Developing Digital Literacy: A Roadmap for the Future of Banking

EDITOR’S NOTE: Because enterprise learning involves multiple disciplines and perspectives, we often invite experts from other organizations to share their insights. Today, Hawley Kane, Director of Marketing at LemonadeLXP, explains why commercial banks are investing in digital literacy for both employees and customers.

Digital Literacy: The Language of Modern Financial Services

A new wave of tech innovation is transforming commercial banking, with mobile apps, embedded finance, AI chatbots, open banking APIs, and other advances raising expectations. But complexity and uncertainty are also on the rise. And the deepest concerns involve human factors.

Too often, financial services companies focus on delivering digital capabilities while overlooking how customers and employees actually apply them. This kind of digital literacy blind spot can have dire consequences. After all, any company can roll out an arsenal of leading-edge tools. But unless people put them to use, they won’t create business value.

Inside Banking’s Digital Literacy Gap

For most banks, the battle for loyalty is no longer just about fee structure or branch open hours. It’s about a customer’s confidence in digital services and their experience when using those services.

Simply offering digital tools is not enough. Customers also need support and guidance to move through change and reinforce new behaviors. That’s why this kind of transition doesn’t happen in isolation. Success also depends on bank employees who are digitally competent and can comfortably guide customers who need a helping hand.

So, there are two sides to this digital literacy challenge:

• Customers need enough trust and knowledge to use digital banking services in meaningful ways.
• Employees need sufficient skills to support customers who are hesitant or confused.

Let’s explore these interrelated needs in more detail and look at how well-designed learning programs serve both audiences.

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Why Financial Digital Literacy Matters Now

As commercial banks face tougher competition from emerging neobanks, fintechs, and embedded finance platforms, a digitally fluent workforce and customer base is becoming a powerful differentiator.

Although many banks have invested heavily in digital platforms and tools, adoption and effective use remain uneven. But digital transformation only continues to accelerate. That means the need for financial digital literacy is increasing, as well. This is where strategic learning initiatives can help.

Research reveals that customers who feel competent and supported are more likely to engage, less likely to churn, and their financial services relationships grow deeper. Specifically:

• As digital literacy increases, reliance on tools follows.
• Digital know-how leads to broader use of mobile payments and online borrowing in underserved communities.
• Most people become more loyal to service providers that help improve their financial health.

When a bank supports digital literacy, it sends customers a powerful signal that says, “We care about you, not just your transaction.” That message builds trust. And trust is a durable foundation for business success.

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The Upside of Digital Literacy

Banks that encourage customer digital literacy see business impact across multiple metrics:

• Lower service costs: Educated customers are more likely to choose lower-cost transaction channels (mobile, online) over more costly branch interactions.
• Decreased support costs: Customers who understand how to use digital tools initiate fewer help calls. They make fewer errors, resolve questions more quickly, and are less likely to escalate basic “why-is-my-app-frozen?” concerns.
• Reduced risk: Digitally literate customers are less likely to fall prey to costly data breaches, fraud, or other security issues.
• Stronger retention and loyalty: As noted previously, when customers feel empowered by a bank’s educational efforts, they’re more likely to stay. Over time, this can drive deeper share of wallet and higher lifetime value.
• Expanded product usage: When customers feel comfortable, they’re more open to new digital offerings — embedded finance tools, instant lending, robo-advisors. This responsiveness drives additional revenue streams.
• Broader reach: Because digital literacy promotes inclusion, it opens the door to new markets.

Customer Success Starts With Employee Digital Literacy

In banking, the “customer interface” has rapidly shifted from in-person or phone interactions to digital and hybrid alternatives. For instance, branch representatives often help set-up mobile accounts, guide customers through an online form, answer questions via online chat, or explain how to use automated tools.

