A new report from JD Power indicates that though significant numbers of US customers have adopted digital only banking, they remain less satisfied than those who continue to visit a branch as part of a multi-channel experience.
Another interesting finding is that branch visits are not a generational phenomenon, at least not in the way you would expect. The gap in satisfaction between digital centric and branch dependent customers was most pronounced among Millennials and Generation X.
Whilst most of the talk has been around the overall decline of bank branches, and this has been particularly true of larger US banks, it is also interesting to note that there are 1000 new branches opened each year and the report notes that at least two of the large banks are now committing to 'opening hundreds of new branches that will focus on helping customers with more complex requirements'.
Why is the branch visit still regarded as an integral part of the service offer by most customers and what are the implications for retail banking service providers going forward? There is no doubt that nearly all services can be provided by a combination of self-service and other digital channels. It is not a question of whether a customer can do it at home or via a mobile device. It's about personal experience. There are occasions where they need, or at least seem to want human interaction and it gives them higher levels of satisfaction.
In the US, for example, between 85 and 90 percent of all new accounts are still opened at branches. What implications does this have for branch location? How far will customers travel to open an account?
In June last year CACI research forecast that branch visits in the UK will decline to just four per customer by 2022 but over half the population will still visit a branch. What can we conclude? There will be less frequent visits, but the evidence suggests these are still regarded as an important element of banking relationships. Customers still want choice when it comes to which channel they use. Is the nature of customer convenience changing in an omnichannel environment? Does the delivery of effective customer service involve a full choice of easily available service channels and what does “easily available” mean from a branch location perspective?
Consumers will choose the channel they feel is appropriate and convenient to them at a particular time. It is what they are comfortable with. If they need a branch (and many still do) then they will expect that branch to be near at hand. Because people visit less frequently does not imply they are prepared to travel further when the branch is their channel of choice. When they need a service they want and expect it to be convenient - where and when they need it.
Of course, there is more to convenience than location, there is also the range of services and the speed, consistency and efficiency with which they are delivered. The high service levels across digital channels should be replicated in the branch, with highly trained staff available to deal with customer requests and the effective deployment of appropriate technology. The key is that technology facilitates improved personal service.
Evidence shows the branch remains key to best in class customer service. At Glory we are working with financial institutions worldwide to deliver the branches that meet customer needs in an evolving omni channel environment and to do so within the budgetary constraints imposed by an increasingly competitive financial services market.
