Understanding the "Customer of the Future" to Better Prepare the "Branch of the Future"

By Suzi McNicholas, VP-Marketing, Source Technologies

Suzi McNicholas, VP-Marketing, Source Technologies

Much attention has been given to the concept of the “Branch of the Future” with some predicting wholesale changes to the form and function of bank branches, and others predicting their demise entirely. As a result, the branch is going through an identity crisis of sort, but what seems clear is that, contrary to what some prognosticators have been saying for years, the branch is not going away any time soon. A recent Reuters article stated that “U.S. Banks Want to Cut Branches, but Customers Keep Coming,” and that “bank executives argue that branches remain crucial for acquiring new customers and doing more business with existing ones. Closures, they say, would hurt revenue more than help reduce costs.”

For these reasons, we can expect the branch to remain viable, but should also expect it to evolve and keep pace with the preferences of today’s consumers. To fully understand the branch of the future, we must first attempt to better understand the customer of the future. The millennial generation, in particular, is accustomed to more automated processes, and in order to stay relevant, banks must gain a stronger understanding of their behavior patterns in order to cater to their needs and wants.

As a demographic group, Millennials more than perhaps any other are shaped by technology. Unlike generations prior, the advent and widespread usage of computers has infiltrated everything from telephones, to television and radio, to the very way food delivery is now performed. The adoption of user-facing technology is a hallmark on this generation, and iconic brands who failed to adopt these technologies are finding that they no longer have a chance to survive in today’s marketplace.

For the financial services industry, the same holds true. While banks have invested heavily in their online and mobile channels, they have often viewed the branch as simply an antiqued POS venue. But, as the industry is learning, this view is not necessarily shared by millennial bank customers. For millennials, making a trip to the branch isn’t a problem; the problem occurs once they step inside and encounter the host of manual, paper-based processes used within many branches.

“Bank executives argue that branches remain crucial for acquiring new customers and doing more business with existing ones”

While the perception that millennials select banks primarily on their digital offerings remains viable, BAI recently cited that 38 percent of customers rank branch location as the number one factor in bank selection compared to 12 percent picking leading edge technology. With millennials expressing both an interest in branch banking and placing such a large importance on digital, why aren’t banks doing a better job of bringing the digital experience into the branch? The retail industry has had significant success bridging the traditional retail and digital experience with programs such as mobile pre-order and same-day delivery. Meanwhile, bank branches have been left relatively unchanged. Implementing interactive, customer-facing technology into the bank branch can bridge the divide between the two, and replicate the digital experiences millennial customers are more familiar with via their phones into the branch.

When evaluating technology to integrate into the branch, an efficient self-service kiosk solution is a good option to provide user experiences that are more consistently linked with those of smartphones, while also optimizing staffing efficiencies and using minimal branch space. A customer can then move seamlessly from the smartphone screen as they enter the branch, to a self-service kiosk screen that is both aesthetically and functionally similar in design. Self-service kiosks can handle traditional teller transactions which, in turn, allow branch staff the freedom to assume more meaningful, universal banker roles within the bank. Self-service kiosks take innovation one step further by utilizing NFC-reader technology already embedded within mobile devices to automatically queue customers’ account information, along with any transactions waiting for approval, as their mobile device enters accessible range. Having customer information and pre-staged transactions ready creates a more efficient banking environment, while giving branch staff the opportunity to focus their attention on providing exceptional customer service and more effective cross-sell initiatives.

As the millennial influence continues to impact the banking industry, financial institutions must truly understand millennials’ expectations if they are to thrive. Optimizing the branch environment to include more interactive customer-facing technology benefits both customers and staff. 

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