While headlines focused on how retailers would adapt during the 2020 pandemic, banks were quietly rolling out mobile apps, AI chatbots, videoconferencing and various digital products to connect with customers when branches were closed. But with the gradual return of in-person commerce, banks are having to reconsider the role physical branches play in a world of digitized customer experiences.
Though eighty-five percent of Americans say they will continue to use digital tools to bank after the pandemic, 62% of banking customers still prefer physical branches. How can banks distribute their customer experience so that they are connecting with people in the right moments, in their preferred channel? Up against competition from digital-native neobanks and fintechs, how can traditional banks play to their traditional strengths without losing a step?
Built on online banking foundations, digital and challenger banks had a leg up in a socially-distanced financial environment. Traditional banks, however, bring their own unique strengths to the table. Leveraging brand trust, technology, and physical branches together often results in innovative and attractive offerings.
Consider BofA’s AI chatbot, Erica. The bot initially helped customers perform simple tasks via text or mobile app, such as checking balances, paying bills, and accessing credit report updates. But Erica’s abilities expanded over time. The chatbot now acts as an advanced virtual assistant, using customer data to make personalized recommendations and offer advice. Erica even schedules in-branch appointments for more complex or high-value queries.
Increasingly, this kind of personalized financial service will become a cornerstone of bank branches.
”Branches are still important,” U.S. Bank CEO Andy Cecere insists, “but they’re going to be less of a place where people go for transactions and more for advice and consultation.”
Perhaps Capital One saw this coming when it began opening its cafés. Capital One’s Cafés are reimagined bank branches that opened to customers and non-customers alike in 2016. They provide coffee, workspaces, free Wi-Fi, and charging stations in addition to ATMs, “bank ambassadors”, and credit card applications. They also offer free one-on-one money coaching and workshops on topics like building savings, checking credit reports, or making a budget.
Without branches or cafés, online-only banks miss out on valuable, trust-building facetime with customers who may want financial advice or consultation. However, to fully leverage physical branches, banks need to supplement them with customer-data-driven systems and processes to provide personalized experiences.
Using AI, banks can now target customer segments more precisely than ever before. Have customers who are paying off debt? Send them a personalized email about an in-branch workshop on debt repayment. Perhaps include an estimate for how soon they can pay it off based on their current income and spending.
Can education and consultations really keep traditional banks competitive? If we take another look at retail, Best Buy certainly paints a hopeful picture. In a bid to differentiate from Amazon, the electronics vendor introduced an advisor program in 2016 for free in-home consultations. By focusing on long-term relationships rather than sales, Best Buy built trust and loyalty that keeps the company healthy today.
Branches are no longer the only place banking happens; they’re just one more channel through which customers interact with their bank. With phone, web, and mobile experiences properly unified, physical branches become one more helpful interface.
To create a seamless experience from various overlapping channels, banks should take a service-design approach, focusing on the tasks a customer is trying to accomplish and highlighting the channel that best helps them get things done.
Check back in with Kunai for more on mapping to the evolving customer journey and how banks can design connected, multi-channel experiences.