By : Carol Hamilton
July 29, 2014 11:30 AM
Bank customers are increasingly making greater use of multiple channels, moving to online access and mobile. But the pattern is far more complex than a simple less-branch, more-online approach.
As a report from McKinsey highlights, banking customers still want branch access, and expect the highest levels of service when they walk in through those doors. So what exactly is it that they value about their branch?
More and more transactions take place through direct or digital channels. McKinsey suggests it could be 95 percent of all banking transactions within five years. Far from sidelining the branch, it makes the in-store service delivery all the more vital.
“When customers do visit a branch…the stakes will be higher,” says the report, entitled The Future of US Retail Banking Distribution. “They will be coming for sales and advice or to resolve a complicated service or transaction requirement.”
Customers may value automation, but they want the option of meeting a human and talking face-to-face, especially when transacting complex business or if they just want advice. KPMG advises that 55% of retail bank customers deposit funds, seek advice and purchase through their branch network.
Accenture also found 66 percent of bank customers still prefer to “talk to a person” rather than purchase a banking product online.
Crucially, Mckinsey advises that the branch converts 85% of applications to sale, compared to only 15% by the digital channel.
Emotional needs are paramount. As McKinsey points out, money is an emotional thing-it causes stress, it causes happiness. Focusing too much on improving execution and processes, banks may miss the opportunity to address the “behavioral and emotional needs of their customers,” it suggests.
Attitudes about online bill payment highlight this. “For customers, receiving, queuing, paying, confirming and then storing a paper bill offers benefits that standard online bill pay offerings do not replicate,” says McKinsey. A sense of “ritual” satisfaction from completing the task manually matters to consumers.
According to the Future of US Retail Banking Distribution study, there are three key emotional needs that must be delivered by the bank through its branches-belonging, autonomy and empowerment, as well as trust and security.
For banks, the branch occupies an irreplaceable corner of their operations-it’s the only way they can service the personal and emotional needs of their customers.