One of the biggest questions in modern banking is how branches can maintain their relevance in an increasingly digital age. Usage of mobile and internet banking has grown exponentially, but bank branches still have a relevant and important role to play. To keep winning customer’s hearts and minds however, they must continue to transform.
Aware of the challenges that banks face, we conducted research into the physical channel and its role in the banking customer experience. Our study proved something we’ve believed for a while – that consumers like physical touch points as part of their banking experience. Almost two-thirds of people still value the fact that they can visit a branch, and a similar number feel that it’s important that there will always be bank branch staff to speak to about financial matters.
So what’s the role of the branch today and more importantly, tomorrow and beyond?
Consumer banking preferences continue to change, and our study found that over eight in 10 people (85%) have used online banking via a computer, laptop, tablet or a mobile banking app in the last six months. For most people however, access to physical branches continues to be important, with over half (59%) saying that they live or work within three miles of their local branch.
Working closely with our customers, we are well-aware of the challenges of transforming branch networks – which requires a balance between meeting the needs of increasingly digitally orientated consumers, while responding to pressures to become more cost efficient and sales driven.
Crucial to any branch evolution strategy is innovative and technology, which consumers are increasingly embracing and expecting. In fact, most respondents agreed that self-service machines in their bank are easy to use, and even more think that technology will play an increasingly important role in bank branches in the future.
Design and format
As financial institutions evaluate their current branch networks, they are looking to create new branch formats that offer customers enhanced banking journeys that are more closely aligned with their needs – whether that’s more expert advice or a desire for convenience and speed of service.
We found that people agree that having a bank with a branch design that’s easy to navigate is important to improving their satisfaction as a customer. About the same number (54%) said that having new smaller branches in convenient locations, such as shopping centres, would improve their overall customer experience.
This is why we are increasingly seeing banks redesign their branch formats and turn towards a tiered approach. New networks should be anchored by larger flagship branches offering personalised advisory services alongside the latest technology innovations, plus full-service and community branches, in addition to micro branches that provide simple, transactional services. By taking this approach – that in some cases may specifically target SMEs – financial institutions can create customer experiences that match the services customers are likely to expect in each location.
The role of the branch is changing and it’s up to financial institutions to take this opportunity to create re-defined in-branch customer journeys that build closer relationships between customers and their banks. It’s great to see that consumers are positive about the future of in-branch services and technology because they are set to play critical roles in improving customer service levels, as well as helping banks gain the operational efficiencies they need to stay competitive, and ultimately win customers’ hearts and minds.