Digital banking and fintech have ruined the customer experience

We’ve moved from simplicity to fragmentation and now we’re struggling with the consequences. In short, we’ve built a highly fragmented financial world in the name of innovation and now the next phase is about reconnecting it, simplifying it, and making it usable again.

By way of example, you have to launch several different apps to authorise a simple transaction and no bank’s systems trust that you are you because they have no reliable identity systems. Equally, AML and KYC regulations are killing customer relationships.

We had a clean sheet of paper to create the new digital world and screwed it up. Instead of simple banking, we have a mess of finance that involve multiple apps and players to process one simple transaction. We have made it complex rather than simple and, at its heart, finance has evolved from simplicity to fragmentation, and now to a growing need for re-integration.

In the past, most people had a single bank account tied to a physical branch. That created a straightforward, manageable relationship. Then came the internet era in the 1990s and 2000s, which introduced online banking and, with it, the idea of having a backup. People didn’t fully “multi-bank”. They simply had two accounts. It was more about resilience than complexity.

But the digital revolution changed that entirely.

Today, many people operate across numerous banks, fintech apps, and payment platforms – sometimes ten or more – alongside crypto wallets. Each of these comes with its own interface, rules, and security mechanisms. What began as innovation has led to fragmentation. Instead of one coherent financial view, individuals now manage a scattered ecosystem of services.

This fragmentation creates three major issues.

First, and perhaps most visible, is user experience complexity. To complete a simple transaction today might require navigating multiple systems – banks, apps, open banking connections, authentication layers – each with different security requirements.

Second, loss and irreversibility, particularly with crypto. One example is losing private keys to bitcoins worth hundreds of thousands. This highlights a fundamental difference from traditional banking. There is no recovery mechanism. If the keys are gone, the money is gone. That’s a new kind of financial risk that didn’t exist before.

Third, inheritance and continuity. In a fragmented world of accounts and wallets, what happens when someone dies? How does a family even discover, let alone access, all those assets? Traditional banking has processes for this, but crypto and multi-platform finance do not. It raises serious questions about digital estate planning.

The result is a “spaghetti mess” of front-end experience. Interestingly, this mirrors the long-standing issue inside banks themselves, where legacy systems are tangled and fragile in the back office. The irony is that we’ve now recreated that same complexity in the customer experience which means we now have a spaghetti of front and back office.

IT’S A MESS!

In response to this, a solution is proposed: a unified financial identity or “handle.” This would be a digital identity that you manage and you control. It would act like a domain name for your financial life. Instead of managing dozens of endpoints separately, you would have a single identifier – perhaps a phone number or chosen handle – that maps to different accounts, currencies, and wallets.

Behind the scenes, you could route GBP to one account, USD to another, bitcoin to a wallet, and so on. The complexity remains, but it’s abstracted away from the user. In essence, it’s an attempt to bring coherence back to a fragmented system.

The question is that if we had that – a self-sovereign identity – what would happen if it was hacked? That’s something for another day.

The issue right now is that we are living in systems – financial, technological, and social – that have become increasingly complex and fragmented. Whether it’s managing money, securing digital assets, or just making a payment, the challenge is the same. How do we build from fragmentation towards intelligent and integrated experiences that are easy to use? How do we simplify, reconnect, and build systems that people can actually navigate and trust?