Losing the Relevance of Bank Branches
The migration from branches to digital channels continues. According to a Feb. 8 report in The Wall Street Journal, the banking industry closed 1,700 branches in the 12 months ending in June 2017, this was the largest one-year decrease ever.
Not only are branch numbers falling, but the relevance with the consumers is falling too. I’m sure you remember the day when branch location was the primary decision criteria when selecting a new bank or credit union. Now it’s fallen to third place according to Novantas research (2017 Omni Channel Shopper Study). A superior digital banking experience is now number one. In a different study (2017 Account Opening and Onboarding Benchmarketing Study) they found that about one-third of all consumers prefer to open their account digitally.
Looking at all of this research, it would appear that consumers increasingly prefer digital service over face-to-face branch service.
But not so fast.
Digital Channels, still not Engaging
While consumers continue to adopt digital channels, they’re not exactly thrilled about the service they’re receiving. A January poll of more than 1,600 digital banking users revealed that 68% of Americans who have used digital banking in the past year were frustrated by the experience. One-third polled were so frustrated, they told Harris Poll and D3 Banking Technology, they were willing to leave their financial institution in search of a better digital experience.
The report, as well as Novantas research, indicated two digital banking pain points for consumers.
- First, many institutions haven’t evolved digital banking beyond basic transactions, like checking account balances or transferring funds. Consumers want more – at a minimum, mobile deposit, P2P and mobile account opening. Savvy consumers are already asking for artificial intelligence capabilities, biometrics, and voice-driven interfaces.
- Second, most digital banking solutions don’t provide optional human engagement. In the event of a problem, most systems require the user to abandon the digital channel and seek a phone representative or branch employee.
Creating Digital Engagement
What’s the difference between digital transactions and digital engagement? About an hour. On average, Facebook users spend about an hour each day on the social media platform. Compare that to roughly 54 seconds a day that typical customers interact with a leading global retail bank and it’s clear that financial institutions are missing the engagement mark.
The retail engagement has changed drastically over the last 10 years. Rather than talk at customers, educating them about the benefits of products and services, companies now speak with them. The difference is two-way dialogue that listens to customers’ wants and needs … a lack of two-way dialogue defines the digital engagement gap.
Eliminating the digital engagement gap can seem overwhelming to a financial institution struggling to do it all – provide high-touch service to those who need it and high-tech service to those who want it – all the while complying with myriad regulations.
Is there hope to make Digital more Engaging?
Absolutely. Going forward, banking strategy must partner with third-party technology providers to create two-way conversations and transition from a transactional data mindset to an engagement mindset. Without it, banks and credit unions will be left behind, relegated to little more than transaction facilitators while business models that focus on engagement will win more complex and profitable functions, like lending and wealth management.
POPi/o Video Banking is an excellent way to improve digital banking engagement. Providing an on-demand video representative provides consumer with the reassuring touchstone of human problem-solving they crave in a branch … but with the convenience of having that branch like experience in the palm of their hand. POPi/o Video Banking can expand a financial institution’s footprint in a meaningful way beyond branch locations because the platform supports document sharing, signature capture, and workflow management. We even monitor emotional expressions to give video representatives positivity coaching tips that ensure customer satisfaction.
POPi/o Video Banking is a two-way digital engagement solution. Together, we can advance banks and credit unions into the digital age and transform consumer banking.
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