In many of my posts, I’ve discussed the importance of high-quality customer service, from the drive-thru window to the executive suite.
There may be skeptics out there who say that branch banking is on its deathbed and that customers are flocking to branchless banking through mobile devices.
Meredith Deen, president of Financial Management Solutions, takes a different view. Writing in American Banker, Deen takes a different view from those who say branch banking is headed the way of newspapers, establishment Republicans and VCRs.
She offers some intriguing points:
• Not every bank transaction can be completed with a swipe. Based on consumer behaviors, she argues that “branch vs. mobile” isn’t a case of either-or. She also contends that “A brick-and-mortar presence will remain a core element of financial services delivery for decades to come.”
• She offers numbers to make that case. Teller transactions have dropped by only 1.9 percent at banks, and 12.2 percent at credit union branches. If there was a serious move away from branches, Deen said, the numbers would have been higher.
• In fairness, some of the transaction decline at branches –more than 45 percent since 1992 – may be attributed to the increase in mobile banking. However, Deen also argues that the presence of too many branches – “overbranching”—may also play a role. Statistics seem to bear that out. Especially considering that from 1970-2014 – the ratio of population per branch fell from 9,340 to 2,970, American Banker reported. Bricks-and-mortar bank infrastructure tripled during that period. Those numbers point to the need to reduce the number of branches
Still, while customers are moving toward mobile banking for routine transactions, branches handle an average of 6,500 transactions per month, Deen said.
While it’s true that some respected firms and media outlets –like Javelin Strategy and Research, The Wall Street Journal and The New York Times – have written extensively about the increase in mobile banking, services like Apple Pay and the like, Deen isn’t ready to give up the branch banking ghost. She’s confident that branches will weather the storm. She’s optimistic, despite the fact that in 2015, the number of consumers who used a mobile device to bank once a week exceeded the number who visited a branch.
She again makes the case that mobile-vs.- branch is not mutually exclusive, any more than e-commerce is in the retail sales sector. Keep in mind, she points out, that the overwhelming majority of retail customers still prefer to visit their local retailer instead of buying online. (Online commerce makes up only 10 percent of retail sales).
In banking, Deen argues, mobile banking is simply another method of contact with customers.
Keep in mind, she cautions, that advances in technology will play a bigger role at branches in the coming decades. Analytics and “big data” will also mean that the cookie-cutter branch will go by the wayside, replaced by a branch that fits the socioeconomics of its neighborhood.
Bottom line: The watchword for the branch of the future is not extinction, but evolution. That means effective marketing and customer service are critical.
Case in point: Amazon, the godfather of online retail, is now building brick-and-mortar stores. That should send a good message to banks, credit unions and their branches.
Read the entire article: http://www.americanbanker.com/bankthink/mobile-banking-isnt-a-death-knell-for-the-branch-1079486-1.html
For another article on how to take care of customers, check out:
