As digitization in financial services increases, it is no surprise that branch location numbers continue to decline. Forecasts predict that the number of U.S. bank branches could shrink by a third within the decade.1 Likewise, credit union branches have been decreasing since 2012, with a total loss of 1,656 credit union branches.2
Despite their declining numbers, consumers still find value in branches. In fact, nearly half of Americans (45%) visited a bank branch for personal business within the past 30 days. That loyalty to branches also cuts across demographic lines,3 considering 62% of Millennials still use and value branches (although they may not visit them as frequently).4
Yet branch performance is trending in the wrong direction. Lobby wait times have risen steadily since 2011 in many branches. On average, the time that customers wait for initial contact with a service representative after signing in the queue management system has increased from 4 minutes 46 seconds to 7 minutes 6 seconds over four years.5
What can banks do to enhance the customer/member branch experience while also driving down costs and increasing efficiency? Especially when tech-savvy consumers are expecting a top-notch omnichannel experience?
Banking executives are taking action to transform the physical bank experience. According to a recent survey, their primary priorities include deploying digitally enabled self-service capabilities for teller transactions (37%) and account opening and maintenance (35%). Banking executives are also looking to invest in branch technology to increase operational efficiencies and redefine banker roles.6
Getting data into the right hands
Financial services executives also realize the value of data for increasing revenue. More than four in five (83%) agree that fully leveraging financial and customer data into analytical insights would represent an increase of at least 5% in their annual revenue. But less than one out of five companies allows access to information and data consistently across all departments or teams, including customer-facing employees who would benefit from having the information to better serve customers.7
Cross-sell systems and training
Customer relationship management systems can supply frontline staff with the data they need about customers and suggest “next best products” to recommend. When the data and technology are enhanced with needs-based training, it encourages sales and service staff to uncover sales opportunities by asking the right questions at the right time.5 Given that an average of 52% of customer encounters in 2015 involved services, with 48% focusing on products, there is convincing reason to devote time and effort to cross-selling.5
Alex Jimenez, a digital banking and payments strategist, gives wise counsel: “Bankers need to ask themselves, ‘Do we know how consumers prefer to use our branches?’ Once that question is answered, it’s time to think about how digital technology can improve those processes.”8 Then start taking action. Your customers and members are expecting it.
2cujournal.com, “As Branches Shrink, More Strategic Brick-and-Mortar Approach Needed,” June 2016
3bankrate.com, “Branch Banking Still Popular with Americans,” December 2015
4thefinancialbrand.com, “Banking Distribution Dilemma: How to Spend $2 Million,” March 2016
5bai.org, “Nine Tips for Improving Branch Lobby Performance,” May 2016
6kpmg.com, Helsinki, Finland, “The Need for Speed,” 2016
7qlik.com, Financial Services Executives Agree: Self-Service Access to Data Increases Revenue, Customer Satisfaction
8thefinancialbrand.com, “Building the ‘Branch of the Future’ — More Than Technology,” January 2016
9vidyo.com, Video Banking Reaches Inflection Point, Research Shows Over 80 Percent of Banks Support and Plan to Deploy Video-Enabled Services, April 2016
This article first appeared in the Fall 2016 issue of FINTALK Report.