Despite seven months of ever-streaming facts, figures, statistics and surveys designed to provide greater understanding about the novel coronavirus, the only thing that appears certain is uncertainty — ironically enough. It is unsettling to know that while COVID-19 can be benign for some, it can also be unpredictably lethal. And while we move closer to a vaccine, the nation does not seem destined to return to "normal" in the near future.
That said, financial institutions can't afford to play "wait and see" any longer if they want to remain competitive and retain their customer base. To the contrary, America's banking institutions must put the pedal to the proverbial metal, with strategies in place to increase consumer engagement and spur growth as they work their way through the pandemic and out the other side.
That's the conclusion of two newly released studies conducted by McKinsey & Company, titled "Transforming the U.S. Consumer Bank for the Next Normal" and "Reshaping Retail Banking for the Next Normal." In it, the authors concede that while it remains unclear how long the pandemic and social distancing measures will remain in effect, consumer banking institutions must leverage both digital and branch transformation efforts designed to recruit and retain account holders and provide the kinds of high-caliber, seamless services their customers demand.
Case in point: Digitization of sales and service. Prior to the pandemic, consumers were already actively using mobile means of banking via apps, online access and automated technologies. However, community banks and credit unions trailed larger FIs in overall digital adoption. Indeed, McKinsey & Company found that 28% of the average bank's sales for credit cards were executed digitally. That's a stark contrast to 37% for major FIs.
The separation was similarly stark in digital sales of auto loans, averaging 17% to 26%, respectively.
"To boost digital customer experience, banks need to design their solutions based on a deep understanding of what drives customer perceptions of convenience," the study's authors wrote.
Call center conundrums
Convenience is king in virtually any consumer buying space, and it is ultimately what drives satisfaction. But just as there is room for improvement in digital adoption among consumer banks relative to their upper-quartile counterparts, direct banks are trailing behind retail banks' in their call center services.
"Call volumes soared 33% between December 2019 and April 2020."
Due to lockdowns and lobby closures, banks have received an uptick in calls from their customers requesting assistance. As McKinsey & Company found, call volumes soared 33% between December 2019 and April 2020. Wait times, meanwhile, more than tripled in that four-month stretch.
Yet even before the surge occurred, direct banks had struggled in this area. Approximately 40% of direct banking customers in a recent J.D. Power study said they waited on hold for five minutes or longer before speaking with a professional who could assist them. The survey period was between December 2019 and January 2020.
Bob Neuhaus, vice president of financial services at J.D. Power, said direct banks must redouble their efforts to optimize their call centers.
"Getting the formula right on customer service and client communications will be particularly important as direct banks contend with the fallout of the COVID-19 pandemic in terms of account servicing and a significantly lower interest rate environment," Neuhaus explained.
Build an omnichannel workforce
Whether by website, mobile app, on the phone, or face-to-face, consumers have a number of channel options for their banking needs. Perhaps the best way to ensure their satisfaction with your service is by developing an omnichannel workforce, so associates can smoothly pivot from one task to the next on an as-needed basis. To do this effectively, banks will need to have clearly defined talent pools from which to draw, McKinsey & Company advised.
Additionally, financial institutions will need to lay out paths for development and benchmarks that associates can use to recognize their opportunities for improvement. State-of-the-art technology can enhance visibility for decision-makers across channels and allow them to observe employee productivity.
Anticipate branch changes
As Sound Financial CEO and Chairman Laurie Stewart noted recently during a virtual conference hosted by the Federal Reserve, Federal Deposit Insurance Corporation and Conference of State Bank Supervisors — per American Banker — the pandemic may go away but a number of operational changes are here to stay. Nowhere is that more evident than at the retail branch. If you're evaluating next steps for your branch network, do we have the e-book for you. In "Post-Pandemic Planning for FIs," you'll discover many action items that can help you succeed and adapt to the next normal in a variety of areas, including drive-thru, in-person banking, branch layout and design and so much more.
Help us help you by contacting BranchServ today.