Indian Banking Sector Sees Modest Growth in Total Experience as Human Capital Gaps Persist
The Indian banking landscape is witnessing a period of stagnation in overall service quality, according to Forrester’s 2026 Total Experience Index. While the industry has made significant strides in digital transformation over the past decade, recent data suggests that these advancements are no longer sufficient to secure a competitive edge. The average Total Experience Score across nine major domestic banks rose only marginally to 64.0, up from 62.8 in 2025, signaling that most institutions are simply maintaining the status quo rather than innovating to drive future growth.
Forrester’s framework, which evaluates institutions based on brand strength, customer service quality, and employee engagement, highlights an urgent need for banks to better align these three pillars. As digital interfaces become increasingly standardized across the sector, banks are finding it harder to distinguish themselves in a crowded marketplace.
SBI Leads the Charge in Growth Rankings
Among the nine institutions evaluated—Axis Bank, HDFC Bank, Federal Bank, ICICI Bank, IDBI Bank, IDFC FIRST Bank, IndusInd Bank, Kotak Mahindra Bank, and the State Bank of India (SBI)—it was the public sector giant SBI that showcased the most significant improvement. Driven by a marked rise in its customer experience score, SBI has successfully entered the index’s “leading growth” category. It now shares this elite status with private sector stalwarts HDFC Bank, ICICI Bank, and IDFC FIRST Bank.
Despite this success, the broader data suggests a concerning plateau. Experts point out that because digital capabilities are now a commodity, banks must look beyond their mobile applications and websites to capture customer loyalty.
The Critical Role of Communication and Transparency
The research underscores that today’s banking customers are placing a premium on simplicity and fairness. Beyond digital efficiency, brand perception is heavily influenced by transparent pricing models and clear communication. Customers are gravitating toward institutions that avoid opaque fee structures and explain financial products in plain, accessible language. As competition intensifies, banks that fail to communicate their value proposition clearly risk losing prospective customers to rivals who prioritize customer-centric transparency.
Bridging the Employee Engagement Deficit
A significant addition to the 2026 report is the inclusion of the Employee Experience Index, which was analyzed for six of the nine banks. The findings reveal a potentially disruptive vulnerability: half of the banks assessed showed clear gaps in employee engagement. Issues ranging from limited career development and inadequate access to technology to a lack of confidence in leadership are hampering internal morale.
Forrester warns that this “employee experience gap” is not merely an internal HR issue but a direct threat to the bottom line. Employees who are disengaged or unsupported cannot consistently deliver the high-quality service required to uphold a bank’s brand promise.
Pushpa Marwal, an analyst at Forrester, noted that while the industry has invested heavily in technology, the next phase of growth requires a more holistic strategy. “As customer expectations have risen and digital capabilities have become increasingly standard, banks will need to connect their brand promise with customer experience and rely on their employees to deliver on that promise,” Marwal stated.
Moving forward, the ability of Indian banks to thrive will depend on their capacity to pivot from pure technology spending toward fostering an integrated culture where motivated employees are empowered to act as the true drivers of brand differentiation.
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