Financial technology (fintech) products are gaining more and more momentum among private banking customers and banks are doing their best to keep up with innovation speed. This is regardless of their own involvement in funding startups and cooperating with fintechs – parts of their core business are still under pressure. Supporting branches and therefore being relevant to a large target group, which prefers physical interaction over digital, is one of these areas. Believing the general buzz, branches will have no relevance in a digital future. Or will they?
Don’t believe everything you read on the internet (except this article) or you might be lead to the conclusion that bank branches are a hopeless case already. We’re talking about digital natives, innovate or die and mobile only seems to be the way to go. Apparently. In fact, people are turning towards digital solutions for their financial needs, yet they don’t completely abandon traditional channels. Today, financial advisers and branches play an important role for banks when it comes to customer retention, even regarding millennials. In fact I do see a lot of potential hidden with bank branches to master the overall shift towards an all-digital society and please a large segment of customers along the way.
Go digital for convenience. Stay personal for trust.
A branch can be a bank’s most important instrument for branding and customer relationship management: 10 per cent of bank customers state that they would be likely to open a new bank account with a direct bank once their bank shuts down a nearby branch. This is simply because they mostly still prefer personal consultation over digital, which they choose primarily for a lack of a branch close by or out of laziness. While technology is a blessing, speeding up and simplifying processes, it is still incapable of mimicking human interaction (it will take years for chatbots to reach a level that is indistinguishable from a human, conveying the same feeling of trust and understanding). Plus, there are people who just plain like to visit a branch.
Millennials are the most regular visitors of bank branches, a US-based study found. Additionally, they are most active when it comes to using their phones and computers for banking purposes, making them the most-involved customers segment for banks. Being digital-only would cause problems. Multi-channel seems to be the way to go here, with parts of the employees working in branches substituted or supported by robots and intelligent terminals, which would speed up processes and improve the user experience. Customers could start interacting and managing their visit with the help of technology until they finally meet a real human being in the end. But what for?
Win their hearts. With coffee, cookies and gadgets.
Branches will need to change. Period. Customers will continue to visit branches, for example when they want to get informed on loans, asset management or other rather complex topics – and that is where banks need to step in. It will probably not be economical to have many small branches but rather to have a few bigger ones. These will need to have some kind of flagship character, strongly branded, representative and conveying a feeling of exclusiveness. Forget about dull and grey halls with a dozen of counters and moody consultants. It needs to be a place to stay, with stuff to see and do. Here’s a vision:
Imagine a really large room, bright and friendly, an open space. Comfy armchairs, lots of outlets and chargers to plug your devices into. WiFi, free coffee, water and cookies, pleasant music in the background. A ‘loungy’ feeling. Step one accomplished: people don’t feel they are not invited or don’t belong here.
The most important chance a branch offers for banks is to showcase what you are capable of, what you are working on and what you will be able to offer your customers in the future. Present the latest technology to proof that you are cutting-edge and innovative, present your technology partners and their innovations. Are you exploring possibilities to enhance your CX with virtual or augmented reality? Communicate it in your branch. Why not showcase an MVP of your upcoming app (we know as a bank you cannot just throw an MVP into the market – but hey, this is a safe space) or do product tests with your customers not behind closed doors but openly in the branch.
Make the place a gadget garden to show off your tools and knowledge. This gives customers the strong impression that your bank is actively working on future technology and is investing in customer satisfaction.
This could also lead to a greater acceptance of inevitable fees or (still) lengthy processes. Branches are a chance for banks to communicate their brand identity effectively and make customers perceive them as progressive and highly personal. We’re not machines, we are still human and a strong brand needs a human touch while being at the forefront of technology innovation. Branches can be a great instrument to accomplish that.
This article was written on behalf of our customers and first appeared on their blog. This version is a translation of the original written in German.