Retail banking: is this the end of the branch experience?


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Is this the end of the branch experience? Year in, year out this question proves to be the ultimate rhetorical question. This year is no different.

Yes, Covid-19 is having a dramatic impact on the retail banking experience. Yes, many banks temporarily reduced their branch footprint during lockdown. Yes, the pandemic has accelerated FinTech and other digital adoption trends. Yes, customer behavioural change has been so profound that banks need to rethink their branch models to enrich CX. But don’t underestimate the power of the branch as banks start to recalibrate their future.

In a post-pandemic world, the continuing shift from transactional to experiential banking will still have the same transformational power for banks as experiential retail will have for high street stores. Legacy brands that invest heavily in their digital capability will have a head start over their competitors. But, banks that keep investing in remodelling their branch network will keep their biggest competitive advantage over digital challengers – human interaction.

Customers still want personalised face-to-face interactions and help with more complex financial decision making. Banks can’t close branches altogether because customers will not let them. Best-in-class banks recognise that branch innovation sits at the crossroads where the physical is fused with digital to create a seamless, differentiated experience in the new normal.

Banks have been rethinking format, purpose and location for years to transform the branch experience and make their CX easy, convenient, relevant and personalised. The pandemic and forced customer behavioural change is accelerating these shifts away from transactional models to a more complex, high value branch operation. The bricks and mortar is staying but the purpose will change.

Branches will be built on empathy and support

Customers are seeking a safe financial harbour

Grey economic skies mean that customers are seeking financial security and safety from their most trusted provider. Banks with a branch network have an opportunity to build trust by providing assurance and showing empathy. When customers make financial decisions that are complex, they are steeped in emotion. Their buyer journey may typically start digitally as they do their research and seek recommendations and advice. The customer will then turn to the channel they most trust to speak with a real person. If their most trusted channel is their branch then banks need to cater for that empathetic need for individual care.

As McKinsey says, ‘personalization – and the empathy and connection that go with it – are more critical than ever’. Customers will be looking for these trust signals in the way branch staff interact and how their bank responds to meet their immediate and evolving needs. The quality of the branch experience for customers who are seeking a safe financial harbour could impact how the bank is seen for years.

Bank associates will need to play a more strategic role in the customer journey

Pre-Covid, the automation of routine and low-value tasks meant the role of bank staff was already becoming more advisory. The crisis has accelerated this shift in branch purpose. Redeploying, retraining and retooling staff to support customers and provide advice on higher value services and products is a top priority.

Introducing new services and products

New offerings from banks will increasingly come from additional products and services most of which do not exist today. These will enrich customers’ lives. They will help customers in financial distress as the economic impact of the pandemic continues to bite deep. But, banks already have a poor reputation on this.

‘The challenge is that even in normal times, banks are not well-equipped to help customers discover and apply for new products and services’ – McKinsey

In fact, pre-pandemic, ‘shopping’ for products was the single least satisfying banking journey, according to the consulting firm. There is an experence gap because banks tend to focus on the ‘what’ in terms of products, while customers tend to make judgements based on ‘how’ these products are delivered. The ‘how’ is about service. Do I trust you? Do you treat me as an individual? Are you empathetic? Responsive? Reliable?

As Accenture reports, the 20 largest global banks have paid more than $327 billion in fines for mis-selling financial products since 2012. If the answer to just one of the questions above is no, then banks need to think about new in-branch relationship models to fix things.

Using customer-facing ecosystems to rebuild trust

Customer-facing ecosystems are seen by some banks as a possible model to rebuild trust, according to Accenture. When you think that 89% of bank leaders see this model as the main driver of value creation in their industry, it should be on most CX roadmaps right now. Before we go on to explore the reasons why, let’s first define what we mean by an ecosystem.

What is an ecosystem?

An ecosystem is essentially a customer-centred network through which products and services are delivered by interlinked companies.

‘Banks that offer these integrated, contextualized experiences … support their customers, not just in getting financing to buy a house, but in the whole journey to move in, becoming hyper-relevant in their customer’s everyday life.’ – Accenture

Adding value at the right moment of need

Ecosystems are a powerful opportunity for branch staff, that have the customer in front of them, to transform these interactions into relevant, personalised experiences. A branch associate that has just helped a customer buy their first home, say, has a unique opportunity to introduce the customer to other financial and non-financial services and products from partners at the right moment of need. Video conferencing means that an introductory call can be set up there and then in branch.

