The Post-COVID Customer Experience

By Deb Stewart

The pandemic changed a lot about the way our customers approach banking and how we meet their needs. Services that have been available for years have seen unprecedented adoption. And longstanding processes have been reinvented overnight. But how much of that change is here to stay?

The shift to digital channels

“This is a trend that was in flight pre-COVID but saw a multi-year acceleration during the early months of COVID,” says Ashwin Adarkar, senior partner and leader of the North American retail bank practice at McKinsey.

S&P Global Market Intelligence’s annual consumer mobile banking survey, conducted in early 2021, quantifies that shift: Nearly 52 percent indicated that they were visiting branches less frequently since the pandemic began. Among those respondents, more than 65 percent were also using their mobile apps more frequently during the same time frame.

Approximately 24 percent of survey respondents indicated that they had used photo check deposit for the first time since the pandemic began, more than any other feature. Other features that were recently discovered by over 20 percent of survey respondents include utilities like account-to-account money transfer, bill payment, and peer-to-peer payments. These features also tend to be highly valued by customers in general and may be contributing to the stickiness of these new patterns.

Conversely, 92 percent of respondents who indicated no change in mobile app related behavior anticipate continuing their current level of usage after the pandemic ends. Judging by customers’ anticipation of their own future mobile app usage, it seems that the behaviors that customers have established in the 12 months since the pandemic began are likely entrenched to a significant degree.

An interesting parallel to this rapid digital adoption is a deeper, broader, wider need for customers to have trust in their financial providers. According to Insider Intelligence’s Banking Digital Trust Q1 2021 study, 48 percent of respondents cited their primary financial institution as the company they’d trust most to provide them with financial services—up nearly six points in 2020. “Trust happens through personal interactions and belief in the security of transactions. Security has never been more important,” says Juliet D’Ambrosio, managing director of strategy at Adrenaline. “During the pandemic, we learned new ways to build trust not just in the branch but through video interaction. And trust is what ultimately makes relationships stick.”

Although online and mobile patterns appear to be sticky, continuing to deepen that usage and introducing mobile and online to those customers who still haven’t adopted them are both still important. “We need to continue to communicate the value to customers. It saves you time, gives you faster access, makes managing your money easier,” reminds John Smith, CEO of DBSI+CFM. “Your branch staff needs to be using these tools themselves. Then teach them how to onboard the customer in ways specific to their needs. Provide the technology they need to use either the customer’s device or one of their own. If you share a beneficial experience you become an adviser. And when you become their adviser sales and connections will improve.”

Branch management changes

Beyond digital acceleration, banks saw big upheaval in their branch management practices, from new adoption of appointments to enhanced cleaning to new life for drive-throughs. What changes in branch management will stick around after COVID, and what will bankers say goodbye to?

Appointments. Appointment-setting banking is here to stay. It’s been around a long time but saw rapid adoption during COVID. “Consumers want it and bankers want it,” says Jean-Pierre Lacroix, president of Shikatani Lacroix Design. “It’s made it so much easier for consumers to go to the bank. They don’t have to wait in line. Bankers know the purpose of the visit, so the branch is certain that the right personnel are available and can advise ahead of time if the customer needs to bring certain documents or information with them. And as bank branches move from a transactional to an advisory focus, appointment setting becomes a requirement.”

Social distancing. Anxiety kills emotional bonding. If a role of the branch is to build trust we need to address the long term social and psychological impacts of COVID. “From a branch design perspective, we are likely to see farther distances from other customers and employees,” says Smith. “At least in the near term you need to let customers know what you’re doing to keep them safe. Digital screens can explain enhanced hygiene procedures and other changes that have been made as a result of the pandemic.”

Touchless tech. Touchless technology is another trend that began long before the pandemic but has seen rapid adoption by banks and acceptance by consumers. “We believe in anything touchless. Make as many interactions as possible occur on the customer’s mobile device,” Smith adds. “Other biometric tools such as facial recognition PIN security will also see increased adoption. All of these help customers avoid germs but also offer greater convenience.”

Avoiding teller lines. The move to mobile and online offsets many traditional teller activities like check deposits and account-to-account money transfers, but with 40 percent of consumers still using cash for small purchases, there is still a need for cash handling in branch. ATMs and ITMs are becoming default cash handlers with limited cash availability at counters. Chase was an early mover to this approach. In the “next normal,” McKinsey estimates that the percentage of basic banking needs handled in-branch in the future could be as low as 5 percent.

Decline in cash. Although cash is still with us, the declining use of cash is another trend that was accelerated by the pandemic. (In fact, a slowdown in coin circulation caused a shortage of coins for many businesses in 2020.) A recent EY survey saw a 57 percent fall in cash usage among respondents, along with a rise in payments using credit cards (7 percent on net), debit cards (10 percent on net) and online payment tools (14 percent on net). Where people are still purchasing from physical stores, contactless appears to be the preferred payment option (up 34 percent on net). Furthermore, 20 percent of EY respondents expect to be using less cash and more contactless payments over the next couple of years. Instant card issue with new account openings and to existing customers presents an opportunity for banks to address this preference.

Drive-throughs. The pandemic brought customers back to the drive-through (for banks that still had them). Will this continue? “We are seeing some banks optimizing or even expanding their drive-throughs,” says D’Ambrosio. “Customers like the convenience of not getting out of their cars whether at the bank or doing curbside pick-up at a restaurant. But we expect most bank drive-up expansion to take the form of ATMs and ITMs. Both of which are flexible in terms of range of services provided but also offer great opportunities for customized communication with customers.”

Video consultations. The move to Zoom accelerated acceptance of video interactions. A recent survey by Adrenaline found 66 percent of consumers have had or would like to have personal financial support video calls with bankers. Remote access, including advisors working from branches, call centers and home offices, will become a key component of supporting customer needs not easily migrated to digital.

Bank staff driving change

The evolution of branches from transaction to advisory centers has also been accelerated with all of the shifts already outlined. The flexibility of the universal banker role with the ability to support both sales and service is a key tactic supporting that change.

The flexibility of branch job configurations was expanded further during the pandemic as many banks successfully redirected frontline staff into urgently needed support roles, often from their branch locations. Supporting contact centers through text, email or even calls brought branch associates into whole new roles. Using branch staff for ITM support also took customer facing skills to a new medium.

Equipping branch staff with the skills needed for these shifts is a challenge. In a May 2021 study by Bridjr and SLD with 1000 senior and mid-level executives showed only 51 percent of respondents rated skill and talent capacity as good to excellent. “Investment in HR processes and more effective employee journey mapping and onboarding are needed to ensure the success of this continuing transformation,” says Lacroix.

In the period since COVID-19’s emergence, banks have executed major initiatives (migration of tens of thousands of employees to remote settings, processing Paycheck Protection Program loans and disbursement of Economic Impact Payments) at speeds that even many bankers thought impossible. This leaves bankers asking themselves: Why we don’t act like that all the time? How can we keep up the pace?

“Banks will need to institutionalize these working models, maintaining the accelerated pace once the near-term crisis has abated,” says Adarkar. “Early evidence suggests that companies that were already embarked on an operating model transformation for speed responded more swiftly to COVID-19 and that there is a strong correlation between the level of agile maturity and rapid response in launching COVID-19-relevant products and services. Beyond the pandemic, consumers expect the instantaneous. Speed is the norm for fintechs, so bank velocity needs to increase. Perhaps this was an upside of the pandemic?”

Deb Stewart is a frequent contributor to ABA Bank Marketing.