When these employees are competent and prepared to help others learn, they elevate the customer experience in several ways:

• Faster onboarding: Digitally proficient staff can expedite customer onboarding, while minimizing errors and reducing drop-off.
• Deeper trust: Employees who demonstrate mastery and explain things clearly are credible brand ambassadors. Customers perceive the bank as capable and supportive.
• Better coaching: When customers ask questions about an app or online service, employees can respond by walking them through the process, rather than hoping they’ll figure it out.
• Internal innovation: Employees who are comfortable with digital tools are more likely to spot inefficiencies, suggest new features, and improve processes. This helps the organization remain agile.
• Change readiness: As technology continues to evolve, digitally fluent employees will adapt faster, enabling their bank to stay ahead.

The key is to ensure that frontline representatives are comfortable educating and supporting customers in digital contexts. Why? Because digital literacy is directly tied to workforce performance and wellbeing. In other words, competent employees are less stressed, more engaged, and more effective at serving customers.

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Putting It Together: Building a Holistic Learning Strategy

Learning teams play a pivotal role in empowering both customers and employees to succeed in the future of banking. Why?

No bank can meet customers where they are and take them on a satisfying digital journey without first enabling staff. This kind of training goes far beyond “how to use the new app” tutorials. It’s about developing digital literacy that actively engages frontline employees in modern financial applications and equips them to coach others.

For a strong game plan, work collaboratively with product, support, and customer experience teams, focusing on these 10 steps:

1. Conduct a digital literacy audit

• Survey key customer segments:
  What tools digital banking tools do customers currently use? How comfortable are they with available options? What tasks frustrate them? What would they like to accomplish through digital applications?
• Survey employees:
  What digital tools do they use regularly? How satisfied are they with available tools? Where do they feel least confident? How often do they interact with customers through digital channels? What kind of coaching do they provide? How effectively do they feel they assist customers?
• Profile learning audiences:
  Analyze customer and employee sentiment and behaviors. Then define segments by criteria such as digital literacy level or confidence (low, medium, high).

2. Map the customer journey and identify digital literacy obstacles

• Analyze existing digital pathways:
  Find points where friction and attrition occur. For instance, look for patterns like these:
  • After downloading a mobile app, people tend to abandon registration.
  • Customers often log into digital banking but never use the app to deposit checks.
  • Some people with mobile accounts continue to visit the branch because they don’t trust the digital channel.
• Assess each speedbump:
  What causes friction? Technology design, lack of trust or comfort, a gap in digital literacy?
• Outline educational interventions to address key issues:
  Tailor to the context and level of digital involvement. Possible options: embedded videos, brief interactive tutorials, branch-based “digital bar” coaches, peer help channels.

3. Establish relevant metrics and incentives

Set specific goals based on reasonable benchmarks and desired outcomes:

• For customers:
  Consider metrics such as digital adoption rate, self-service vs. branch visit rates, digital channel cross-sell volume, and customer satisfaction scores among “digitally coached” segments. Examples:
  • Increase mobile app onboarding completion rate from x% to y%.
  • Reduce branch visits for simple transactions by x%.
  • Increase digital customer satisfaction scores by x%.
• For employees:
  Consider participation in digital literacy modules, digital onboarding completion rates, volume of customers coached, frequency of innovation suggestions submitted. Specific examples:
  • Increase volume of “digital literacy” certifications by x%.
  • Reduce customer coaching time by x%.
  • Increase “help from employee” satisfaction scores by x%.
• For all programs:
  Align education with business KPIs to illustrate how learning contributes value. Tie to measures such as cost savings, revenue growth, customer retention, NPS.

4. Design dual-track digital literacy learning experiences

• For customers:
  Address basic digital skills and data security awareness, along with support for core banking services tasks (mobile check deposit, P2P payments, online loan applications, and so forth). Provide a variety of formats, such as on-demand video, in-branch workshops, live online coaches, and embedded pop-up help tools that appear when customers start an online transaction.
• For employees:
  Build modules around mastery of digital tools, coaching skills, and hybrid service models (digital/in-person).
  • Include role-play. For example, “Help a customer open the mobile app for the first time” or “Guide an in-branch customer through a chatbot session.”
  • Include support elements such as: FAQ toolkits, internal peer-learning groups, in-branch “digital bar” help desks, and gamified modules to encourage engagement and exploration.

