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Banks around the world received poor customer service marks for the second straight year, but it’s not for lack of trying. Competition is on the rise, and banks are devoting resources to reach new revenue streams, yet financial institutions have been unable to improve their Customer Experience Index (CEI), according to the World Retail Banking Report 2015.

“Plagued by under-investment, the middle- and back-offices are falling short of the high level of support found in the more advanced front-offices,” the report stated. This is “creating a disjointed customer experience and impeding the industry’s ability to attract, retain and delight customers.”

The same theme was echoed during a panel discussion at the SAP SAPPHIRE NOW conference in Orlando.

“If you started with a blank slate, most banks would know where they want to get to,” said SAP’s David O`Malley, head of Financial Services Industries for North America. “The challenge is getting there from ‘here,’ and every bank starts with a different ‘here.’”

On top of that, customer expectations of service providers have changed. They’re looking for banks, grocery stores, hair salons and other companies to go out of their way to make customers’ lives easier.

But many banks are struggling to keep up with this consumer evolution because they’re tied down by regulations — and in many cases archaic technology. Ultimately, they are not providing the kind of service consumers seek.

So banks have to go beyond creating a mobile app or updating their Web sites. They must more proactively offer educational services; ping us with retail promotions based on our geographical location; and be clearly transparent when it comes to the security of our money.

Banks need to take a different approach to managing the customer decision journey that “embraces the speed that digitization brings,” according to a recent study from  McKinsey & Company. And they must help us to do more with our money.

The Race to Win Millennials

Gen Y banking customers have the highest expectations for digital banking and are most willing to make the transition to mobile and online services. They are also the most likely group to leave their primary bank.

One third (33 percent) of Millennials don’t think they will need a bank in the next five years, according to a recent Goldman Sachs report. With about 75 million Millennials in the U.S. alone, this would leave 25 million Gen Y-ers unbanked through 2020.

To reach this audience, banks must offer many different options and make it easier for this generation to bank — something they can learn from non-bank retailers. Transparency is also important to Millennials, who are largely untrusting of old institutions.

Alternative Players Are Doing It Better

More than one third (35 percent) of customers in Western Europe and 27 percent of customers in the U.S. say they are not interested in purchasing another product from their bank, according to the World Retail Banking Report. Instead, they are turning to brand-name retailers, crowd-funding Web sites, peer-to-peer lenders and Internet service providers to fulfill their financial needs.

That’s because technology companies such as Google and Apple, as well as retailers such as Amazon are upselling customers in a way that banks are not.

For example, Walmart teamed up with  GoBank late last year to offer online banking services. The service costs only $2.95 to open and has no fees if at least $500 is deposited each month. Customers already felt like they could count on Walmart’s advertised everyday low prices, and they were more willing to explore banking services from the company as a result.

Non-bank competitors are bringing a capacity that many banks lack: expertise in connecting with customers and offering them greater flexibility. It’s increasingly becoming about the track record and trust bank companies have with the public. After all, customers are looking for familiar experiences and instant gratification.

So What’s a Bank to Do?

There is a lot of information for banks to digest, and it’s no surprise that businesses in all industries are having a difficult time securing Millennial loyalty, in large part due to the fact that technology is evolving at lightning speed.

Moving forward, banks must place a greater importance on transforming their middle- and back-offices, in addition to front-end interfaces, in order to enhance customer experiences.

The future of banking is still uncertain, but emerging technologies such as wearables and IoT make it likely that we will all be banking from our cars and watches in the very near future.

Banks must stay ahead of this inevitable disruption by making it a top priority to re-secure customer loyalty. Only then can they compete with the retailers and Internet service providers who are all vying for their slice of the customer pie.

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