Awards Blog

Finance On The Go

by Virginia Monk on 17th December 2016.

-REPUBLISHED FROM THE CXM MAGAZINE-

On a later than usual train journey from work, my phone reminded me that I had set a task to pay my credit card bill. The monthly reminder was set for the time I am usually home, but at least this gave me the opportunity to put my mobile banking app through its ‘transact on the move’ paces.

With a few short taps, my bank had passed the test of enabling me to move money on the move, a feat which would have been treated as witchcraft a few years ago.

Suitably impressed, I began pondering how the world had changed with the advent of ‘smarter’ phones and improved mobile internet coverage. I continued to wonder about the endless possibilities with access to the internet soon reaching a point when it is available ‘anywhere anytime’. And what are the implications for this radical shift in technology for good old-fashioned customer relationships? Will I ever speak face to face with anyone at my bank again, and does it matter?

The rise of digital

Online banking has only been around for little over a decade and is now used by 7m Brits daily, for transactions worth £1bn.

The proliferation of smartphones and tablets has vastly improved the ease and speed of accessing a ‘virtual’ bank branch. This has forced banks to rethink channel strategies for the future, with some reports suggesting that the ‘physical’ branch footfall is down 30%.

Opportunists see this as an opportunity to make inroads into the banking industry, and it comes as no surprise to hear that technology businesses such as Facebook are considering ventures. Then there are those such as Atom who believe the future is a digital-only bank.

Myth busting – will the branch survive?

Our experience at Network Research of managing a number of large scale branch measurement satisfaction programmes for leading UK high-street banks allows us to bust some myths around this issue.

One such myth is that branches are increasingly used by older (over 65s) customers because this group is slower in adopting new technology. However, the data from one such research programme we conduct suggests that a sizeable majority of branch visitors are under-60s, with an average age of 50 (an age when asset holdings are conducive to the traditional model).

The same study shows the average age of branch visitors taking out new products (current accounts, savings, investments or mortgages) is as low as 35, highlighting the importance of the channel’s sales and advisory role.

Another recent study looking at current account churn suggests that more than three-quarters of switchers went into a branch to migrate their main banking relationship – with even the savviest of switchers researching online but preferring to make the move face to face in-branch.

Play together nicely!

Put simply, in an increasingly digitised world, branches retain their role in maintaining customers’ trust with the bank through that all important face to face relationship and good old fashioned customer experience… Or, as some would say ‘seeing is believing!’

The recent market gate-crashers would argue that the relationship between most customers and their bank is at best “functional”, and that their disruptive digital-only business model is therefore a good fit.

It is our view that traditional banks would be grossly underselling their efforts if they were to completely discount the strength of existing relationships. However, while the volumes of money involved make this a more serious prospect than most retail interactions, it’s fair to say that more could be done to ‘love in’ the customer.

While rebuilding the balance sheets (in economic and trust terms) has been the recent focus of the industry, technology cannot take a back seat if high-street banks want to thrive in these ‘information times’.

So where does this leave the humble branch?

The future…

Views on what the future of bricks-and-mortar banking may look like are numerous – from self-service pods, video assisted branches, through to meeting lounges. What remains clear throughout is that branches will need to work in harmony with digital channels to ensure consistent customer experience.

For us, now more than ever, it is important for the banks to clearly understand the consumers, communities and catchments they aim to serve. Reverting to the old-fashioned footfall yardstick to decide branch prioritisation simply plays into the hands of new-coming disruptors.

We think that value added by existing branch networks should not be underestimated. However, to safeguard their interests, the major players in the industry must consider repurposing and redesigning branches, based on customers’ needs and in order to deliver the experience customers have come to expect. The days of one-size-fits-all banking and the “typical customer” have long passed, but it is clear that high-street branches are here to stay.

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OUR CONTRIBUTOR

Virginia Monk  – Managing Director at Network Research

Overseeing the growth of Network Research and shaping its future direction and strategy.  A highly experienced researcher with over 30 years expertise working closely with clients to solve business problems and drive more profitable relationships with their customers.  MRS Full member, a member of the BIG Forum committee and the International Journal of Market Research editorial advisory board.

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