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5. Prepare employees to serve as “digital guides”

Design internal learning modules to progressively develop coaching proficiency:

• Familiarize employees with customer digital journeys and common obstacles.
• Position digital literacy as a mindset. Encourage people to explore new features, test new channels, and suggest improvements.
• Build tip kits and methods explaining how to guide confused customers through digital transactions.
• Circumvent tech-induced stress while driving digital adoption. Provide sufficient time, tools, reinforcement, and mentorship for people to safely practice skills and gain mastery.

6. Embed learning into workflows

• Microlearning: Publish brief modules (5-10 minutes) that can be embedded and shared in digital environments, so frontline staff can learn in short bursts at their convenience.
• Coaching culture: Encourage employees to spend time with less digitally-savvy customers, record their success stories, and share best practices in online peer groups.
• Branch integration: Establish in-branch customer literacy sessions with designated “digital champions.”

7. Roll-out digital literacy training in phases

• Phase 1:
  Begin with a limited pilot program.
  • Select a small employee cohort focused on a specific customer segment, such as older customers or a geographic region.
  • Educate customers in segments based on digital comfort level. Digital natives are likely to need less support, while others may need intensive, individual coaching.
• Phase 2:
  Measure outcomes (digital adoption, reduced support calls, improved satisfaction, and so forth).
• Phase 3:
  Refine program elements based on trial results. Then adjust parameters for a more diverse audience mix and scale the program broadly.

8. Promote adoption and reinforce success

• Customer marketing:
  Emphasize the bank’s desire to help people gain confidence in digital tools. To motivate customers, offer incentives such as fee waivers on their first mobile transaction after they complete literacy tutorials.
• Employee communications:
  Internally celebrate digital literacy certification. Share success stories when staff members achieve stellar coaching results or help customers switch to digital banking. To boost participation, offer small rewards when employees complete learning modules or deliver digital service “above and beyond.”

9. Continuously measure, update, and iterate

Digital banking tools and services are always evolving. So are customer expectations and the broader technology environment. It’s important to regularly review, revisit, and revise learning programs, to ensure that modules and resources remain current for employees and customers alike:

• Track quantitative data continuously, analyze metrics quarterly, and adjust accordingly.
• Perform qualitative analysis by embedding surveys into the process:
  • Collect and analyze post-training feedback (“How helpful was the tutorial?”)
  • Collect and analyze coaching feedback (“How much more confident do you feel?”)
• Monitor usage analytics, especially drop-off data.
• Use this intelligence to periodically refine programs and improve results.

10. Sustain the capability

Digital literacy is not a one-time effort. Tools evolve, customers evolve, and employee roles evolve.

• Make learning a continuous process:
  • Reinforce new behaviors with periodic digital check-ins.
  • Adjust programs whenever the mobile app changes, new features launch, or regulatory shifts occur.
  • Add update/reminder notifications into ongoing customer and employee communications.

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A Final Word on Digital Literacy: Why Educate Dual Audiences?

To leverage digital innovation, banks are reinventing their services at breakneck speed. But new technology, alone, doesn’t guarantee customer adoption, satisfaction or success. That’s why future-minded banks can’t afford not to invest in digital education for both customers and employees.

Research shows that financial digital literacy drives stronger, more profitable customer relationships. Frontline employees play a critical role in this process. So, by helping staff members develop technical and coaching skills, banks can also boost workforce engagement and retention.

Another important note: Across the financial services industry, “product-push” strategies are giving way to “experience-enablement.” This means banks that leave customers and employees behind will be outpaced by more agile competitors who put digital literacy ahead of tools.

Bottom line: It’s time for learning teams to step into a more strategic role — designing comprehensive digital literacy programs tied to relevant business metrics. The payoff? Employees and customers will benefit more fully from innovative banking services now, as well as in the future. And in an increasingly crowded financial landscape, this makes all the difference.

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