Trust isn't given; it's earned. Ever since the financial crisis of 2008, the banking industry has been under intense pressure to regain the public's confidence, especially individual customers. By increasing transparency and implementing necessary and recommended reforms, financial institutions have earned back much of the public's respect and approval, with 43% of respondents in a Gallup poll saying they have a positive view of the industry, up sharply from a decade ago.
In fact, according to a separate survey conducted by the American Bankers Association, 90% of Americans say they're satisfied with their primary banking facility.
It raises the question: How have banks turned things around? What are they doing better now that they weren't doing – or weren't doing as effectively – before? Answer: By giving the customer what they want. What is it they want? In a word: everything – in so far as it improves the overall retail banking experience.
The following are some of the ways in which financial institutions have expanded the umbrella of retail banking by listening to their customers and making smart investments to better respond to customers and redefine consumer banking.
"Digital adoption has fueled access to these more wide-ranging financial services."
The ever-expanding retail banking umbrella
They don't call it the digital revolution for nothing. In virtually every way imaginable, technology has transformed how people process, obtain and access information, goods and services. Perhaps no better example of this – in the business-to-consumer sense – is evident within retail banking. Back in the day, both consumer banking – as well as much of commercial banking – primarily involved the safekeeping of money, loans, investments and cash transactions. Today, the banking experience is akin to one-stop shopping, where consumers go to apply for credit cards – baby boomers average 3.5 of them, according to estimates from Experian – certificates of deposit, debit cards and certain wealth management services. Digital adoption has fueled access to these more wide-ranging financial services and made it easier for banks and credit unions to "branch" out – both in the literal (more locations or networks) and the figurative sense of the term.
It isn't enough, however, to merely provide more financial services. Consumers expect that the product offerings available will work for them and their needs. Take online banking as a classic example. Due to its convenience, online banking is the preferred banking channel for 72% of Americans, according to a separate survey also performed by the American Bankers Association.
At the same time, though, there remains a seat at the table for tellers and bank staff. That's because many of the services consumers seek can't be resolved by a machine, at least not sufficiently. As a survey from J.D. Power revealed, nearly 80% of customers are interested in receiving financial advice or guidance from bank personnel. FIs have listened to their customers and been able to introduce state-of-the-art technologies without compromising the one-on-one interaction account holders enjoy. Indeed, 75% of banking customers have paid a visit to their branch at least once within the past six months. Furthermore, 40% of respondents want digital and traditional banking services to work in tandem.
"66% of banks today offer digital account services."
The value of diversifying retail assets
Some banking facilities who are resistant to expanding the retail banking umbrella contend that diversifying too much risks profitability. The data suggests otherwise. According to research conducted by McKinsey & Company, online banking – while undoubtedly popular and a preferred channel – generates only 25% of sales. To remain profitable, banks and credit unions need to do everything possible to keep customers satisfied and returning for the financial products they use throughout their lives. And what do customers want? The best of both worlds. According to American Banker, 66% of banks today offer digital account services. However, as a separate survey from J.D. Power & Associates corroborates, the most satisfied banking customers use the one-on-one offerings available at branches in addition to the digital services that could be performed at a branch, an ATM or online.
Invest in training
Every person has talents, some of them innate, many of them learned. The ideal banking professional brings many skills to the table, whether they are tech whizzes or naturally personable. It's finding the former that can prove challenging, given the fact that technology is changing so rapidly, to the point of becoming obsolete shortly after it's introduced.
That's what makes training so important for bank staff. Granted, ATMs, ITMs and other dispensing units are intuitive and many customers are able to operate them without much of a learning curve, if any. However, studies show that providing intensive training can pay substantial dividends for customers, as they're relying on their branch or credit union to be the resident expert. As Gallup found in a banking industry study, customers find that when trying to learn about digitally geared banking service offerings, human interactions are three times more helpful than other methods, such as tutorials.
Furthermore, by investing in human-machine learning (i.e. training) in concert with AI technologies, business have the potential to improve their profitability by close to 40% by 2022, according to an Accenture study.
Rachel Chang-Cunningham, senior vice president and division manager for Honolulu, Hawaii-based Central Pacific Bank, told BAI that training has helped the personnel at her FI become "digital ambassadors."
"About three years ago, we trained all branch employees on our digital banking solutions so that they could help teach our customers," Chang-Cunningham explained. This has enabled more of her workforce to become universal bankers, which 40% of FIs are successfully deploying, BAI reported. That's up from 39% in 2017 and 23% in 2016.
"A core component of universal banking is helping staff provide a better overall experience for their customers."
A core component of universal banking is helping staff provide a better overall experience for their customers. A 2019 BAI study conducted in tandem with Kiran Analytics indicates as much, as respondents cited 'in-person customer experience" as the most important strategic priority to their bank's performance.
Optimize your ATMs
While interpersonal and digital banking solutions are equally important, banks can't discount the value of ATMs. They remain as popular as ever, nearly 50 years after their original deployment. Based on figures collected by ATM Marketplace, the average ATM in United States today is used around 300 times per month, with 40% of users going to one eight to 10 times over the same period.
Investing in advanced ATM terminals can optimize this banking channel by enhancing convenience, reducing wait times and providing another port that customers can turn to when seeking more complicated transactions. These are all critical to the overall banking experience. In fact, ATM performance can be the deal-breaker for customers who might otherwise consider switching banks.
Being all things to all people may seem a tough task, but as FIs' achievements and positive customer feedback have proven, it's hardly impossible. BranchServ can help your bank or credit union put your best branch forward to keep customers happy and achieve a competitive advantage in your market. Contact us to learn how.