Does the local bank branch matter anymore?
It’s a good question, and one that is often asked these days. The rise in online and mobile banking has not only changed how Americans bank, it has eliminated the need to visit a bank branch often. Now, instead of nipping in on their lunch hour, customers can access their accounts, transfer money or pay a bill anytime and from anywhere, just by using an app on their smart phone.
As a result, far more people are visiting their bank far less often. Research shows 43% of customers visited a bank branch at least once a month, down from 67% in 2010. And 40% of customers have not visited a bank branch in the last six months.
This lack of personal contact has implications for banking executives. Sure, technology helps banks cut costs, allowing them to close branches and employ fewer people, boosting profits. Modern data analytics can predict which products might fit best with which customer. But ask yourself: How are you going to know what customers think? How do you build or deepen your relationship with them. And, since analytics and measurement are so important, how do you know whether you’re succeeding at building a strong connection?
You don’t want to miss your best chance to build a loyal, and increasingly profitable, customer base that will ensure future growth.
It is not a mistake that banks can afford to make.
Granted, everyone knows developing powerful online and mobile banking presence is essential for success, especially as you move down the generational food chain. The all-important Millennials look for a strong online and mobile experience, as well as competitive rates, when choosing a bank. And these are the growth customers banks want to attract. Though Baby Boomers have more assets, they aren’t the ones who will be seeking new business loans and buying vacation homes.
But younger customers are less likely to stick with a bank than their parents. Data from Informa Research Service’s SEA Score, which measures member and customer engagement, show that those over 55 years of age are 37% more likely than Millennials to be loyal to their financial institutions. And the vast majority of bank customers – 79% according to Accenture Research – view their banking relationship as transactional, not advice-based, which makes it far easier to cut ties or turn to a rival institution for car loans, retirement savings accounts and other products.
To deepen those customer relationships and become a trusted financial partner requires connection points. So when a customer walks into a branch with a specific task, banks have an opportunity to offer other value added services, while at the same time increasing customer satisfaction.
It’s important for banks to be prepared. Employees must be trained to recognize these opportunities and coached to offer the appropriate products and services. And your analytics have to keep pace with the different kinds of customers you want to reach. Many flat analytics, like a promoter score, give equal weight to customers, regardless of how they bank. Understanding the complexity of customers is key when deciding what data to collect and what strategies you follow.
It’s worth the effort. Informa’s SEA Score survey shows that banking customers who feel like valued customers/that they are valued are more likely to keep and grow their relationship with the bank.
For more information on Informa Research Services' customer engagement and loyalty research and The SEA Score™ program, contact us at 800.848.0218 or email firstname.lastname@example.org.