Successful Retail Banking Needs to Blend Digital and Physical for an Engaging Customer Experience
For at least the last 20 years, banks have been doing their best to dissuade customers from visiting branches to transact and to turn them to digital services instead. The rapidly broadening horizons of custom enterprise software has helped them achieve much of their goal, and today there are many bank customers who rarely, if ever, visit a branch. Instead, they use the internet or their mobile phones to pay bills and transfer funds. Deposits of cash and cheques still require some physical interaction, but today the queue is at ATMs, not at bank tellers. This mass migration was achieved by making over-the-counter fees prohibitive, hitting the customer in the pocket.
With the benefit of 20/20 hindsight, this might have been a short-sighted strategy. First, the focus was on cost reduction, not on customer experience. Traditionally, in all global markets, the ability to migrate from one’s current bank to a competitor was so onerous that customers stayed with the devil they knew, despite being dissatisfied with service issues and pricing. Now, all that has changed: companies that do not keep their customers happy will see them take their business elsewhere, and the bank’s sustainability will be severely compromised.
In order to improve customer experience, banks are focusing on digital transformation and often excluding branch presence completely. The steady erection of barriers for customers to interact directly with bank staff, forcing them to communicate via IVR (interactive voice recordings) and call centers, has generally eroded trust. How to regain that trust should be one of the key drivers for any bank’s strategy.
Trust in banking is layered; there is basic trust in the stability of the bank and its ability to perform banking transactions, but there is also trust in the advice offered by the bank on products and services.
Accenture’s report shows that in 2018 banking customers’ trust and satisfaction was the highest since 2012. Digital services might be driving these figures, but for many human touch is still very important. Among the respondents, 70% need the option to voice a complaint to a human support rep, 63% want to be able to open an account at a physical branch, and for nearly half of the surveyed personal guidance on using online and mobile services is essential.
Another study by Accenture from this year points out that trust doesn’t always equal loyalty — although showing high trust in banking institutions, certain customer personas will have no problem switching to non-conventional financial services providers.
To be fair, the global slump in 2008, combined with the subprime mortgage scandal, has had a lasting effect on banks’ reputations, which has helped to fuel the shaky relationships between banks and their customers. The reason we are harping on it is that, without trust, building superior customer experiences is just not going to happen.
Human trust is still built on personal interactions. One may have a useful conversation with a chatbot, but there is no meaningful relationship there. In the good old days, you could approach your bank manager for advice and help on new personal requirements. Now there is only a generic bunch of people called “front-line staff” who have differing amounts of knowledge and advice depending on how adept your bank is at training them. Half of the bank sits in back offices, and “do not speak to customers.” Really? Are the customers not good enough?
In order to build some solid relationships, bank staff need to be out there meeting and greeting customers, getting to know them by name and gradually rebuilding trust. This can be challenging when the bank has done everything in its power to chase customers away from branches. Some banks have got the point, and implemented innovative design and tried to create more of a retail experience than a financial one. A Dutch banking giant started the trend 15 years ago with its ING Direct brand based in Orange coffee shops.
