Financial institutions have been focusing time and capital across many new technologies, like unified commerce platforms, which provide centralized, real-time insight across all facets of the business, from ATMs to online banking transactions. Bank industry trends and the predominant technology mindset have pushed digital-only solutions — those that emphasize personal interaction and accelerate the shift toward technology solutions.

Yet, financial consumers continue to use multiple touch points by choice. According to research by Deloitte, the proximity of a physical branch to work or home is among the top three factors for choosing a bank, right behind account fees and mobile banking capabilities.

However, people feel there is a disconnect. Perhaps it’s not really about technology, but about the ongoing need to demonstrate trust and empathy across all channels of financial services. Historically, the need for assurance and customized advice across a variety of financial needs required some form of human intervention.

This will still be the case for the next several years, with Accenture finding that 87 percent of consumers will use a brick-and-mortar location in the future, and want human interaction when they visit. Additionally, these types of connections benefit banks as they implement new types of technology into their operations, and focus on maintaining customer trust.

To address these trends, the financial vertical is moving toward more engaging customer experiences — ones that are more reliant on personalization driven by artificial intelligence and proactive advice driven across increasingly interdependent channels. Technology is providing the catalyst for a service blend that is increasingly both digital and physical, and far more intelligent than in years past.

Converging Delivery Channels

According to a recent study by ForeSee, “banks and credit unions aren’t measuring digital’s impact correctly.” Based on their review of customer journeys, they contend that while an “all-digital retail delivery experience” is aspirational — it is still largely unattainable. How will this change in the coming decade? How might this impact banking strategies?

While the study shows that the physical branch remains a focal point of transactional experiences for all types of financial institutions, there has been a marked shift toward online and mobile. However, a PwC study pointed out that only 25 percent of banking products are available online — and most of them are missing from mobile banking apps.

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This can’t be completely explained away by suggesting that the industry’s digital solutions are at fault. Consumer expectations for more complete advice are simply increasing. This comes just as the business model is being challenged by evolving competition from the FinTech ecosystem and the development of external financial focused platforms.

With increased attention on meeting ever-changing customer needs through digital, and by tying together optimized physical experiences such physical card delivery and in-person advice, we will likely see other forms of service experimentation in the near future. It’s important to consider how this will impact delivery channels themselves.

The Future of Intersectional Banking

Intelligent, personal and integrated multi-channel delivery is critical, so much so that it dominated the top three most important trends for retail banking identified by industry insiders by DBR Research.

With additional attention, how might these channels change? Within financial services, we leverage physical branches, contact centers, online and mobile banking, drive-up banking, ATMs and varied forms of self-service kiosks.

There has also been a rising deployment of experiential applications — delivered online, mobile and in physical locations via tablet, digital displays and through the ATM. These personalized tools help customers use their own data and experiences to decide which car to buy, how to invest, ways they can afford a new home and much more. In the coming year, these tools will only increase in variety and form factor.

The critical component of these applications is that they are connected to one another through unified commerce. Like a double-decker bus in a new city, the customer plays the part of tourist, getting on and off at the destination of their choice. The only difference here is that the industry must prepare for the day when that vehicle may be a bus, a self-driven car, a ship, a submarine or a completely virtual experience. For now, though, we can stay a bit more grounded.

Preparing for the New Reality

There are tangible steps that financial institutions can take to prepare for more rapid channel convergence. First, truly work hard to understand your customer’s needs and how the FinTech ecosystem and large technology firms approach both customer experience design and the ability to meet those needs at scale. Simplify product lines and product value propositions across channels. Enable and optimize financial journeys across all channels — this is critical as the industry ramps up its use of personalization and customized customer engagement.

Second, it is necessary to acknowledge that while physical branches are certainly changing, they are not going away. We see many national and super-regional banks rapidly pairing down their branch networks seeking efficiencies. They are also reducing physical footprints, relocating and optimizing locations, leveraging pop-up branches to swarm new areas of expansion and utilizing many new forms of intelligent digital signage.

Increasing Technology Investment

Following in the footsteps of technology platforms, banks are becoming more focused on customer needs and developing experiences to craft a deeper relationship around those experiences. The various form factor of financial decision-making is rapidly changing.

Banks are beginning to experiment with virtual reality (VR), augmented reality (AR) and meeting the customer in unexpected places — such as their personal voice-powered assistant. Voice-powered experiences will become especially critical in the next five years, as 143 million homes are projected to use intelligent voice assistant appliances, up from 21.3 million today.

As technology advances in the financial sector, customers will increasingly interact with their own data more deeply and seek out advice from their banking and commerce relationships with increased frequency.

Where a customer chooses to engage a financial brand will become as important as why. In addressing these concerns, banks can adapt their strategies for both short- and long-term success across their entire organization.

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Bradley Leimer

Bradley Leimer is a thought leader, practitioner and consultant in the digital banking space. His most recent role in financial services was as Head of Innovation and FinTech Strategy, where his team connected banks to the FinTech ecosystem and served as a local observatory for trends originating in the U.S. He writes and speaks about banking and technology trends, and advises several startups and key industry conferences in the financial and payments space.

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