The Power of Face to Face Interaction:
The Retail Banking Experience
Posted by YourLoanAdviser Staff
As lenders and community leaders, the fact that banks have a physical presence in their communities is a big deal. No matter that futurists may be right about the eventual shift of in-branch retail banking to digital with the next generation of customers, as of now the data show that your customers find most satisfaction from branch interactions. A recent J.D. Power Retail Banking Satisfaction Study shared on their Banking Blog discusses this topic in detail, and we found it very compelling and wanted to share it with you.
Data from the 2015 J.D. Power Retail Banking Satisfaction Study (released last week) finds that acceptance of digital channel functionality continues to grow, particularly within certain demographic segments (such as Gen Y and Gen Z). However, data also finds plenty of evidence to support the hypothesis that ‘branches still matter’.
For starters, despite some declines in recent years, branch usage continues to be high. Over 3/4ths (78%) of retail banking customers have visited a branch in the past year, and these customers have visited a branch approximately 15 times in the past year.
Branches also remain a key channel for customers seeking to conduct a ‘moment-of-truth’ transaction such as opening an account or resolving a problem. Additionally, of the six interaction channels measured, the branch is statistically proven to carry the greatest ‘weight’ on overall satisfaction. This is particularly noteworthy when considering that customers only visit a branch approximately 15 times per year, compared to approximately 67 website visits per year. In other words, a typical branch interaction is considerably more impactful than a typical website interaction. In response to this, it is critical for banks to make sure that each branch transaction is an especially satisfying experience for the customer.
Retail POS engagement is the foundation of a bank’s customer experience. Without it, the J.D. Power survey makes the point, banks can’t build the type of brand loyalty that leads to future cross- and up-sell opportunities. When consumers engage a brand online or via the phone, they are typically transactional oriented – wanting to complete the specified transaction they have in as short a period of time as possible and move on to their next task.
True face-to-face engagement provides banks an opportunity to offer other value-added services beyond completing a customer’s specific account task during a branch visit, while at the same time increasing customer satisfaction. It’s important for banks to prepare employees to recognize these opportunities and coach them to offer the appropriate products and services.
The survey goes on to discuss the key questions that banks should be asking themselves. The considerations for balancing bank-virtual interactions include:
- Are you consistently (and effectively!) tracking and monitoring employee performance on in-branch transactions?
- Are you utilizing tracking metrics to reward employees for good performance and/or identifying certain branches or markets with the greatest room for improvement?
- Are you investing in ongoing training/coaching/mentoring that will educate employees on products and services and improve their ability to strategically identify opportunities to offer ‘value-add’ services?
- Are you hiring employees to fit the ‘value proposition’ you advertise/promote?
Everyone knows that developing powerful online channels is essential to success, especially as you move down the generational food-chain. But as Jim Miller, senior director of banking at J.D. Powers says:
It is not surprising that Gen Z is satisfied with website and mobile at big banks, but they are also satisfied with the in-person experience at big banks. There is a common misconception that younger customers aren’t using the branch, but they use it about the same as Gen X and Y. Midsize and regional banks risk losing the [Millenial and] Gen Z customers to big banks if they can’t meet their needs regarding digital and in-person interactions. There needs to be a seamless experience across all channels. The first step for retail banks is to understand what is important to Gen Z and what drives their satisfaction and loyalty.
We couldn’t agree more.