As Bank Branches Go Digital, How Do They Attract Customers?

As foot traffic returns to branches, banks need to reevaluate how digital channels and physical locations intersect to build a great customer experience.

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?

Digital Banks Had a Head Start: Traditional Banks Can Catch Up

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.

The New In-Branch Experience

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. 

Tom

Sandeep

Sandeep: Tell me a bit about the early part of your career.

Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.

Sandeep: What is something you learned during this time that helped you with consulting?

Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.

Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.

Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.

Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an acquisition...consulting skills definitely translate into the corporate environment.

Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.

Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?

Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.

Sandeep: What has stayed the same?

Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not change...it's what I love about consulting.

Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?

Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.

Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?

Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.

Sandeep: Tell us about a business hero of yours that I may not have heard of before.

Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact

Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?

Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.

Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?

Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.

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