, yeah.

Rob Rubin (15:47):

And I'll bring up Chime. Chime launched into the market and that was one that we mentioned already. They're going to have an IPO, but they had a perfect value prop to me, get paid two days early. It just met, it hit a market perfectly. There was a big audience of younger people in particular, people that were checked to check that two extra days was a big deal or is a big deal, and that was their value prop. So it met the need of a particular audience, very targeted. And I don't know how a big bank would be able to do that.

Tiffani Montez (16:23):

Well, you have all the data that's there and I think part of this becomes opting in.

Rob Rubin (16:29):

Right.

Tiffani Montez (16:29):

Well, think about home ownership as an example. There are very few, if any, financial institutions that show you the equity that you have in your home. They'll show you your mortgage balance and the payments that you've made, but they're not going to show you the equity in your home. And so when you think about the equity in your home, that's part of one phase of a broader life stage, tapping into the equity of your home. And tapping into the equity of your home could mean that you want to do debt consolidation. It could mean that you want to pay for another major purchase. It could mean that you want to remodel. There's lots of different things that it could mean, but getting yourself closer to signals that allow you to be able to anticipate where there might be a need is really where banks need to go versus passively sitting back and waiting for something to happen that encourages a customer to seek out products and services that align.

Rob Rubin (17:17):

One of the interesting challenges as acting CFO here, I would say that having product lines-

Tiffani Montez (17:25):

You want money?

Rob Rubin (17:25):

-have budgets that are organized by product line. And marketing budgets are also organized by product line. So the auto loan department is selling auto loans. They have a goal of selling a certain amount of auto loans and they have a marketing budget to do that. To be more customer-centric or to read signals and be at the right time, right place with all the different types of products, like the auto loan might have to take a backseat to the mortgage product at a certain life stage, for example. How does a bank readjust its marketing budgets and how it lines up or evaluates how to spend money on marketing when it's not the way they've been doing it for the last 100 years?

Tiffani Montez (18:20):

Yeah, it's a fundamental shift in the business model. It's rethinking your business model from the ground up. But under that context, if you start thinking about consumers' financial relationships, that they're spread across various providers, everyone's beginning to lose sight of who has accounts where and how to actually integrate and add value. That is manifesting now with consumers. I have a data point that I'm putting into a recent report that I'm writing that 46% of consumers feel pressured at least some of the time to accept products and services that serve banks more than they serve themselves. And so when you think about it under that context, that speaks perfectly to a product centric organization versus customer-centric. And so customers recognize that banks aren't always acting in their best interest.

Rob Rubin (19:11):

Right.

Tiffani Montez (19:12):

And when you think about trust, trust is acting in the best interest. And so how do you build experiences that support what consumers want at the life stage and the phase in that life stage that they're in and offer them the products that support that versus the products that you have an incentive plan to sell against?

Rob Rubin (19:34):

I don't know-

Tiffani Montez (19:34):

I was also-

Rob Rubin (19:35):

Go on.

Lauren Ashcraft (19:36):

Oh sorry. I was just thinking about the urgency of banks kind of having to understand this and make that shift. Because Chime, like we talked about, is really close to that IPO and they started out with a very targeted customer base and solving their targeted customer bases problems. And now they are, they're branching out and targeting, for example, higher-income customers, just expanding what that base looks like. But as they're expanding, they're still customer-centric and developing products for these different demographics as well and selling it directly to them to solve their problems. And meanwhile, banks have the opposite problem, like you were describing, Tiffani, of just kind of being product-led and unable to shift that mindset very quickly. So while the clock is ticking, these fintechs are expanding, so there really is some urgency there.

Rob Rubin (20:44):

Maybe a bank should reorganize itself as separate life stage banks and then the products sit on top of it, but they operate like the young professional bank, the close to retirement bank.

Lauren Ashcraft (21:03):

Could be.

Tiffani Montez (21:06):

I think the other option is also to integrate into other third party apps and place your products where they're relevant.

Rob Rubin (21:17):

All right. So not just be the super store, but be the product.

Tiffani Montez (21:22):

Exactly. Be the super power and go everywhere where your customers want your products and services.

Rob Rubin (21:29):

Ooh. I think that that, be a super power, go where all your customers want, is the perfect place for us to end this because that was a great way to finish it. I loved it.

Tiffani Montez (21:41):

Does this mean I got the job?

Lauren Ashcraft (21:42):

You're hired.

Rob Rubin (21:43):

Lauren and I are going to have to talk about it.

Lauren Ashcraft (21:46):

Oops.

Rob Rubin (21:46):

Lauren, I'm so sorry.

Lauren Ashcraft (21:47):

I already offered you the job.

Rob Rubin (21:50):

And I'm the CFO here. I guess you have the job, Tiffani, because-

Tiffani Montez (21:58):

Well, thank you for the offer, but my heart and soul belongs to eMarketer.

Rob Rubin (22:02):

Yeah, oh.

Tiffani Montez (22:03):

So I'm going to have to respectfully decline your offer. But I hope you will invite me back to your podcast.

Rob Rubin (22:09):

I will always invite you back, Tiffani. And Lauren too. Thank you so much for joining us today. It was fun.

Lauren Ashcraft (22:14):

So fun. Thank you for having me.

Tiffani Montez (22:15):

It was fun. Thank you.

Rob Rubin (22:16):

Yeah. I also want to thank everyone for listening to The Banking and Payment Show brought to you by Cint. Also, thank you to our studio team who puts these episodes together. Our next episode is on July 8th, so be sure to check it out. See you then. Thank you.

(22:35):

Bye everyone.

Tiffani Montez (22:36):

Thank you. Bye.