As consumers do more of their daily banking using mobile and online channels, the need for branches is reduced. Progressive financial institutions have found ways to connect the physical and digital channels to improve the customer experience.
Remember when all a consumer’s banking needs could be taken care of within – of all places – a branch? Until recently, the local branch was the hub of all bank activity for consumers. Now, bank branches must co-exist with all customer channels as part of a larger network that’s led by digital touchpoints.
With more than half of all financial services customer interactions happening through digital channels, one would assume that physical bank locations are on their way out the door. It’s true that 1,614 branches in America were closed last year, but surprisingly, almost 38% of banking is still occurring within the walls of the remaining locations.
Why are people still visiting their local branches? As surviving physical branch activities become obsolete as they are made possible through digital means, what can be done to keep local branches alive and well?
‘Running to the Branch’ is Still a Thing
Mobile or online banking is surely growing in popularity, but visiting a local branch remains necessary for people to access their account from time to time. The main reason is that paper currency and coinage still exist, and there are people who would rather get their cash from a human teller instead of a remote ATM because it’s familiar and feels more secure to some.
Although applying for a mortgage or auto loan can be done online, for such a big financial commitment, some people feel more comfortable communicating in person with a loan officer. However, today’s customers will probably do their own online research beforehand, so the actual process may go more smoothly than in the past.
There are other important instances that call for a physical visit to the bank. From simple tasks like opening an account to the more complex, like resolving a serious account issue, some things can usually be handled with more clarity and efficiency if done in person. Yes, more and more people open their accounts online these days, but it can be confusing, and if the company does not have an online chat agent to guide them through, they may be better served in person.
So What’s the Problem
With so many reasons left to keep local branches in business, why are so many closing? Since online banking brought about the convenience of no longer waiting in long lines or dealing with stacks of paperwork, the local branch doesn’t matter as much as it used to.
Just 19% of Americans surveyed by Accenture said that they would switch banks if their local branch closed. It would not affect the rest of us, probably since we already do much of our banking online. As consumers mature into a digital-first mindset, those tasks that were once dependent upon the existence of brick-and-mortar branches will stop being part of the physical experience. So why will the local branches stay in business?
Champion, Not Victim
Instead of the local branches falling victim to the digital transformation of the financial services industry, many are increasing the integration of digital within the physical branch, courtesy of the mobile channel.
The “phygital” presence is already evident in the trend where banks send universal tellers out on the floor with a tablet to greet customers and direct them either to a window teller or an account manager. This has helped to improve the personal touch of an otherwise cold banking experience, and in some ways expedites the waiting game.
However, even a tablet-toting greeter can’t always prevent customers waiting in a long line, especially during after-work rush hour. So how can a mobile device further alleviate the queue problem?
- Mobile check-in can be implemented to give customers the opportunity to reserve a place in line even before they get there.
- Scanning a QR code or texting a code displayed on in-store signage while waiting in line can connect the customer to a virtual assistant or live chat agent via his smartphone.
- Mobile chat with that live agent can begin addressing the customer’s reason for his visit before he reaches the teller, therefore giving the assurance that time won’t be wasted. The customer may even get the transaction completed without ever seeing the teller.
- A virtual assistant can quickly take care of basic banking tasks and questions via the customer’s mobile device, leaving the more complex issues for mobile chat.
- Social media may be the first place some customers go while waiting in line. The bank should have a customer service representative monitoring their social profiles to address those customers with warm, personal attention.
- A tech bar set up in the lobby allows customers to perform online banking, check mortgage rates, or even keep their children busy with a game while they meet with an associate.
Of course, none of these mobile services would be very customer-friendly without free wi-fi in the facility.
Phygital Customers Want Phygital Banking
As time progresses and customers become more reliant on their smartphones for their banking needs, there will be more instances that arise in which the customer may still want to connect the digital experience with the branch experience (connecting the local branch with a transaction that began on the smartphone, for example). So, for those financial institutions that work to keep their brick-and-mortar channels vital to their organization, there will continue to be new opportunities to make the physical an important part of the digital.