Your app isn’t broken—but your customer relationships might be

As someone who works closely with banks across these mature markets for over 6 years, I’ve seen a clear pattern emerge. Customers might be transacting more, but they’re feeling less connected. Loyalty is slipping. And in a crowded marketplace, that’s a dangerous trend.

Let’s look at the numbers. In Europe, 54% of consumers say their bank’s app feels indistinguishable from others (Forrester, 2024). BCG reports that only 30–40% of digitally acquired customers actually go through with  activating their accounts–defined as reaching an average of 3-4 transactions per month as measured at 90 and 180 days. And our own State of European Banking Report, based on insights from 6,303 banking customers across 13 countries, reveals a clear ambition from banks to deepen share of wallet and boost fee-based revenues. 

But if digital experiences remain purely transactional, those goals stay out of reach.

Speed, access, and mobile-first functionality are table stakes. The real challenge is differentiation. And not just at the brand level—but at every customer touchpoint. Accenture summed it up best: “Digital channels may be functionally correct—but emotionally devoid.” That’s the gap banks need to close.

Customers in Europe and the Middle East expect more than functional apps. They want banking experiences that reflect who they are—experiences that help them navigate life’s financial moments, whether they’re planning a holiday, saving for a home, putting aside money for their child, or exploring investment options.

But here’s the thing: the solution isn’t going back to the branch. It’s bringing the branch-level personalization into digital. 

Relevance means personalization at scale—and not the one-size-fits-all kind. It’s about segment-based experiences that adapt in real time to individual needs. Take Vanquis Bank, for example. By focusing on financially vulnerable segments, they built tailored experiences that prioritize financial literacy, healthy borrowing habits, and long-term support, meeting customers where they are, instead of where we wish they were.

Another example: National Bank of Bahrain. Using Backbase’s composable platform, they slashed onboarding from 180 minutes to just five. The result? A 65% increase in account activations. That kind of transformation doesn’t just reduce friction, it builds momentum.

And relevance isn’t just digital. It’s knowing when to hand off to a human, whether via live chat, video, or in-app calls—ensuring customers feel understood, not just served. This goes to show that when banks reimagine digital channels as relationship-building growth engines, instead of mere transaction tools, they don’t just improve engagement. They stand to win big.

At Backbase, we work with banks across EMEA to shift from product-centric to customer-centric strategies. The key? A four-stage growth model:

• Acquire: personalized onboarding flows, eKYC, and real-time product matching.

• Activate: habit-building nudges—like using QR payments or switching salary deposits.

• Expand: cross-sell based on behavioral triggers, with AI recommending next-best actions.

• Retain: ongoing value through smart insights, peer benchmarks, and financial coaching.

Revolut is often viewed as a digital-first disruptor, but their success goes far beyond clever UX. What sets them apart is their ability to translate customer data into hyper-relevant, real-time experiences—turning simple transactions into opportunities for deeper engagement. Whether it's personalized savings nudges, dynamic spending insights, or effortless investment prompts, Revolut has built a blueprint for banking that feels intuitive and immediate. 

The result? A 68% increase in customers using Revolut as their primary account—a signal that meaningful, data-driven engagement pays off. Now, across the industry, banks are exploring how to use AI to scale this kind of personalized engagement, making every digital touchpoint smarter, more human, and most importantly, more relevant.

Traditional banking architecture wasn’t built for personalization. It’s slow, costly, and rigid–making meaningful engagement nearly impossible. Banks need agility, and that’s where composable banking comes in. 

With a platform like Backbase, banks can deploy pre-built, configurable modules—across onboarding, lending, PFM, investing, and beyond—without reinventing the wheel.

This Buy + Build model combines the speed of ready-made journeys with the flexibility to tailor them as needed.

The results speak for themselves. Banks working with Backbase have achieved:

• 70% faster time to market, using pre-built accelerators and reusable components

• 63% savings on IT maintenance, by avoiding the burden of monolithic systems

• 38% reduction in innovation costs, thanks to configurable journeys and flexible integration

• Over 50% higher ROI, with fewer updates, less vendor lock-in, and faster delivery

Unlike rigid core vendor solutions or brittle low-code builds, composable banking enables banks to deliver personalized, adaptive journeys within a single platform—at speed and scale.

This approach resonates across regions: in Europe, where banks must align rapid wins with long-term transformation; and in the Middle East, where the appetite for innovation is high, but so is the expectation for high-touch, relationship-led service. With Backbase, banks don’t have to choose between speed and depth. They can have both.

Our State of European Banking Report made the gaps clear:

• Banks want to deepen share of wallet, but lack effective digital engagement

• Customers want investment opportunities—but still expect a human touch

• Margin pressures make upsell and cross-sell more critical than ever

Meanwhile, Middle Eastern banks are doubling down on digital for a growing, tech-savvy youth population. But even digital natives want to feel known, without feeling like just another transaction. 

This is where AI becomes more than a buzzword. With agentic AI and GenAI, banks can now deliver proactive, emotionally intelligent experiences—scaling human-like advice, nudges, and recommendations across all digital touchpoints. But AI alone isn’t enough.

To move the needle, banks need an underlying platform that can orchestrate these interactions, where data, decisions, and design come together to power seamless, personalized journeys across onboarding, servicing, lending, and beyond.

That means no more silos. No more disconnected apps. Just a unified Engagement Banking platform, designed for relevance at every touchpoint.

Banks in Europe and the Middle East don’t have a technology gap. They have a connection gap. They hold vast reserves of customer data, operate in highly regulated (and trust-rich) environments, and many are investing heavily in innovation. But building yet another feature won’t close the loyalty loop or  increase customer value.

The opportunity now is to be bold: to break from patchwork fixes and siloed systems, and embrace a unified platform that brings together everything from onboarding and loan origination, to daily banking, personal finance, mobile & online banking, and customer service. A platform designed not just to transact, but to connect.

It’s time to stop building apps that customers merely use and start creating experiences they value. The future of retail banking isn’t just about scale. It’s about relevance. And that’s how you build a bank people want to come back to, trust more, and invest more of their financial lives with.