Giving branch staff access to the masses of customer data that banks collect

Some banks are realising the power of the customer data they collect to help them better serve customers. But, there’s a note of caution here. This should not mean just selling a customer more financial products.

An Amazon approach to cross selling financial products has been tried by some banks with negative reactions from customers. The rich data available from a combination of transaction, website visits, mobile app use, and branch and telephone banking interactions can result in effective data analytics to understand current and future customer needs. Many of these needs may not be consciously recognised by a customer.

One of our clients has invested substantially in data analytics to predict the upcoming needs of their customers. But, this insight is of little value if used as a prompt to hard sell. We have worked with the client to introduce a ‘curious questioning approach’ that verifies the intention highlighted by customer data and ensures that the intention of the advisor is to uncover real needs that the customer can be helped with. We often hear customers say: “It’s funny you should say that, I was just starting to think about that, you are a mind reader….”

Breaking ground on in-branch digital experiences

Many banks are introducing new technology to their branch staff that enables a very different customer interaction. The traditional customer ‘interview’ across a desk with a computer screen that cannot be seen, but which seems to decide whether the customer will be able to buy their dream home, are becoming history.

One of our clients has seen substantial improvements in customer satisfaction, employee engagement and commercial results by digitising the branch experience. The introduction of tablets and redesigned branches incorporating soft informal seating is enabling side-by-side ‘consultative’ discussions with customers (subject to Covid-19 social distancing at the moment) where the screen is shared with the customer and the most appropriate product or service to fit a customer’s needs can be explored and illustrated. This is a much better collaborative experience for the customer and the advisor.

The branch-in-a-tablet

Other banks such as Alliance Bank are also leading the way on creating superior in-branch digital experiences. The Malaysian bank has rolled out its first fully-digital in-branch experience. The project took just six months to complete and customers can use its ‘branch-in-a-tablet’ to manage all of their finances in one place. The bank offers customers a seamless online and branch experience. As Techwire Asia reports, ‘many customers still value the assurance, interaction, customer service and security of in-branch visits’.

Fast account opening times is ground that digital-native banks have owned for years. Alliance Bank is changing that. Within 20 minutes, customers can use the tablet to open an account, activate their debit card or online bank account. No more frustrating queues or return trips to complete an application. By offering customers a self-serve in-branch option, the bank has reduced account opening times by 70%. Staff also have 75% more time to spend on quality customer interactions.

Some final thoughts from us on retraining staff to deliver a digital branch experience

As we mentioned earlier, retraining, redeploying and retooling branch staff is crucial as banks transition from transactional to experiential banking models.  Much of our work with banks has been in helping branch staff to educate customers about the benefits of using in branch self-service machines, online and mobile apps to complete everyday transactions.

Some customers were early adopters of digital channels, but the rate of adoption had slowed pre Covid-19. At the time, many banks were ‘deflecting’ customers to digital channels as a means of reducing branch staffing levels, but significant cohorts of customers valued the face-to-face interaction with staff and did not wish to self-serve. Many staff were also reluctant to migrate customers to digital channels, seeing this as a precursor to making their roles redundant.

Our work has included helping branch teams identify the benefits to customers and employees of appropriate digital migration, such as the parent who needs to transfer funds to their student daughter and has typically done this by a branch counter transaction. Highlighting the benefits of being able to do this anywhere, anytime is a clear benefit for a customer. Helping a customer to complete their first digital transfer, then ensures that the customer feels confident to do it again in the future.

For the employee, training in higher value consultations with customers in more complex financial products, such as mortgages, means that the work is more fulfilling, more trained staff are available to customers and the bank has more capacity to fulfil customers more profitable needs. This all brings back to the original question. Is this the end of the branch experience? No. Not this year.

Republished with author's permission from original post.

John Aves
John is passionate about customer experience as a strategy to drive customer loyalty, employee pride and profitable growth. He believes that every successful customer strategy needs to focus first on the people within the organisation. John's experience has enabled him to combine senior line management roles with that of a board level consultant, facilitator and advisor.


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