Why Bank Transformation Should Be ‘Digital First’ Not ‘Digital Only’

While pundits and bankers constantly debate the future of older channels, consumers' only stake is getting the best banking service they can. For that, financial institutions must learn to make all retail banking methods work together.
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The accelerated adoption of self-service and digital banking tools during the pandemic is causing banks and credit unions to change how they use branches and call centers.

While some would suggest that the pandemic shift will bury branches faster, BAI research indicates that nothing so simplistic is going on. Leaders are examining how branches and call centers can be refocused in a “digital first” environment to help provide strong customer service for all channels.

This approach optimizes the way customers interact with their bank by building integrated products and services that combine digital-first capabilities with support from more traditional channels that complement digital banking or serve a unique need.

Bank Branches to Drive Relationship Building

BAI research indicates that branches will not go away completely. Leaders may be reducing their footprints or reconfiguring their purpose, but there will be a real need for the foreseeable future for branches — and for the sake of consumers that have proven to be misunderstood.

In the BAI Banking Outlook research on 2022 trends, financial services leaders reported the top three ways customers utilize the branch network are to open or close an account, conduct a transaction, and resolve an account problem. Surprisingly, the generation that had the most touchpoints in a month was Gen Z, who averaged 5.9 branch or drive-up interactions per month. The least traffic came from Boomers, who only made 2.8 branch or drive-up monthly interactions.

Another BAI survey asked leaders about their top three priorities for branches in the future, and the responses indicate that they are preparing for shifts in customer behavior while still supporting their current demands. In the survey, 66% of financial services leaders said that relationship building and marketing are top priorities, followed by digital banking support (51%) and account opening and closing (51%).

Accordingly, institutions are shifting spending to transform the branch experience. Among the top places investments are going now are to developing advocates to promote and explain digital services and equipping them with tablets providing a 360-degree customer view. To serve transactional business, banks and credit unions are investing increasingly in interactive teller machines with remote tellers.

This is part of a wave of change. BAI research found that in 2021, 60% of financial services organizations had made changes to staff, 33% had added teller pods, and 23% had implemented contactless service. This indicates that financial services organizations see the branch as not only a place for in-person interaction, but to also leverage digital banking tools to supplement the interaction.

This requires leaders to balance current demands with the trend towards more self-service over time.

Read More: After 10 Years, Digital Transformation Still Eludes Most Banks

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Call Centers Transform Into Digital Banking Support

Savvy financial services leaders changing how they use call centers.

With more routine business being handled digitally, the calls that remain often involve more complex needs. Once again, research found that the younger generations account for the most interactions with live agent call centers. According to the BAI Banking Outlook 2022, Gen Z made an average of 6.6 monthly interactions via phone call, with Millennials calling 5.8 times per month. Boomers made the fewest calls, averaging only two interactions per month.

In fact, other BAI research has found that the most common reasons for call center queries concerns the need for digital banking support. Consumers calling for help when using digital banking for the first time were the most reported reason for calls to financial services organizations, followed by seeking help using mobile apps and assistance with complex interactions.

In fact, the pandemic and increased digital banking adoption also drove up the volume of calls to the centers, with 76% of respondents to one study saying call center volume increased by more than 5%.

Department of Digital Rescue:

Contact center staffers need to become digital banking experts since many of their callers will be seeking support on how to use their digital banking tools.

Financial services leaders recognize this need, with 71% reporting that they implemented additional training on digital banking products to help handle calls. Another 42% are planning to invest in digital advocates who can become the leaders in promoting digital channels amongst those customers who visit a branch or call into a call center.

Read More: The Day of the Tech-Forward Community Bank Has Arrived

Steps to Embracing Digital-First Banking

Here are some key strategies financial services leaders can embrace to build a successful digital-first strategy:

Improve the omnichannel customer experience. Start thinking like a consumer, not a financial services executive. Consumers don’t see the branch, call center and digital channels as mutually exclusive. They want a seamless experience with a wide range of choices any time they interact with their financial services provider.

This demands that leaders smash data silos and improve technology integration and platforms both in person and digitally to deliver a consumer experience that truly attracts, engages and retains consumers.

Integrate digital inside the branch. The branch offers opportunities to integrate digital tools, such as video ATMs, interactive welcome screens, and other digital signage. This allows financial services leaders to connect a digital experience to an in-person visit without disruption. More digital services inside the branch can help improve digital adoption and free up staff to focus on more complex interactions.

Adopt a data-driven approach. Analytically focused organizations continuously review and adjust their offerings. Branch and contact center networks must use a data-driven methodology if they expect to stay agile enough to maintain and build market share.

The need for analytics is greater now than it ever has been. Financial services leaders need to leverage analytics to drive their organization’s strategic choices, and it must happen now. Otherwise, competitors further along the digital transformation will pull ahead for customer growth.

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