There is something of a strange dichotomy when one looks at the types of things bank brands are developing, particularly around mobile and digital banking services, and the kinds of things consumers say they want. Banks’ investments are leaning heavily toward technology upgrades – especially those that make self-service digital banking easier for customers, as Karen Webster discussed in a recent conversation with Diebold Nixdorf Vice President of North America Solutions Heather Gibbins.
But, Webster noted, when one looks at the data that PYMNTS and others have gathered on the subject, consumers seem to say they want more physical, face-to-face interaction. According to the PYMNTS Digital Banking Tracker, 50 percent of consumers consider online banking “less legitimate” than doing business at a branch, and 63 percent report a preference for opening new checking accounts in person as opposed to using a mobile app or online interface.
The picture is complex, as the same survey shows that consumers like mobile, too: 60 percent of American smartphone users have at least one financial services app. Of those with mobile banking apps installed, 70 percent check those apps once per week. But even in that complex data set, it does seem clear that customers actually rather like the branch, especially for some functions, viewing it as an important factor in choosing a banking partner.
The dichotomy, Gibbins told Webster, is an outgrowth of the evolution of banking in the digital age – and the types of relationships and interactions that banks aim to build with customers. Because the truth is, from both the bank’s and the consumer’s perspective, it’s not an either/or issue: Customers don’t want face-to-face service, or digitally moderated self-service.
Quite the contrary, she said. It’s actually a both/and: Customers want digitally enabled, friction-free banking experiences, as well as the ability to tap into the bank as a trusted advisor and intermediary in their financial lives. It depends, Gibbins noted, on what the consumer is doing at the moment, and how well the banking institution is optimized and integrated into the consumer’s journey to deliver the right service at the right time.
Branches for Interactions Instead of Transactions
Before the era of online and mobile banking, the in-branch experience was largely transactional, Gibbins pointed out: withdrawing funds, depositing checks, checking balances – the old routine, errand-based side of banking. That is the stuff that FIs are working overtime to move online, into mobile and into a more self-service model. Because, she noted, that is what customers want: No one is happy to drive to a bank to deposit checks once they find out they can do it with a mobile phone.
“At the same time, customers are saying they want their financial institution to help them make informed decisions, set themselves up for the future and think about planning, so they can manage their finances in a better way,” Gibbins explained, noting that they are starting to look beyond the bank’s ability to simply hold their money and keep it safe, extending to their capacity as a trusted advisor.
And individual consumers aren’t the only group looking to upgrade interactions with their banks beyond general transactions. Financial institutions, Gibbins noted, are spending more time recruiting, developing and catering to small business customers, offering not just banking services, but also access to meeting spaces and after-hours events geared toward their specific needs.
Instead of using physical spaces to replicate transactional services that can be completed online more easily and quickly, Gibbins said, banks of all sizes and scales are now figuring out how to construct their “branch of the future” to best serve the needs of their client bases and differentiate themselves.
“Branches are becoming inviting spaces that are developing to make community members come in and feel welcome,” she said. “That can mean after-hours events, or coffee shops, or even things like viewing parties for local sporting events – they are all built around strengthening that relationship.”
Technology is important when it comes to enabling those experiences, but the shift of in-person banking from transactional to interactive, Gibbins said, will be an evolutionary project for the human beings on both sides of the teller window.
The tellers are evolving sellers, she noted, guiding consumers at the window to either the mobile and ATM service products that will take the friction out of their transactions, or toward other products and offerings they might want or need. That will mean training tellers differently, and thinking of them more as concierges who are there to guide the consumer through the process in the best possible journey.
For the consumer, it is about educating them about their options and helping them change their habits. Today’s consumers, said Gibbins, feel a strong sense of trust in the face-to-face interaction – but as we’ve already seen in the retail environment, that sort of trust is portable. People trust Amazon at a very high level, despite the fact that the vast majority have never had a “face-to-face” interaction with the eCommerce company.
“What consumers want to trust is that a journey will proceed smoothly from end to end, no matter where they start it, stop it or pick it up in the middle,” Gibbins noted. From there, they will drift toward using the self-service functions that best suit their needs, or toward the full-service interactions with trusted advisors and community-based benefits that the branch experience offers.
The key for banks, Gibbins said, is having the technology in place, and in the right hands, to live up to that consumer expectation.
Enabling the Better Journey
An ATM that is working well will provide the appropriate amount of money after the correct PIN is entered. But an ATM that is working smart can do more: It can remind a customer who is about to make a large cash withdrawal that they have a bill payment coming out in the next 72 hours, and that the money they are about to take out will leave them with insufficient funds, for example.
The consumer can still take out the money, as they might know something the system doesn’t, or might have an immediate need. But the better-integrated system can take what it already “knows” about the customer’s online banking routines and apply it to help them across the sum of their banking experiences.
The same practice can apply inside a branch, Gibbins noted, in the form of providing bank workers with a tablet that displays information about the customer, beyond the specific service they are offering.
But using data more widely and across channels, she said, creates unique challenges for the industry, particularly around security. Study after study shows that consumers trust their banks and banking institutions at the highest level, which means it is always incumbent on those banks to “be at the forefront of data security measures.”
“That can be the ATM, or through digital, and how those all play together,” Gibbins said.
It’s not the flashiest stuff in the world, she admitted, and security measures aren’t always the most visible to consumers – but anything that weakens trust and makes consumers actively worried that their banks aren’t the pillars they thought they were will do more long-term damage to the brand than it can possibly be worth.
And for banks, Gibbins noted, that trust-based relationship will allow them to innovate down the line as they continue negotiating the construction of a single, connected commerce banking platform that consumers can seamlessly navigate through a variety of on-ramps and off-ramps, depending on their specific needs.
That transition won’t be instant, like flipping a switch: At Diebold Nixdorf, Gibbins noted, they often tell their banking partners that if they conceive this as only a technological upgrade without considering the wider changes and how they will shape customer habits, they are unlikely to be successful. As consumers’ needs are changing, they don’t want to have to figure out multiple channels and platforms.
“I think you are going to see that digitization will collapse the need for multiple platforms on multiple channels … making for a better customer experience and a more cost-effective, efficient experience for banks,” Gibbins predicted.