Are consumer expectations fueling technological development, or is technological development fueling consumer expectations? It's a classic "chicken-or-the-egg" question that banking professionals have debated for years. In terms of ATM investments, most seem to believe it's the former, according to a recent ATM Marketplace report.
The debate will likely never be settled, but one thing is certain: Consumers have a seemingly insatiable appetite for the Next Big Thing. Whenever a state-of-the-art device is released or a long-anticipated software update announced, consumers line up to be first adopters. Furthermore, technological innovation has become so commonplace that if one developer dares to pumps the brakes, consumers have no problems jumping ship, knowing full well that competitors will satisfy their thirst for digital sophistication.
With this reality as a backdrop, banking professionals must be constantly thinking not two, but three steps ahead to ensure that they're catering to an increasingly sophisticated customer. In essence, banks and credit unions must get into the minds of account holders, thinking as a customer would, so as to never settle for second best.
"'Customer mindshare' rests on four performance pillars."
Achieving "customer mindshare," as McKinsey & Company describes it, rests on four performance pillars:
1. Physical footprint
As its name suggests, the first pillar involves increasing your branch or credit union's visibility, or "point of presence," for your bank or credit union. While branch counts have declined in the last decade, banking services are as popular as ever. This explains why, despite branch contraction, nearly 60% of banks expect to invest in more ATM locations, according to ATM Marketplace. And every location – whether it is 100 square feet or 10,000 – is an opportunity to make an impression on consumers with technology, branding and design.
FI executives should be sure to run the numbers to see how they can diversify their investments and enhance their physical footprint, based on the services that are most in demand.
2. Digital maturity
How important is digital banking compared to the personal, in-branch experience? If Americans were forced to pick between the two in 2015, most consumers would give up personal touch for the convenience of online access, according to Gallup. And with digital occupying significantly more banking real estate now, that gap has only widened. That said, in-person banking is very much alive, due to the fact that 80% of consumers prefer face-to-face exchanges for more involved banking services, according to a Samsung survey.
The McKinsey & Co. report noted that digital maturity is strongly associated with growth in banking accounts and unit sales. Interestingly, even if deposits aren't particularly high-volume via online methods, it doesn't mean they won't improve by other channels. In fact, the opposite is true. So long as the capability is there, deposit activity tends to rise, whether in-person or over the phone.
3. Share of voice
Generally speaking, any bank – or business, for that matter – can increase its customer base via strategic advertising. That's what "share of voice" is all about. Indeed, as the report found, deposit share – meaning number of deposits – is "highly correlated" with digital advertising and marketing expenditures.
Through signage, calls to action and referencing specific customized services, banks stand to gain a bigger portion of the account holder pie. Share of voice may be particularly effective through online marketing and advertising, as 53% of new customers now open their checking accounts via the internet, whether with mobile apps or via online browsers, according to data from Javelin Strategy.
"Highly satisfied customers are three times more likely to increase deposits than those who are less satisfied."
4. Customer experience
With the rise of automation giving individuals more control over how they manage their accounts, banks and credit unions must ratchet up their attentiveness to see to it that customers get more than they expect to receive in terms of assistance. Doing so can pay substantial dividends, as highly satisfied customers are up to three times more likely to make additional deposits with banks than their less-fulfilled contemporaries, McKinsey & Co. reported. The same is true for signing up for new-product services, only to a much larger extent – consumers who are pleased with their overall experience are as much as five times more likely to try new things with your FI!
Customer mindshare can only be achieved by putting your best branch forward in every way. BranchServ has the transformation, automation, security and service equipment you need to make that happen. And we have the expertise to help you improve your game so patrons won't just see the difference, but feel it. We're cross-trained in multiple disciplines and have the foresight and insight that can help you anticipate and get out ahead of the Next Big Thing.
Consider contacting us to arrange a no-obligation demonstration.