anks spent the last decade winning the digitization race. BRAC Bank now opens 77% of new accounts via eKYC. Vietnam’s banking sector processes over 90% of transactions through digital channels. Apps work. Chatbots respond. Onboarding takes minutes instead of days.
Yet when you ask banking executives what keeps them up at night, you hear a different story. “Customers are giving us information daily: who they are, what they’re about, where they are in their life cycle, and what their needs are,” says Meheriar Hasan, Chairman of BRAC Bank. “What do we do with this data? How do we use it to personalize bank interactions?”
The uncomfortable truth: banks achieved digital convenience but plateaued on digital relationships.
What the Plateau Looks Like
The symptoms are consistent across markets. Customers open accounts digitally, complete a few transactions, then go dormant. Channel usage climbs while wallet share stagnates. Data lakes grow deeper while insight generation stays shallow.
Kotak Mahindra Bank’s CTO identified the core problem: “A big part of the challenge for us has been, how do we reimagine these processes to be digitally native. Digitizing an inefficient process just makes the inefficient process run faster.”
Three patterns emerge when banks examine their digital performance honestly:
High acquisition, low activation. The friction left onboarding, but so did the relationship formation that used to happen in branches. Digital customers arrive fast and leave faster.
Channel usage without relationship depth. Transactions happen, but cross-sell ratios don’t improve. Customers use the app for convenience, not because they trust the bank with more of their financial life.
Data richness, insight poverty. Every login, every click, every transaction generates behavioral signals. Most banks can describe what happened but struggle to understand why it matters.
Joseph Abraham, Group CEO of Commercial Bank of Qatar, frames the gap clearly: “Today’s customers demand convenience, speed, personalisation and seamless service across all channels.” Banks delivered convenience and speed. Personalization and seamless experience (the harder half) remain elusive.
Why Digital Convenience Doesn’t Equal Engagement
Banks made a false equivalence: better UI equals better engagement. The assumption was that if you removed friction from transactions, relationships would deepen naturally.
They don’t.
Relationship depth requires three capabilities that transactional banking can’t deliver à recognition across time, contextual intelligence, and proactive value creation. A fast loan approval impresses once. Understanding when a customer’s financial trajectory is shifting (and surfacing the right guidance before they ask) builds lasting trust.
Parag Rao, Country Head of Card Payment Products at HDFC Bank, describes the evolution his bank needs: moving “from convenience to a frictionless customer experience.” The distinction matters. Convenience is access. Frictionless is understanding.
The strategic cost of staying on the plateau compounds silently. While banks optimize transaction costs, fintech platforms build engagement-first experiences without legacy constraints. Hasan puts it bluntly: the banking industry “remains too product-oriented” when customers increasingly expect outcome-orientation.
Breaking Through Requires Different Intelligence
Incremental improvements to digital channels won’t solve this. More app features create bloat, not clarity. Faster chatbot response times deliver reactive service, not proactive guidance. Unified data platforms provide availability, not intelligence.
What separates banks breaking through from those stuck on the plateau isn’t better technology. It’s better application of the technology they already have.
Engagement intelligence means understanding financial wellness trajectories, not just account balances. It means recognizing opportunity signals buried in behavioral patterns. It means delivering the right nudge at the right moment through the right channel. Abraham calls this “good customer communication to provide the full information clients need ahead of time, which is clearly understood and highly personalised.”
The banks demonstrating this shift are seeing measurable outcomes. HDFC Bank reports a 28% cross-selling increase from AI-powered personalization. Canara Bank cites 8-12% incremental growth from applying intelligence to existing data. Arab National Bank achieved 60% processing time reduction by reimagining journeys instead of just digitizing steps.
The Post-Digital Frontier
Your competitors aren’t winning because they have better apps. They’re winning because they understand what to do with the data those apps generate.
Banks that invested in digital infrastructure built the foundation. The question now is what intelligence sits on top. The next evolution isn’t about digitizing more. It’s about making digital intelligent enough to move from serving transactions to building relationships.
The plateau isn’t permanent. But breaking through requires acknowledging that digital convenience was the opening move, not the endgame.
