Expert: Sue Lewis, Savanta. Facilitator: Kathy Ellison, Savanta
Savanta Research Findings:
- The government reports that between 2012 and 2020 the total number of bank and building society branches in the UK fell by 28%
- Channel usage has shifted from the branch towards digital, but still 1 in 2 small businesses & 1 in 4 consumers have used a branch counter service in the past 12 months
- Channel usage expectations have changed, but not for all, 3 in 10 small businesses & consumers expect to use the branch less post pandemic. 1 in 4 small businesses and 4 in 10 consumers expect to use digital more often than pre-pandemic and the move to more digital channels is stronger among younger business owners and consumers. However, the majority expect no change
- 1 in 4 small businesses and 4 in 10 consumers expect to use digital more often than pre-pandemic and the move to more digital channels is stronger among younger business owners and consumers
- Consumers will still use banks as a place for handling cash in future as well as face to face service & sales – with different needs for different generations
- Digital offers a better quality of service. More small businesses & consumers are satisfied with digital service than branch service, especially mobile apps
- Not all are ready for a digital-only bank. Despite the shift to digital, the majority of businesses would not consider a digital-only bank, though half of all consumers will, with younger ones leading the way
- Choosing the right outlets to partner with will be key. Amongst consumers, a post office is by far the most acceptable alternative to branch. Nearly half think supermarkets are a good idea. Younger consumers are more open to all options than their older counterparts
Q: New technology and offering banking services through other businesses such as shops will be at the core of the industry in future. Do you agree? What is your current strategy? Are you looking for a long-term partner?
R: Some alternative locations are better than others, but most have drawbacks over own branch
- Post offices. A question as to their longevity; are post offices shutting down?
- Supermarket. Many have their own banks and so may not want to work with competitor providers
- Collaborative branches. A possible solution and being trialled at the moment
- Mobile van. Currently working well for those in rural isolation
- Door to door service. Felt unlikely to be a successful option because of security concerns and cost model (very expensive way to process transactions). Also, some concern that it could lead to poor behaviors, door to door sales
- Drive through branch. Perhaps a solution for quick transactions
Q: How do you create a customer-centric inspired journey both in branch and via digital platforms to give an all-round sense of care to ensure brand loyalty?
R: Some services are not suitable for digital servicing and no one model fits all
- There can be regulatory/technical issues with recording advice
- And security issues around privacy e.g. who is in the background, who is making the decisions and the possibility of coercion etc
- A digital only offering is limited for businesses with a need to pay in cash/cheques, more complex requests and need for relationship/ support in hard times
Building society customers report they want to use branches and have higher satisfaction with the branch than traditional banks
- Building society research surveys show customers want branches and people contact. As mutuals there is a requirement to meet member preference/need
- Building society customer satisfaction is higher through branches. Considered that banks are often forcing customers to the branch when there is a problem – hence a different circumstance and a different emotional response
A Branch offering can help build customer satisfaction and loyalty
- There is a halo effect when other branches close around a provider. Being seen as the community bank increases brand awareness and loyalty as well as new customer/transaction flow
- Maybe contact builds loyalty and other experiences in the branch are now more important in building brand loyalty.
- But a question as to how important to providers is customer satisfaction of using the branch vs number of transactions put through.
But the need for using a branch is changing – used more for advice and community engagement – and it must offer something different to digital
- Branch transactions are decreasing and so the question is, how important is it to have the branch? What else do customers use the branch for and what else can be done with these environments?
- Anything offered at the branch needs to be a different experience than online as there is little point in a customer visiting to be directed to an online device.
- Other than paying in cash, the branch tends to be used for advice and so private rooms are needed and staff able to help.
- For example, first time buyers can’t afford a house solus, so loan application is generational and more complicated, a branch network is considered realy useful to deliver this family-based advice
- Branch opening hours might need to widen, but they don’t need to be excessive. It is thought that opening outside of traditional working hours is required, but when very late opening was trialled usage was low; rather customers tended to visit on their way to and from work.
- Covid has helped some providers as community spirit has rallied and local has become more important. Could the branch be used to better benefit the communities around them e.g.
- Networking events
- First time buyer workshops
- Room/desk booking for businesses and community groups
Whilst this may build brand awareness and consideration, how then would providers turn visitors to customers?
For charities and clubs (and businesses), paying in cash is a requirement as Charities, Associations and Clubs start-up again they will need the ability to pay in
Q: What about your in-branch workforce, can you reduce resources without compromising on quality?
R: Branch staff need to add value by providing advice so companies need investment in upskilling and training
- Staff need to be adding value on top of digital channels, mobile and online.
- Customers need the branch for complex actives and problem solving. This requires a certain calibre of staff.
- Staff need to have people skills to be able to deliver advice and this could be an up-skilling process for many.
- Giving ‘advice’ is now very regulated and because of this branch staff have a fear of giving advice
- Currently there is an attitude that a branch career is a first step to a head office career, but it needs to be considered as a quality career in its own right.
Q: Are you cutting back on your branch network without compromising on the branch format to leverage the benefits of traditional?
R: Building societies believe in the branch as potential differentiator
- The question is, with a free banking model how do providers get full value for the branch?
- Keeping branches open is expensive and the debate has to consider the financials involved
- The branch is viewed as a cost by the big banks who are focusing on cost cutting. However, smaller providers consider the branch offer as an investment and maybe this will gain them an advantage in the long run