Summary of this article
EY India’s 2026 Banking Customer Experience Study shows Indian banks risk losing relevance as customer experience overtakes pricing.
Only one in four customers rate their overall experience as excellent.
EY urges banks to adopt its EXCEL framework and treat CX as a core product, not an add-on.
The Indian financial landscape is witnessing a fundamental shift, with customer experience replacing pricing in the context of a bank’s relevance. According to a report titled Customer experience reimagined: Insights for the Indian banking sector, India banking customer experience (CX) study 2026, by EY India, with more digital players and FinTechs entering the market offering banking-related services, traditional banks need to re-imagine banking not as a mere service, but as an evolving journey.
The report, which surveyed 2,030 customers, reveals a significant excellence gap in the CX parameter. It found that on average, one in four customers (25 per cent) rate their overall experience as excellent across banking channels. Elsewhere, 88 per cent of respondents said that while they find the initial account opening process convenient, this goodwill often fades away gradually.
Banks fail the real test of execution when customers are forced to visit branches, face procedural delays, and lack proper communication from the bank, the report said.
Around 55 per cent of the respondents said they want stronger digital support, highlighting that app, Web portals, and chatbots need to improve, while 47 per cent said they expect better courtesy and professionalism, especially from the frontline staff. Only 39 per cent rated their overall customer service experience as excellent.
The study findings suggest that Indian banks can no longer treat their vast customer base as a single set. The report identifies seven distinct customer personas, including aspiring strivers (students), rising professionals, middle-age entrepreneurial, mass-affluent urbanites, rural core, golden transitioners (pre-retirement), and empowered urban women. Each of these customer segments has their unique expectations from banks. For instance, students are more digitally savvy, and they switch banks quickly if not satisfied.
The report said that aspiring strivers don’t want to visit branches often, whereas semi-urban and rural peers prefer visiting the branches for the trust factor.
The report reveals that artificial intelligence (AI) is preferred when it is used for guiding budgeting and planning. Also, the sale pushes and emotionless chatbot responses drop trust among customers. Further, it highlights that what the banks claim as personalised offers need to feel authentic. For this, they need to be life-stage driven, transparent, and not generic.
To navigate the complexity, the report introduces the EXCEL framework, which stands for Empathy, eXecution, Convenience, Empowerment, and Listening. The goal is to move beyond transactional interactions to a customer-centric culture, which competitors find difficult to replicate. Trust remains the ultimate differentiator, while 82 per cent of customers trust banks with their data, only 73 per cent believe fraud issues are resolved effectively.
The report said that customers view the technology, particularly AI, as their financial guide rather than a salesperson. It said that 59 per cent of customer expect AI-powered, personalised guidance for their financial decisions.
The utility of physical branches is primarily for updating personal details, depositing or withdrawing cash, updating banking documents, getting a demand draft or cheque, and collecting or replacing a card or cheque book. So, the physical branches are not dead, but their role is redefined.
According to the report, in this phygital (physical + digital) era, branches act as consultative hubs, like wealth advisory or compliance, whereas digital channels are used for daily transactions.
The report says that the message for Indian banking leaders is that customer service is no longer an add-on, but a product in itself. In an environment where customers can switch institutions with just a few clicks, banks need to prioritise CX to stay relevant and competitive.
