Putting the Retail in Banking, Part I: Creating Consistency

June 5 — A new report from bookingbug, Modern Banking Research: Why Banks Need to Think Like Retailers, defines the democratization of banking as “the freedom for consumers to decide how they will do their banking.” With more choices available than ever before, how can banks not only attract but retain customers? What factors, beyond just the latest banking app, will be the difference between a consumer choosing one bank over a competitor? Taking some cues from successful retailers may point banks in the right direction.

Research shows, and bankers can most likely confirm, that consumers are still divided on how they prefer to access their banks. Some are still firmly attached to their branch, while others have moved online or mobile. Many prefer to use both branch and digital options, but one thing remains clear: Customers are seeking, and not always finding, a consistently high level of service across all channels. They expect branch interactions, online banking, mobile apps and customer service calls to interact seamlessly.

At a basic level, in this age of immediacy and instant gratification, people expect transactions to be flawless. As the bookingbug report says, “While this activity is a lower value to consumers, any transactional problems that are not resolved quickly and correctly can cause a consumers to switch banks. Daily banking activities — whether conducted in-branch, via ATM or online — are considered almost the elementary school of bank interactions, and mistakes can destroy trust in a bank’s ability to handle more complex interactions.

Consulting also drives higher value products. If a customer asks a representative about saving for retirement or financing a child’s education, the representative must be prepared to provide an answer. In the digital age, this advice can be provided in-person or via video conferencing. In fact, the report suggests making a designated appointment for a customer to speak with someone who is prepared to answer his/her questions, as these consulting opportunities build even more trust when they result in a positive interaction with trained personnel.

Currently, in the U.S., about a quarter of the population reports accessing banking via online channels more now than a year ago, but only 16 percent report using online channels more for financial products and services, and this number does not increase when respondents are asked to think about the same question 12 months in the future. Moreover, while shopping for banking products online is increasing, more consumers (27 percent) use a combination of online, phone and in-branch when considering new products. (Other popular methods of shopping included mainly online/by phone (22 percent) and online/by phone only (21 percent), the latter having risen by 6 percentage points since 2017.

It seems that for now, consumers usually fall into two camps when it comes to purchasing new banking products: research online, purchase in branch or research in branch, purchase online. In the U.S., over half of those surveyed would prefer to research online, purchase in branch. Only 38 percent preferred to research in branch and purchase online. Either way, the necessity for seamless movement across all banking channels — in-branch, digital and phone — is apparent. Creating friction and difficulty for customers will drive them elsewhere.

The bookingbug survey was designed by Market Measures and updates a 2016 survey of U.S. and U.K. banks. It was fielded online from Nov. 10-15, 2017 to a group of 1,000 consumers from both the U.S. and U.K., to total 2,000 interviews. Minimum quotas for age, gender and region were set to ensure national representative samples in both countries.

This is Part I of a three-part series. Continue reading with Part II tomorrow.

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