To badly misquote Mark Twain, the reports of the death of branch banking have been greatly exaggerated.
It’s understandable how those reports began. For the past decade, banks have dealt with a wave of digital disruption. Customers showed a pronounced preference for digital in their routine transactions, so banks became laser focused on their digital presence, which seemed to presage the future of banking. Routine banking activities — deposits, withdrawals, cash transfers — became automated. Fewer customers waited in line at the bank teller drive-through, and fewer still stepped inside the branch itself. Customers embraced these changes and, from all appearances, it seemed the bank branch of the future might be digital only.
Banks by-and-large mastered the self-service digital transformation that customers demanded for their simplest, most common transactions. Yet in the process they may have discounted the role the physical bank branch would continue to play. A report from Celent, “Delivering Excellent Customer Service: When and How Consumers Prefer Face-to-Face Engagement and What It Means for Banks,” reveals why it may be time to rethink that approach. Celent found that a majority of U.S. adults (55 percent) prefer in-person interactions with their bank when a conversation is needed. For quick questions, such as those about transactions or account charges, 53 percent of respondents said their preferred choice was to call their bank’s contact center. The report also found that 77 percent of adults prefer face-to-face interactions when a more in-depth conversation is required, like discussions about financial goals or when applying for a new account or loan.
What These Revelations Mean for the Future of Banking
The march of banks towards digital transformation was a smart move. However, Celent’s report reveals that banks need to take a page from the retail playbook, taking a more omnichannel approach to customer interactions. What are the takeaways for branch banking?
- Deliver excellent customer service at every touch point. Whether through a mobile app, a call center or a bank branch, banks must provide exemplary customer service with each interaction. The goal should be to eliminate friction and seamlessly deliver the help or information their customers need.
- Constantly evaluate and experiment. Test, test and test some more. Assess customer experience (CX) and user experience (UX) to learn what your customers want and need from you.
- Explore how the in-person and digital experiences interact. CX should be seamless across all of your channels. Your customers demand to interact with you when and how they want. Ensure that every channel meets those demands and that the UX doesn’t vary widely from one channel to the other.
- Ensure staff are equipped and trained to meet service demands. The Celent report notes, “In self-service channels, technology defines the customer experience, but in the branch and contact center, customer experience is in the hands of frontline staff.” Make certain branch and call center staff have the right equipment, such as tablets where they can quickly access relevant, context-sensitive customer information.
- Stay agile and prepare for disruption. Today, customers still want a mix of digital and in-person options, but customer preferences will surely shift with time. Keep your design, deployment and training teams focused on your apps, call centers and branches so that CX remains the top priority.
The Role of the Branch Banking Experience in Customer Retention
Customers are fine with (or even prefer) self-service for simple engagements, but complex and involved interactions must be more consultative. Why does a higher level of service within the branch matter? Customers have not abandoned their local bank branch, so it’s beneficial for brick-and-mortar locations to be reimagined to support concierge-level services and build meaningful customer experiences at every customer touch point.
To again cite the Celent report, reasons to rethink the bank branch come down to customer loyalty and retention. When asked what negative branch experience would prompt them to switch banks, customers said a bank associate not equipped to provide help (68 percent), a long wait time (55 percent), and impersonal service that gives the impression the bank does not know them or their needs (49 percent). Just as a decade ago the focus on digital transformation was essential for long-term survival, the focus on the branch experience has now become essential. The bank branch of the future depends on building lifelong customer loyalty.
How prepared are you for the future of banking? Learn how to improve the efficiency and customer satisfaction at your bank branch with our guide, How Retail Banks Can Thrive in a Digitally Transformed Industry