By Dr. Cheryl Flink
Online banking and mobile apps have become ubiquitous. Consumers have the power to conduct transactions anytime, anywhere, from the device in their pocket. Given that convenience and 24×7 access, there has been much discussion about the future of the retail bank branch and whether it is still necessary. Should banks assume that technology has displaced the need for local branches and the tellers and advisors that work directly with consumers in person?
Quite simply put—no. In research conducted with over 9,600 banking customers in the fall of 2016, Market Force Information found that a surprising 68% of consumers had visited a bank branch in the past 90 days to conduct a transaction. In addition, 20% had visited a local branch to speak with an advisor about products and services. Those who did reported 5% higher satisfaction levels than those who didn’t, and they were 8% more likely to recommend their bank to others. And those visits occurred in spite of the fact that three-quarters of these consumers had downloaded their primary bank’s mobile app.
So why are consumers still coming to physical branches? In short, because the advisory experience answers complex questions. Those visits also afford banks the opportunity to build trust and loyalty with consumers, an important endeavor considering 12% of consumers studied indicated they are considering switching primary banks in the next six months.
The research revealed that consumers value three key factors in their relationships with their primary banks. These factors are vital to both satisfaction with their primary bank and a customer’s willingness to recommend the bank to friends and family. They also play an important role in preventing customers from switching banks. Doing well on these three factors insulates banks from competition. They are:
- Transparency and fairness: Banks communicate information clearly, resolve issues efficiently, charge fair rates, and are transparent about what those rates are and how to avoid unnecessary fees.
- Security and reputation: The bank itself is secure and financially stable, has excellent security policies to protect data, and handles routine transactions flawlessly.
- Ease of doing business: The bank customizes products to fit consumers’ needs and is genuinely interested in consumers’ unique needs and financial well-being. It also provides personal financial tools to help save and invest wisely, and is vested in the local community.
Now, enter the advisor. Each interaction with a consumer is an opportunity for an advisor to embody these three factors. The advisor has the distinctive opportunity to work with the consumer one to one, clearly communicating about products, rates and security policies, and listening intently for what consumers need. Their recommendations based on that listening-ear will solidify the banks’ relationship with the consumer.
The research also found that 15% of all consumers are dissatisfied with their relationship with their bank, and 19% would not recommend their bank to others. Why? Because banks tend to handle the mechanics of banking very well (security, efficient transactions, etc.), but miss on the ability to establish relationships with consumers. In particular, banks have a very hard time conveying that they care about the consumer’s financial well-being. In turn, consumers generally give poor ratings for their banks’ ability to understand their unique needs, customize financial products to fit those needs, and provide financial planning tools. This means banks that can differentiate in the products and tools they offer consumers and/or create great advisory experiences, helping them prevent customers from switching banks and capturing more market share.
Here’s one last startling finding from the research: 29% of all consumers called the bank’s contact center in the last 90 days. They called primarily about fees, lost or stolen cards, and deposits and withdrawals. These are the basic transactional experiences of banking, yet 17% were unhappy with their experience with the contact center. This channel is another opportunity for banks to create great customer experiences and advocacy, and should not be overlooked when assessing ways to build loyalty among customers.
So, as we continue to rely more and more heavily on our mobile devices for everything from groceries to transportation to personal finance, let’s not lose sight of the fact that people still need people to help them navigate the complexities of life. And that human interaction is where banks can exceed customers’ expectations and deliver exceptional experiences.
Dr. Cheryl Flink is chief strategy officer for Market Force Information, a customer experience management company that helps businesses, including banks, create an exceptional customer experience, build loyalty and protect their brand’s reputation.