Jim S Miller

Thoughts on the Client Experience and Banking

Despite Visiting Branches Less Often, Customers Still Care About Branches

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According to Novantas research, customer preferences, attitudes, and behaviors continue to shift away from branches into remote channels. The survey shows that customers have continued to move away from the branch as their primary channel for core service transactions (see figure 2) and are becoming more self-service oriented. Novantas expects this trend to continue as branch transactions have been declining by 4-5% annually over the last three years.

Source: Novantas U.S. Multi-Channel Customer Research 2012

While customers are moving to self-service channels, they continue to place significant value on physical branches.  According to Novantas, “It is clear that many customers are still very attached to branches, even as they become less dependent on them.” There are still many situations where the branch is the preferred option for interacting with the bank. “Having a branch near where I live” is still the top reason for choosing a new bank and 87 percent of customers claim the branch was an important factor.

 

Forty-seven percent of customers believe that a bank is not legitimate unless it has branches (up from 41 percent in 2011). Among survey respondents who chose “a well-respected brand” as a top reason for selecting a bank, 71 percent said they would never us a bank that did not have a physical branch.

The Novantas research shows that branches continue to be the preferred channel for opening new accounts. For establishing a new banking relationship, 71 percent of customers prefer to use the branch, while 53 percent of customers opening an additional account at their bank prefer to do so in a branch.

Source: Novantas U.S. Multi-Channel Customer Research 2012

 

Novantas sees three distinctive customer segments emerging today: Branch Traditionalists, who mainly use branches, the Ultra-Connected, who make high usage of all channels, including the branch, online, mobile phone and call center, and the Virtually Domiciled, which is a group of customers who use branches infrequently and primarily use remote channels to interact with the bank. Branch Traditionalists (25-40% of the population) visit the branch 3.0 times per month and the Ultra-Connected (30-45% of the population) visit a branch on average 3.6 times per month. The Virtually Domiciled (25-35% of the population) visit the branch about 0.2 times per month.

 

Even though the Virtually Domiciled make infrequent use of the branch, 78 percent claim that branches near home are a top reason for selecting a bank. For this group, this is second only to user-friendly online banking, which is a top reason for 86 percent of the Virtually Domiciled. For all other customers, 92 percent selected branches near home as a top reason for selecting a bank, followed by a well-respected brand and user-friendly online banking, both at 81 percent.

 

The challenge for banks is to balance the desire of customers to make heavy use of self-service channels with their desire to have convenient branches for higher value transactions or for when self-service does not meet their needs. As the number of branch transactions decline, each in-person interaction becomes more influential in fostering customer loyalty. Banks need to make sure they continue to deliver an outstanding customer experience in their branches while improving their self service capabilities.

 

The full Novantas report can be found at: http://www.novantas.com/articlepdf/multi-channel_survey_FINAL_email.pdf

 

 

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Written by Jim S Miller

April 11, 2012 at 7:06 pm

Posted in Uncategorized

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