Why behavioral insights are vital to branch transformation

April 19, 2018 12:00 PM

Reinventing the customer experience is a key objective for many financial institutions (FIs) now and will be in the future – and a key component of that experience is each FI’s approach to branch transformation.


Getting branch transformation right can help ensure that your business continues to reap the benefits of a strong network of physical sites - such as strong customer relationships and revenue generation opportunities - while maintaining efficiency and keeping costs under control.


At the heart of this is understanding how customers behave and what they really want from the branch experience.


The importance of behavioral insights


Without a strong understanding of customer behaviors and preferences, it's extremely difficult - if not impossible - to execute a successful branch transformation project. If an FI  knows what is important and valuable to consumers in the modern-day branch experience,  meeting expectations and, as a result, maximizing satisfaction and strengthening brand loyalty becomes much easier.


For example, having clear and reliable data on the most common reasons for people to walk into a branch and the preferred ways to carry out certain transactions can help an FI deploy resources accordingly. This can contribute to more efficient use of staff time and a quicker, easier experience for the customer.


The wide range of ways in which consumers are now able to interact with their bank means there are many channels through which you can collect data. Core bank databases and branch teller systems, for instance, can be extremely valuable sources of information, as long as reliable analytics methods are in place to sift through the data and deliver actionable insights.


Deploying new solutions to improve interaction management, queuing and appointment scheduling - such as Q-Flow from NCR - can also enhance an FI’s understanding of what customers want and how best to meet their needs.


Of course, there are also more traditional methods of getting to know customers, such as conducting surveys of people from different demographics to find out what they expect and appreciate in the branch experience. In-branch feedback - positive or negative - can provide opportunities to learn from a customer base and adapt strategies accordingly.


Banks are also working to increase their efficiency by studying and responding to patterns in business. Noting that people often come into branches for mortgage advice on Thursdays, when estate agents are open late, for example, can help to ensure that the right staff are in place to meet these needs.


Taking the branch into the future


Investing in behavioral analysis and coming up with clear strategies to improve customer understanding can play a key part in reimagining the concept of the bank branch.


As NCR has explored in this whitepaper, we are moving towards the idea of Branch 3.0, whereby branches are defined not by factors such as location, space and time, but by activity. Perhaps most significantly of all, these physical sites are distinguished from other banking channels by human interaction between staff and customers.


Bank staff therefore need to be given the time to effectively engage with consumers and develop their understanding of what people value and expect in the branch experience. One of the ways to achieve this is by migrating transactions away from the traditional counter and into the self-service and assisted service channels.


Giving branch staff the flexibility to focus on revenue generation and high-value engagement with customers is particularly important considering the following transaction costs:


  • ATM: $0.60 per transaction
  • Assisted service or video teller: $1.20 per transaction
  • Face-to-face engagement with a human teller: $4.00 per transaction


As the idea of the bank branch continues to evolve, one thing we can be sure of is that most consumers will expect skilled face-to-face contact with their bank. The frequency of engagement might continue to fall, but the value of the discussions being had is likely to rise, as people turn to their banks for help with major, complex financial decisions.


Getting branch transformation strategy right - based on a strong understanding of customer preferences and behaviors - could be vital to the overall success of financial institutions in the years to come.