Boston-based research firm Yooseless Research revealed the results of an important new study looking at consumers’ bank channel preferences. According to Distinguished Principal Analyst Phuquing Yooseless:
We asked consumers about their bank channel preferences, and their response was unanimous: “What the hell is a banking channel? We thought channels were something on TV.”
When we explained what bank channels were, consumers were again unanimous in their response: “Aha! Got it. We’d prefer to not have to use any bank channels. We’d prefer for there to be no problems to be resolved, we’d prefer to be hoodie-wearing bazillionaires who don’t worry about what their account balance is, and we’d prefer to have our money transfer itself between accounts. No, wait — we’d prefer to not have to keep separate accounts to move money between in the first place.”
My take: This endless stream of research that purports to show how consumers’ banking channel preferences cause banks to miss opportunities to “better engage with consumers online and create a consistent brand experience across all channels” has got to end.
The latest study shows that two of the four most popular reasons why consumers use the online channel for banking is checking their account balance and transferring money between accounts. Do you really think there’s an opportunity to create a “consistent brand experience across all channels” to do those things?
And so what if banks do create a “consistent brand experience across all channels”? Do you think bank customers will be lulled into forgetting the other issues and problems with their that they face?
One of the amazing things about being human is that we adapt. Adapting to an “inconsistent brand experience across channels” is one of the easier things that we adapt to.
Here’s something that Kristen Christian, the founder of last year’s Bank Transfer Day, did not say:
“We can’t let banks get away with an inconsistent brand experience across channels. We need to rise up and move our money to credit unions.”
Looking at the results of a survey of US consumers regarding their financial lives, here’s what I can tell you: Of people who switched their primary bank last year, maybe 2 out of 1,000 said that it was because of a poor cross-channel experience, and as best as I can tell, those two people were Phuquing Yooseless and his brother Totalee.
At the top of the list of why people switched: Fees, followed closely by fees, and in third place, fees.
The other side of this channel preference nonsense is the conclusion that many people come to regarding channel investments. Their logic goes something like this: If 50% of people prefer the online channel, and only 20% prefer branches, then we should be putting 50% of our investment into the online channel.
Sadly, this is not only faulty logic, but it’s a reflection of the dysfunctional organizational structure found in so many financial institutions. Not that there’s any easy fix to the problem. But organizing by channel will lead the people that work in that department to find any argument they can to protect and grow their budgets.
If, however, the focus was on “fixing problems” or “redesigning” processes and interactions, then maybe funds would flow to the places where they’re really needed.
But you’re not going to effectively prioritize those investment alternatives by asking consumers about their channel preferences.