President and CEO, Consumer Bankers Association
Traditional business models heavy with brick-and-mortar strategies have suffered a blow as customers continue to shift their spending habits towards online stores. This change in behavior, however, comes as no surprise as giants like Amazon have experienced a steady rise in web traffic for years. While some retailers (i.e., Sears and Radio Shack) have been hurt by developments in the e-commerce world, the banking industry will stand the test of time — so long as the industry continues to understand where customers are best served.
Meeting the customer halfway
Technology has drastically changed how we conduct business, and we as customers not only desire mobility, but we expect it. In addition to wanting mobile capabilities, people still want human interaction for more involved issues that cannot be solved with a computer or a smart phone. Take for instance the need to set up a business account. A bank may offer multiple products and services depending on the type and size of your business. While you are able to research options on a bank’s website, you would be better served in a branch where a banker can help you navigate your financial choices, showing you how each product will impact your business. This is where the bank branch thrives.
But, in order to both maintain and attract new customers, traditional financial institutions must offer services in ways allowing people to bank when and where they want.
Creating an on-demand experience
This is why banks are transforming their branches to deliver financial products and services on demand. With financial technology start-ups beginning to emerge as a growing competitor, banks are focusing on growing areas of their business where customers are most engaged. Take for instance mobile application. People want convenience and to be able to access, transfer or manage their funds while on the go. Once we saw how popular and powerful the smartphone was, companies in every industry knew they needed to embrace a digital payments platform to keep up with the competition. Most banks now offer free mobile apps so customers can make transactions through their phone, such as depositing a check or transferring funds from one account to another.
Of course, strategies across the banking industry are and should be different and created on a bank-by-bank basis. It is clear, however, that adding a digital component to branch banking not only brings society into the 21st century, but it also allows banks to serve and meet the needs of many generations.
Catering to different age groups
Today, over 50 percent of the nation’s net household wealth is held by baby boomers, whereas only about 5 percent is owned by millennials, according to a Deloitte study. Baby boomers have not adopted technology to the degree Generation Xers or millennials have; therefore, the banking industry must leave no one group behind and invest in upgraded ATMs at the branch, enhanced websites that offer 24-hour live chat support, and training staff to be able to provide valuable and in-depth expertise at the branch. In the end, the focus remains on meeting customers where they are.
Until technology can provide for every customer need, branches will continue to be valued as an essential channel for serving customers in the digital era.