The customer experience is the never-ending journey for all parties involved. Not in the literal sense of course. For the Financial institutions however, there is a need to evolve consistently. This has never been truer for the in-branch experience. Financial institutions of all sizes that operate branches as part of their distribution channels have been consistently modernising and transforming the branch to meet their customers’ expectations.

It hasn’t necessarily always been about the customer though. The ATM for example was first introduced by FI’s not for the customer, but for the branch staff. A counter-intuitive statement, I know. The ATM wasn’t there to reduce staff, however that may at times have been the result. The reason for the installation of this technology was, and it remains the case to this day, to move non-revenue generating tasks away from the tellers. This was done to increase teller productivity and revenue.

Since the introduction of the ATM, financial institutions have been almost obligated to find operational improvements to benefit their shareholders or members. With the customer experience taking centre stage as the driving force of differentiation, the rationale behind the implementation of new technologies in the branch has changed.

This change in approach, which is customer centric, emerged first in retail. The shift in retailers identifying the consumer experience as a key differentiator happened earlier than in the banking industry because of the information available to consumers, like the ease of switching where you shop or a competitive marketplace based on price. To stop margin erosion and the race to the bottom, retailers needed to find a more profitable, less harmful way of competing against each other.

A combination of factors meant that FI’s had to shift the focus of their approach too. The internet provided a place that gave consumers in-depth information which created a better educated consumer. It also ushered in the commoditisation of financial products as a result of the availability of price aggregator websites driving down prices. Consumers themselves demanded a better customer experience and more focus from FI’s as they grew accustomed to their needs being increasingly important to retailers.

As Moore’s Law continued to prove true, and technology as a whole developed just as quickly, to remain competitive FI’s had to implement changes utilising technology to create productivity improvements and sales opportunities. The key in the implementation was that the focus of the technology was on improving the customer experience, with the more operational benefits being by-products rather than the focal point of the implementation.

The consumer journey has and still continues to develop. . The nature of the ‘how consumer expectations develop’ means that FI’s are almost always playing catch up to keep their customers’ loyalty and happiness.

We have seen different branch formats emerge as potential future layouts, from the branch as a destination for example, to coffee shops, yoga studios, etc. Another format that we have seen explored are branches which rely heavily on technology to serve customers, particularly when thinking about non-revenue generating transactions.

The latest events across the globe may have shifted the consumer expectations away from the frictionless journeys that were in vogue, and very much close to a utopia in the minds of today’s consumers. Hygiene and safety are likely to be at the top of the list. Customers might also be re-thinking their desire to meet friends and socialise in the best coffee shop in town, never mind in the bank branch where the product focus isn’t coffee.

It is maybe even reasonable to expect consumers to be keener than ever before to visit the branch when it is only necessary. It is also reasonable to accept an inclination to spend as little time as possible in the branch. There are still technology solutions that can enable these customers to interact with their bank or credit union.

When a vaccine for Covid-19 is found or when life has a more familiar sense to it, customer expectations will, like the customer journey, evolve too. In the future, technology will still help financial institutions to serve their customers and differentiate the in-branch experience.