Popular and financial press are buzzing with stories of great shift to digital in all arenas of life. For financial services, the stories will have you believe that physical spaces like bank branches are dead and mobile apps are in. Future is where everyone performs all transactions by app and never needs to meet anyone in person.
Mobile banking is fine until something goes wrong. When an ATM card doesn’t arrive, bank account is accidentally closed or deposited money is not available in the checking account, app would not be able to solve it.
Moreover, some people, especially demographic groups where English is not the first language or older people with hearing or touch issues prefer to explain their most complex problems in person. Phone maneuvers like swiping, which are easy for younger people are obstacle course for older people without finger dexterity or dry fingers that touch screens don’t recognize. As of 2019, only 8.3% of 65 years or older people were using mobile banking as their primary method to access services.
I saw the difficulties unfolding in real time with my parents. Recently my mom received a new ATM card in mail. This time the only option was to set a PIN using the IVR, no initial PIN was sent. She tried to use the IVR (interactive voice response), but at the end of the automated call the bank routed her to a live person. My mom is not a fluent English speaker, so my dad tried to help. As a result, after verifying both the identities on the account, the agent did something which added the new PIN to my dad’s existing ATM card. My mom’s card stayed inactive. After few more sagas like this, they both went to the local branch where the branch employee sorted this out by issuing a PIN to be sent to their address on file.
People like my parents and many other depend on face-to-face interactions when things really need to be fixed. There are several news stories about people’s inability to get help from Facebook when their account is hacked. Amazon, for all of its use of artificial intelligence, has made mistakes in processing returns when I entered my refund request on Amazon app. In each case, the third-party seller had to contact me personally via email to correct Amazon’s automated mistake.
Financial Institutions (FIs) often think about branches and other physical locations in financial services as an either-or proposition. Should there be a fully staffed branch at a specific location or nothing at all? Physical locations are evaluated mostly as a source of revenue growth.
For many FIs with both physical and digital touch points, the two options are viewed as separate channels, often internally competing for resources. Data capture is frequently not sophisticated enough to understand the customer’s journey across multiple touch points. So, the final touch point often gets the credit for a new account opening or the expense of a customer complaint. For example, if mobile app is not updated in a timely fashion and the customer talks to a live agent, is this an expense for the digital channel or the call center?
Truth is that customers don’t care. They want omni channel experience. They want their service agents to see what they are seeing on the screen. They want to ask their branch contact questions, come home and open the account when they have time later. It is up to the FI to figure out how to assign the revenue to the right touch point. FIs should re-evaluate the entire strategy of physical presence based on data driven analytics to understand how services are consumed across touchpoints.
We should reimagine bank branches and other store fronts for financial services as a service center for the most complex transactions. Instead of just ATMs, these locations can be repositioned with digital kiosks with sophisticated self-service options augmented by staff as needed.
Chances are that only certain time periods and certain services are needed in specific locations. Cost can be optimized by designing the physical location as enhanced service center with focus on self-service tools with optional personal help like grocery store self-checkout line. This would reduce the amount of space and number of staff at a location. Alternately, only limited time in person service could be available in most physical locations. Remainder of the time in person service can be offered at the digital service kiosk via video call with staff from a centralized location.
Opening a simple account? Do it online. No computer at home? Use the self-service digital kiosk with touch screens and if necessary, get help to complete the application. Have a service issue? There is the same digital kiosk with a phone which can be programmed to provide both readable and spoken answers.
Reality is that certain types of customers need more high touch service than others. Certain demographic groups may need help from service agents for simple questions but I would expect a great majority of service questions at a physical location will be for situations that cannot be fixed online, or need urgent escalation. The reimagined physical spaces with digital service kiosks would be perfect for providing multiple language options. It is amazing that my voting ballot comes in many more languages than my banking service.
Covid-19 era has proved that people are comfortable in video engagements for even something as complex as mortgage application. Physical locations can be great place for customers to ask question and get explanation beyond what a web page can provide. They may choose to then go home or to the digital kiosk at the same location to complete their transaction on their own. This omni channel preference is already visible in how people shop, which is why Apple and Microsoft opened physical stores for digital products.
There is still need for in person service for some financial services. Trick is to find a way to serve the customers in person for selected, complex services that require handholding and transition the rest to intuitive, user friendly, digital touch points. FIs that get the formula right will have higher retention and customer satisfaction.