It’s 2018, and it seems everybody owns a smart phone, succumbs to a Netflix binge and opts for Amazon Prime next day delivery. It would be easy to assume that we are entranced by instantaneous gratification, whether shopping for your favourite fashion brand at 11 o’clock in the evening, expecting an immediate reply to a message, or being frustrated if your chosen news source doesn’t keep you up-to-date to the minute, and we would be correct. However, something strange is happening – despite the abundance of non-social technology, recent studies such as Mercator’s survey on consumer preferences on banking channels suggest consumers prefer human interaction over the alternative, and yes, even when it comes to financial institutions.

Research on frequent ATM users has shown that over the last 3 years, the channel with the largest rate of growth was “Went into branch and spoke with a teller”, increasing fifteen percent to a total of 76% of respondents. Despite continued growth and trends towards mobile and digital (mobile app usage increased 7% over the 3 years for the same respondents), consumers are naturally drawn to human interaction. Why? It enables trust, strengthens a sense of value, and is ultimately more personable. Physician-author Abraham Verghese, MD, highlighted in a talk at Standford University how vital technology is, but it’s not going to take away “the importance of the human interaction”. When we are making financial decisions big or small, we want the advice of somebody knowledgeable, someone with expertise that can provide insight and understanding. From insurance policies to mortgages, to that loan to start your next project, speaking with someone engrains a sense of trust and reassurance in our decisions.

Several banks have experimented by doing away with the traditional branch, instead offering self-service alternatives, but not with the altruistic outcome they hoped for. The banks contended they were streamlining processes, making the consumer’s life easier, but instead customers reported finding machines irritating.

Perhaps the reason for this is because machines are linear in their solutions, whilst humans have unique and individual problems who desire attentive and meaningful attention. The long and short, consumers want to feel cared for.

Banks also tried to introduce video tellers (VT) in an effort to maintain the personable aspect within digital banking, but ultimately struggled to win over the consumer. Furthermore, while on paper VT’s offered functionality and trust, they proved to be poorer revenue generators than their human counterparts (Customer service representatives and tellers). In Mercator’s survey, consumers were asked what their preferred channel method for depositing a $1,000 dollar check would be. Just 3% would use a ‘Teller-assisted videoconference’, compared to 54% going to a ‘Teller in a branch’. Consumers are embracing more digital channels, but despite this, only 21% would opt to scan the check with a PC or smartphone.

So how do we keep the bank branch relevant?
The study also identified the value of the bank branch. Respondents were asked what they would do if the nearest branch of your primary financial institution was closed: 9% of customers would switch to a bank. For any company, a decision that causes the loss of almost 10% of their customer base would be considered an extremely negative impact move.

As consumers we are more connected than ever and being able to jump into a chat via a mobile banking app for a quick query is great, and being able to schedule an appointment at the press of a button helps us stay on top of things throughout the day, but that’s just the start of the journey. In fact, 40% of channel engagements start in the branch, but a significant 77.9% end in the branch (Foresee, Experience Index Banking Report 2017). To consider that 36% of journeys start online, 18% via mobile, and 5% through a call centre, it is clear that the bank branch has to be an important centre pillar in a financial institution strategy.

Perhaps now more than ever, equipping banks with the tools to help enrich their branch experience is critical to deliver the right customer journey inside the bank branch. In the UK, Nationwide has completely reimagined and redesigned their branches to be ‘community focused’, splitting the space into several areas: the Convenience zone; the Conversation zone; the Consultation zone; and the Community zone. They are rethinking the bank branch around the thing that matters most: people.

Banks across the world from Europe to Latin America have tried to reduce overheads by closing branches and providing their customers with two options: a digital first concept, and if you need a branch, travel further afield. This leaves consumers disgruntled and feeling undervalued. Their local branch employees may have known them as ‘regulars’, a human to discuss your family and hobbies; the alternative option, switch banks. The old adage people buy people, not products is still pertinent, and the solution is not a single-channel model, but an omni-channel solution, where technology and machines exist alongside humans to enable them to become better conversationalists, understand their customers better and help them solve their problems effectively. The Challenge for financial institutions now is finding the right balance between reducing their overheads, delivering customer experience and nurturing trust.