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An explosion of online and mobile capabilities has irrevocably changed how customers interact with their banks. Once the province of customer lunch breaks, banking is now a function of smartphones, and an everincreasing number of bank customers are visiting local branches less and less often.

 

It has given rise to a bit of a paradox.

 

Retail bank customers that routinely do business at the local branch -- the banking industry’s most visible customers -- are a poor benchmark for broader customer opinion.

 

That disconnect is only getting wider.

 

Once upon a time, bank customers had a face-to-face relationship with their financial institutions. The erosion of that relationship began with the arrival of ATMs and intensified as the global banking scandal shook consumer confidence, and the tech-savvy Millennial generation surpassed Baby Boomers as the largest segment of the U.S. population.

 

In 2010, 67% of bank customers visited their local branch at least once a month. Today, that figure sits at 43%. About 1 in 4 bank or credit union users have not been inside a branch even once in the past year.

 

Granted, the shift towards mobile and online banking isn’t all bad. This new breed of bank customer, whether they’re using a smart phone app or a bank’s website to move around cash and pay bills, is cheaper for financial institutions to service. Also, their financial habits -- how and where they spend their money -- are
easier to track.

 

But wider use of mobile and online technology means more customers are becoming increasingly disconnected from their banks, especially younger customers. Informa Research Services’ SEA Score survey shows that consumers think only half the banks and credit unions they currently use are relevant to their lives. That makes them easier to lose to a rival.

 

Don’t be fooled by rising customer satisfaction and loyalty scores. Many loyalty programs were designed with the laudable goal of managing the contact a bank’s staff has with customers. Some people enjoy their banker relationships and love visiting the local branch, which has pushed up in-branch ratings. But with 85% of all transactions now digital in nature, most satisfaction research doesn’t touch the majority of customers.

 

That’s not to say that a smile from teller can’t make someone’s day. Bank staff at a local branch need to be prepared to deepen that relationship, taking advantage of the moment when a customer walks into a branch with a specific task.

 

But a smile won’t win over online customers—nor get you any closer to understanding what drives those customers to make decisions, namely doing more business with your 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 info@informars.com.

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