What will the branch of the future look like? We live in a world enabled by technology like never before. (By the time you get done reading this paragraph, Google will log approximately 1 million searches.) Life moves fast. And consumers’ expectations move even faster.
Today’s consumers seek the same speed, ease and convenience from financial services that they do in every other aspect of their lives. No longer will they wait in long lines or take days to receive a new debit card. They want immediate service and an intuitive process resembling how they would order coffee or check the weather.
Although digitally savvy, many consumers still see the physical branch as highly relevant and a vital component of their financial lives. They want a brick-and-mortar experience that merges with technology—and fits effortlessly into how they live and manage their money. Fiserv’s recent “Expectations & Experiences: Household Finances” survey explored the channels and methods consumers prefer when they execute financial transactions today—and how these behaviors set future expectations. The results indicate a need for a branch transformation strategy that blends human interaction with a digital, interconnected environment.
Branches boast solid roots
While digital and self-service channels enjoy a greater frequency of use, physical braches will not disappear anytime soon. More consumers (39 percent) prefer in-person interaction to online contact (36 percent) as their primary avenue when they engage with a financial institution.
Perhaps surprisingly, in-person branch interaction is a multi-generational aspiration. Not unexpectedly, seniors (63 percent) and boomers (45 percent) are most likely to visit a branch, perhaps due to potential unfamiliarity with emerging technology and comfort with tried-and-true routines. But a significant number of early (25 percent) and late (24 percent) millennials also prefer in-person experiences. Specifically, these younger consumers are most likely to find financial management burdensome and require expert guidance as they plan for their first homes, cars and families.
Regardless of age, channel or need, consumers expect speed, security and personalization. By embracing new technologies without alienating loyal customers, financial institutions can create a contemporary, welcoming environment. For instance, tellers can leave their desks and greet customers or members as they enter the branch, with a tablet in hand to quickly and accurately address their needs.
Fulfilling the need for full speed
Banks are taking note of consumers’ fast-paced lifestyles. Many already are shifting how they do business to meet this “anytime, anywhere” mindset, with services such as instant card issuance more readily available. If a card has been lost or stolen, and the customer is leaving for an overseas vacation tomorrow, they cannot wait seven to 10 business days for a new one to arrive in the mail. More than half of consumers say that access to convenient services such as immediate card issuance would influence where they bank.
Among debit card users who received a new card, the data found that one in five did so at a branch. Consumers who receive mailed cards don’t always activate them immediately, if at all. This inactivity translates to lost income opportunity for issuing financial institutions.
As the branch of the future becomes reality, expect to see more small and mid-sized financial institutions join their larger counterparts in exponentially expanding their technology offerings. A 2017 Aite Group study noted that 39 percent of U.S. banks with more than $10 billion in assets had adopted instant immediate card issuance by the end of 2016.
That compares with just 29 percent of credit unions and 24 percent of banks with less than $1 billion in assets. Financial services organizations that do not offer this convenience may find customers and members gravitating to competitors that do.
Communicate, cultivate connected experiences
While financial institutions expand their services, they likewise need to amplify the benefits. If consumers do not know that such services exist, how can they leverage them for personal benefit?
Only 37 percent of debit-card-carrying consumers understood they could potentially receive a new or replacement card at the branch. By promoting onsite issuance as an accelerated alternative, branches can place active cards in more customers’ hands immediately. Additionally, it presents the opportunity to cross-sell other products and services—or, for instance, present a walkthrough of how to use EMV chip cards or fraud notification tools.
With 2020 rapidly approaching, the financial institution of the future already is coming to life. Consumers still see great benefit from the in-person service and familiar experience of visiting a physical branch, which bodes well for the industry’s future. Even with the best digital experience, a lost phone also means a lost mobile wallet.
The physical card provides an important fallback and instant issuance is a key differentiator to create a positive member experience, save time and serve a critical function of a branch transformation strategy. And in many cases, that something instant will set the stage for something lasting—customer loyalty.