I was greeted by a piece of mail from my bank when I arrived home today. It was unusual in that it was in a nice envelope and it felt like someone actually stuffed it by hand. In it, was a letter from my branch manager, telling me that our branch was closing. It said that I should not worry - all my accounts would be transferred to another branch and that I didn’t have to lift a finger. Unfortunately, that branch is 24.4 miles away. The letter suggested that if I had any questions, to call the branch manager…so I did.
Upon answering the phone, the representative decided to field my question herself – but apparently no one told her how to handle a call like this. She asked if I really still used the branch and suggested that I just bank online, but if it was really inconvenient, she guessed I would have to close my account. Now I became curious. Is this really what my bank wanted me to do? I asked if I could still speak to the branch manager – I wanted to hear what he thought and how he would handle my inquiry. He was very nice, but echoed his employee’s advice, saying “yes, this is really inconvenient and I wouldn’t blame you if you closed your account.” Upon further discussion, he was just as surprised as I was that the branch was closing and more than anything else, was concerned where he and his employees would be working in a few months.
I decided to take their advice and look for a new bank. Like many financial services customers, I have accounts at a few institutions, but this was my “primary account”. It’s been 17 years (every time I called my bank they thanked me for my tenure, which is how I know how long I’ve been with them) since I last looked for a checking account. My shopping process was pretty simple. I thought about all the banks that were close to me, were similar to my current bank (large national bank, good technology, broad product base, lots of ATMs) and narrowed the field to about 3 brands. I already had accounts at one of those brands, so I went online to that bank’s website, found a similar account product, applied, and my debit card is now in the mail. Over the next month, we’ll move everything over and start fresh.
I’ve had any number of customer service issues with my (now former) bank over the years, but it took this event to actually make me move. I had this vision that it would be difficult, but actually it was quite easy and I’m not sure why I never made the move before.
A few observations that I think are important for my bank customers:
- The branch isn’t dead. Despite the fact that 99% of my interactions are outside the branch, the closing of this branch was the impetus for my move. Perhaps it was symbolic, but it seemed like my bank was abandoning us. Furthermore, the local branch issue wasn’t just a push, a local presence was a key determinant in my choice of a new bank. Apparently, I’m not alone in how I think about the branch. In a study we did for the Federal Reserve Board released this year, we continue to see that customers use a physical channel, with 82 percent of consumers who have a bank account reporting that they had visited a branch and spoken with a teller in the past 12 months and 75% used an ATM in that time period. While 72% used online banking, only 30 percent used mobile banking. Branch usage statistics are certainly changing, but customers still see value in the channel. A key will be in re-imagining the branch’s role in the overall experience.
- But it may not be the sales channel we want it to be. Despite the fact that having a local branch was important to me, I didn’t go into the branch of my new bank before signing up. The entire experience was done online. Online only shoppers make up a significant chunk of shoppers (33% of financial services shoppers) according to GfK’s FutureBuy 2014, but the real opportunity (and this is why having a branch presence is important) is with the omnichannel shopper (49% of financial services shoppers). In fact, not only might the branch not be the primary sales channel, it may not even be the hub that many thought it would be in a omnichannel world, as many are saying that it is the mobile device that will be the hub moving forward, with the branch acting as one of the spokes.
- Frontline people matter. As the role of the branch changes, expectations for branch interactions will change as well. Day to day transactions are moving to digital channels, meaning that human interactions (whether in branch or on the phone) are now reserved for “something special”. Unfortunately, the branches and call centers are still staffed with transactional proficient employees. In my case, it was clear that no one bothered to train the branch personnel on what they should say when customers called in to inquire about the closing. How hard would it have been to take people through some basic training, giving them talking points so that they could reassure their customers? I’m fairly certain that telling customers to close their account was not in the script. Here was a golden opportunity to reinforce the bank’s strategy to address my needs through a combination of online, digital, and lessened physical channels – showing how the branch closing was really aligned with how I bank anyway. Furthermore, having employees questioning where their job will be in three months certainly can’t be good for morale and happy employees are more productive employees.
- Acquisition drives more acquisition. Beside the fact that my new bank has a local presence, the biggest reason I chose them was that I was already doing business with them. According to a recent study done by Jack Morton Worldwide, 80% of consumers agree that overall experience is the #1 factor in whether they purchase a product or service. Establishing a toehold with any kind of product would seem to beat all of the advertising and social media efforts in the world. In financial services, it’s about trust and safety – both of which come easier if I already have an account established.
The result of this experience (both the shopping experience and the writing experience) was a rethinking of the role played, not only by the branch, but of the human in our marketing and business strategies. Those that reviewed my early thoughts couldn’t understand why the branch played a role for me – someone who could be considered a digital native – but it did. It was irrational…but the reality is our customers act that way sometimes. I want a more efficient digital experience, it’s better for me, and it’s better for my bank, yet…when I want a human interface, that’s what I want.
In our rush to move to all digital, the question we must ask is “are we forgetting about the role humans play in creating and defining the experience?”
Keith Bossey is SVP at GfK Financial Services and can be contacted at firstname.lastname@example.org.