What Do Today’s Customers Want from a Bank Branch?
Fact: Today’s customers (particularly millennials) are moving their banking online, and visiting local branches much less often. In the UK alone, this shift has seen nearly 6,000 branches shutting up shop since 2010 – and the story looks much the same across Europe and indeed the rest of the world.
It’s easy to understand why. Closing branches means real savings for banks, many of which are finding themselves with extensive (i.e. expensive) networks of increasingly redundant real estate. In 2017, Forbes released figures showing that setting up a new branch typically costs between USD 2 million and USD 4 million, and keeping a branch running costs between USD 200,000 and USD 400,000 per year.
Arguably then, banks would do well and save an awful lot of money by closing as many branches as possible. A sticking point remains, however – customers still want branches. Though many customers now prefer to complete everyday transactions on smartphones and banking apps, there comes a point when they feel the need to speak to a financial professional in person. Perhaps they want to start a new business, make plans for retirement, or organise a loan or mortgage. At these times, there’s simply no substitute for talking to a real person in a real bank.
This leaves us with something of a dilemma – banks can’t afford to maintain their branch networks, but they can’t afford to close them either. Customers still value their local branch, and so closing the doors on branches means closing the door on customers, too.
Clearly, a more innovative solution is required. But what will it take to keep branches relevant in the digital age, and justify their existence for banks? What is it customers want and expect from the modern bank branch?
Branch Customers Want Personal Attention and Less Friction
It’s easy to think that the shift towards online banking equates to a decrease in the importance of in-branch customer interactions. In fact, the opposite is true. The rise in digital banking actually increases the importance precisely because those in-branch customer interactions are far less frequent.
Recent research from Samsung reveals that while 77% of customers still seek out face-to-face interactions when dealing with complex financial matters, poor branch experiences make them more likely to defect to a competitor. The biggest pain points cited by customers included unprepared banking associates (68%), long wait times (55%), impersonal service (49%) and the unavailability of specialists (43%).
When a customer visits a branch, they want to be engaged, receive personal attention, and not have to wait around in order to be seen. This all comes down to branch experience. Young people in particular, have grown up using Facebook, Google, Amazon – companies which have devoted billions of dollars into creating intuitive and frictionless customer experiences. They expect the same when they visit a branch, and nothing less will do.
Branch Customers Want Digital Experiences
Most customers begin their journey online. Many will end it there, too. But for those that still prefer to come into a branch to handle certain aspects of their personal finances face to face, the digital experience can’t be left at the door.
Unfortunately, however, the retail banking experience can often leave a lot to be desired on this front. A recent McKinsey article suggested that many physical branches are “old, under-occupied, and poorly maintained.” This causes frustrations for customers when they must continuously explain to an employee who they are and what they need, when they know the bank already has this information.
Technology solutions could be used to improve customer service here. The Samsung study reveals that customers would be most excited by in-branch greeters who were prepared for their arrival with personalised information (62%), an expanded mobile app where they could check-in or compare wait times at local branches (55%), and interactive touchscreen displays to explore products and get advice while they wait (53%).
This chimes with further research from Accenture, which reveals that customers are demanding the branch goes digital – 64% said that it’s important to have devices that allow them to access their online banking in the branch, and 66% said it’s important for branches to have advanced ATM machines.
Final Thoughts
In order for the branch to remain relevant to modern customers, banks need to ensure that their physical locations are well-maintained, well-staffed, and equipped with the technology to deliver the personalised and prompt experiences today’s customers crave.
Commenting on the findings from the Samsung report, Bob Meara, Senior Analyst at Celent, sums up the situation succinctly. “These results highlight the continued premium placed on face-to-face interactions when it comes to banking, and yet as these institutions continue to modernise, they must continue to invest in delivering excellent customer service. Investments in technology and staffing must reinforce the branches’ current and future strategic role. If banks do not provide a compelling sales and service in-branch experience to customers, it may be costly.”
