These are very interesting times to be in the business of consumer banking. Marked changes are complemented by business as usual, resulting in a business landscape that both looks and feels a bit different. The escalation in digital transactions is a good example of change. While already popular, mobile banking is increasingly becoming the most common way in which Americans manage their money, with many choosing it for its tremendous convenience and unbridled efficiency. Apps, websites and digital tools have been simplified, and with the current safety factor weighing heavily, even technically challenged consumers are signing up in growing numbers.
Yet at the same time, financial institutions still cherish opportunities to nurture relationships in-person as there are some parts of the banking experience that cannot be replicated digitally, despite tech gurus' best efforts. Consumers—a healthy number of them, anyway—feel similarly. As we've discussed in previous posts, a number of Americans truly do value face-to-face interactions with bankers, and being in a person's physical presence provides a sense of connection that even the fastest of internet speeds can't adequately accomplish.
"How do you establish a "phygital" strategy?
How do you find the proper balance of digital and physical as your bank or credit union hones its growth strategy? In essence, how do you establish a "phygital" strategy, where digital and mobile banking channels are leveraged as a complement to meaningful in-branch transactions, instead of positioning them as "competitors"? Achieving the delicate balance between physical and digital banking isn't easy, but it's important to ensure that the two work in collaboration in order to ensure optimal results for your financial institution. Ultimately, consumers crave a consistent omnichannel experience, so how can you best deliver it? Focus on leveraging each channel for specific purposes that play to its strengths and consumer demands. Case in point: Digital for account opening.
People prefer online for account opening
Indeed, digital account onboarding is proving to be the most effective way to recruit and sign on new account holders. As American Banker has reported, more and more Americans are opening bank accounts online than ever before; choosing the digital approach versus other methods. Indeed, a majority of millennials indicate that given the choice, they'd rather open up a savings or checking account online than in person, by phone or direct mail.
When consumers do open accounts, they tend to stick with that bank or credit union for awhile, thus the importance of strategies to draw them in and make the online sign-up or switch seamless. According to a joint report conducted by Money magazine in league with Bankrate.com, the typical adult (meaning 18 years old and up) has been with his or her bank for an average of approximately 16 years.
The branch steps in
People these days have lots of options to choose from as to where to hold their money, including fintech, community banks and credit unions, regional and national financial institutions. What fosters loyalty? While an institution's continued investment in digital technology is important, emotional connections are what keep customers and members content with where they are. As Gallup found in a study released in 2019, 20% of customers say they've formed a certain bond with their FI, established over an extended period of time through many interactions and transactions. Furthermore, the study found that fully engaged customers who have this emotional attachment to their bank wind up taking advantage of more products and services that increase earnings. Revenues were 23% better compared to customers who felt no such connection.
The branch experience supports an institution's ability to amp up the connection. Turning casual, impersonal interactions with consumers into meaningful, long-lasting ones can be accomplished by dialing up the treatment that people want. This mandates staff trained to provide service with a smile, with sensitivity to consumer concerns and a willingness to go out of their way to help ensure full satisfaction. How can you use digital tools to trigger more people to come into the branch to enjoy that attention, especially after the forced pauses of 2020?
Learning from Domino's
Incentivizing more customers to come inside rather than banking entirely online may be accomplished by following the example of the international pizza giant, Domino's. As explained by Gallup, back in 2008, the global pizza chain rolled out a mobile app that allowed customers to not just order pizza with a few finger swipes, but to actually track their order at every step along the way, from the initial request to kneading the dough, to piling on the toppings, to placement in the oven to eventual delivery. The enhanced transparency that Domino's leveraged through digital tools and eventual interaction with the delivery person improved financial conditions for the company, pushing its stock prices from just under $4 per share to over $250 a decade later.
Of course, FIs and restaurants are two separate entities entirely, but your institution may soon be able to take similar measures with respect to your ATM terminals and their ability to pair with customers' mobile devices. Optimized ATMs and interactive teller machines that feature Bluetooth technology will allow them to seamlessly connect with digital devices like smartphones and tablets. This way, users can pre-stage transactions from home or work, then finish them when they arrive at ATM terminals, making cash withdrawal faster and more convenient than ever. It also offers a more personalized experience that customers are likely to crave and rave about.
AI and in-branch relationships don't necessarily have to work at cross purposes. They can feed off one another and deliver an experience that will ultimately lead to positive outcomes. If you're looking to put your best branch forward, BranchServ can help you take the first step. Contact us today to learn more about our branch and digital transformation services.