How have the times changed?
Within the Financial Marketing world, there are a few interesting trends. Some of these are direct impacts from the changing consumer landscape.
One of those impacts is the (sometimes contested) necessity and functionality of physical branches. More and more, transactions that would normally take place within branches can now take place entirely online, or over the phone. Moreover, more and more banks, credit unions, and other financial institutions are getting heavier into the mobile space, allowing the customer to get instant access almost anywhere.
On the customer side of the equation, the availability of being able to complete banking transactions remotely has clearly increased substantially in the past few years. Paying bills, transferring money, finding the information they need, and applying for loans. With all of that available without actually needing to leave home, the office, or a vacation post at the beach, doubtlessly customers would opt to make less frequent trips to the bank. And of course, they have. The benefits of remote and online capabilities extend very deeply to the financial institutions end of things, as well.
Digital sales, these days with a growing capacity on mobile devices, include a whole host of products; from investments to auto loans to mortgages and simple checking and savings accounts. With that being the case, one might start to wonder how much physical branches are necessary at all. However, quite a few people actually do opt for at least occasional trips to the physical branch, at least once a month.
Furthermore, the CFI Group’s study provides that only 3% of survey respondents chose their financial institution based on a website or mobile app. This indicates that while these functions are important for both the customer and the financial institution, many other factors are considered in actually deciding which institution is the right institution.
The environment these days;
A recent study by the Financial Brand found that “Every channel experienced a substantial increase in positive experience, with the branch gaining the most (7.2 percentage points), putting it at 60.7%, just behind the internet at 63.8%.”
“As was the case with ATMs decades ago, consumers prefer the convenience of new technologies, combined with the assurance of a local branch.” Branch channels should not be avoided, or else a financial institution may experience a very real decline customer acquisition. Branches, especially as a presence to be physically in or a part of a community in some small way, are still important. Visibility is still important. Branches merely need to be utilized differently.
Branches may not see the traffic they used to, but even still, an FDIC study conducted last year shows “thousands more offices exist today at a higher per-capita rate than they did in 1970, when there were just 4.2 offices for every 10,000 people. These results suggest technology is not necessarily a substitute for physical locations” (2). This seems to indicate that the best way forward for financial institutions is to strike the perfect balance of multi-channel delivery to the customer’s needs and the financial institutions’ allocation of resources.
At the end of the day, the best advice still is to put oneself in the customer’s shoes. If something your financial institution is attempting to do to reach out to customers would not engage you, then it might be time to reconsider the strategy.
With more and more customers fulfilling their needs online, how will your branch strategy adapt?
- source: http://www.slideshare.net/davekerst/peak-performance-presentation
- source: http://independentbanker.org/2015/05/holding-fast/
- source: http://thefinancialbrand.com/50778/bank-credit-union-digital-branch-strategy/