The Bank Branch Digital Transformation Trifecta
The financial services industry ranks as one of the top markets to experience massive digital disruption in the coming years. So, how will the bank branch be impacted? We have an idea of where bank branch digital transformation is headed…
In 2016, Ernst & Young introduced its Banking Relevance Index (BRI), designed to measure the importance of traditional banks to customers’ lives. After surveying financial service institutions across 32 markets worldwide, the firm reported an average global bank relevance score of 75%. Not bad, but what’s contributing to the missing 25%?
That can be a lot for an industry that faced little to no competition in the not-too-distant past. The emergence of digital-only banks and alternative payment methods, combined with rapidly evolving customer needs and preferences, has undoubtedly turned the market on its head. But this hasn’t stopped demand for traditional banking. Consider that only 14% of customers worldwide feel “extremely confident” in the banking industry, yet bank reliance remains strong. So strong, that the number of accounts at global financial institutions grew by 700 million between 2011 and 2014.
This tells us that banks aren’t irrelevant—they just need to go further to meet customers’ next-gen needs. If you ask us, the best way to improve this BRI deficit is to focus on branch transformation.
Viva la Branch
Bank branch digital transformation is at the heart of today’s financial services industry. Worldwide, 44% of customers say they would not trust a bank without branches, with that number being much higher in some markets (e.g., Mexico with 63% and Malaysia with 54%). Meanwhile, 60% indicate that they want to visit a branch or call a person to purchase a new product or get advice. The retail bank branch is still very much needed. In fact, 22% of Australians prefer to visit branches with a third of over-55s selecting that option. The question is: how can it be made more open, integrated, agile and future-proof?
Enter the trifecta of bank branch digital transformation:
Deliver a High-Touch Experience
There’s no denying that customers want banking experiences to be fast and efficient, yet they also desire personalization and relevancy. This is exactly why we’re seeing brands like Suncorp evolving from traditional retail branches to “concept stores” that are designed to offer intimate, one-on-one experiences. Organizations across the globe are also now emphasizing zones or centers that target specific financial activities (i.e., applying for loans, refinancing, wealth management) to drive meaningful conversations that guide customers through oftentimes complex processes.
And for not-so-complex processes, they’re advancing with highly-secure self-service solutions (like video kiosks). Consider Bank of America, which is currently testing “completely automated” branches that feature automated teller machines and video-conferencing technology for customers to engage with off-site bankers.
In many ways, a high-touch approach can be the catalyst needed to drive innovation, competitiveness, revenue, and customer advocacy.
Make the Branch the Core of Your Omnichannel Experience
Multichannel is vital for interacting within a range of industries, especially banking. In fact, over 60% of global banking customers say it’s important to them. But what exactly constitutes “multichannel?” This can’t be several channels operating in silos. Rather, it must be a 360-degree, fully-integrated environment that supports end-to-end customer journeys and breaks barriers imposed by outdated bank structures.
As Ernst & Young reports: banks “need to think beyond a ‘multi-channel’ approach, in which channels are often organized in silos with individual reporting lines and performance targets, creating instead an ‘omni-channel’ organization, with the customer at the heart of channel strategy and design.”
Taking this one step further, institutions should be placing the branch at the heart of this omnichannel journey. This means, for example, the ability to route customers to branch specialists regardless of where they are within the organization, and enabling them with ubiquitous data access and unified reporting.
Evolve from a Service Center to an Advisory Center
An important part of bank branch digital transformation involves an advisory approach. Employees once known as tellers are now emerging as bank ambassadors, designed to guide customers rather than upsell. Consider JP Morgan Chase: the bank’s traditional balance of 60% transactional staff and 40% advice staff at legacy locations has reversed at newer centers, where 60% of staff now provide financial advice.
Despite the rise of the autonomous, digital banker, research shows that better advice and education can help improve most customer experiences:
- Over one-third of global customers are digitally savvy but do not have a firm grasp of financial products nor the financial choices they make
- Almost half are not yet comfortable with digital channels
- Only 26% believe their primary financial institution provides unbiased advice
Improvements must be made, and this begins with providers rethinking their customer approach. This may include focusing on data and analytics to identify areas that affect customers’ understanding. Or, it could mean a shift from teller lines and formal conversations to casual yet personalized experiences. It should always mean doing the right thing for the customer by providing unbiased, high-quality advice.
How else can you transform the branch? Read my blog “Bank Branch Innovation Like Never Before: 5 Brands Redefining Tradition” to see how leading financial institutions are strategizing to get ahead.