When Is A Branch Visit "Bad" For Business?
I recently read a global banking report from Bain & Company titled: “Customer Loyalty in Retail Banking”. The report included the following statement I found intriguing: “Customers increasingly view having to use branches and call centers as an inconvenience for many transactions. We estimate that 50% to 70% of call volumes at a typical bank are bad or avoidable.”
Wow! That is a powerful statement. Frankly, I found it hard to believe. So I decided to test it. I asked two credit union clients to examine their branch transactions over the past six months and determine what portion of those transactions could have been handled via online or mobile banking, without requiring a branch visit.
In both cases, the answer more than corroborated the Bain estimate, with both results landing between 70% and 80%. This was an eye opener for all of us involved in the research. However, we quickly realized this raw data told us only a small part of a much bigger story. We next needed to understand why members would opt to visit a branch when they could have executed the transaction from the comfort of their home, or anywhere for that matter.
The next level of research required deeper digging, but yielded extremely valuable information. We learned that some members had legitimate reasons to make a branch visit rather than using a digital channel; for example, members like to have instant access to deposited funds. But one credit union found that its policy of placing a hold on mobile deposits was actually discouraging use of the mobile channel. This and similar issues could be addressed via a change in the credit union’s policies.
Other members had concerns about security using the e-channels despite the fact both credit unions had implicit guarantees against loss due to digital channel fraud. Some were simply unfamiliar with how to use the e-channels. Others had tried early iterations of mobile deposit and found it to be unreliable, never to return to it. Each of these areas of member concern could be addressed via member education and in-branch training.
Finally we found that some members simply like to visit a branch. We saw nothing wrong with that, because omni-channel implies the member can choose to utilize the channel of their choice. What the credit union should do, though, is to ensure that its policies and member education make it as easy as possible for the member to opt for the convenience of the digital channels.
However, we also realized that as more and more members inevitably shift to the digital channels, it is really imperative for the credit union to utilize data, communication and state-of-the-art technology to sustain and deepen a truly customer-intimate relationship with the member despite a reduced frequency of in-person interactions. This is the real challenge of the digital era; fortunately role models exist (e.g. USAA) to prove that it can be accomplished.
In our view, every credit union should closely evaluate member behavior patterns to understand how best to serve members’ needs as the digital shift occurs. The data is readily available; it just requires some careful analysis.
I recently asked a credit union executive to identify his top competition. He thought for a minute and said: “Our real competition is convenience.” Truer words were never spoken.