The demise of the bank branch has been a hot topic for ages and especially during COVID-19. However, the decline of branch traffic did not start with and will not end with the coronavirus. Before the pandemic, many were already predicting the future of banking as digital and the decline of branches as a major channel. Over the years, the number of people that regularly go to a branch has decreased as consumers and the industry have evolved. Do these changes in consumer preferences mean an end to branches altogether?
We want to ease some of these concerns by illustrating 3 ways to set up your branches and bankers for success in the digital age, and the tools you’ll need to do it.
The reality about branches
Have COVID-19 shutdowns made digital banking more popular? Of course. Will branches become obsolete because of it? That’s doubtful. J.D. Power reports that 46% of people plan to go back to “banking as usual” after the pandemic — that’s still around half of your customers that still want to have the branch as an option, so make it worth the trip. You have to prepare for and give an equally convenient and worthwhile experience to both camps.
All the gloomy news about branches has made financial institutions worry they have to reduce their branch network, or transition to all-digital to survive. These worries are nothing new, but it’s still impractical and unattainable for most community-sized institutions.
Developments like ATMs and call centers were created to help financial institutions save time and money by driving minor transactions to cheaper channels. The banking industry has been working for decades to reduce transaction volume in the branch — fewer in-branch transactions allow time and space for bankers to be bankers rather than order-takers.
Community bank branches continue to exist because customers continue to need a banker’s help. Communities need community banks. And the people who know your community and customers best are those inside the branch. Post-COVID, customers will be more accustomed to using digital banking channels, but they will still appreciate help from a banker who knows their needs. Financial institutions have been trying to shift the function of the branch from in-person transactional centers to financial advisory centers, and now is a great time to make that switch.
3 Ways to Leverage Branches in the Digital Age
Branches can still be profitable and complement your digital channels at the same time. By supporting your branches as an outbound channel, offering a mix of digital and personal experiences, and making branch meetings easy, your financial institution will be on the right track to the banking experience that customers want.
1. Think about your branches as an outbound channel
How can you connect with customers when only a few are entering the branch? Think of your branches in the same way that digital, phone calls, and direct mail can be outbound marketing channels. Outbound marketing is any kind of marketing where the company or business starts the conversation and sends their marketing messages outward to customers and prospects, as opposed to inbound marketing, where the customers initiate the conversation when they need you.
Luckily, you can use your branch network as an outbound channel to proactively reach your customers and prospects instead of waiting for them to initiate the conversation. They are already your customers, so you won’t be cold-calling with your outbound methods.
Conducting smart marketing campaigns with lists of highly-targeted customers is one of the best ways to use outbound marketing within your branch network. We will get more into this below.
2. Mix digital and personalized experiences
How do you get to know your customers when everything is done digitally? Don’t close your branches — use them differently. There are many ways to maintain direct relationships without an in-branch transaction.
What can you do to have the most engaged and helpful bankers around? Provide them with clear direction so they know exactly what to do to see results. Focus on what they are best at and your main differentiator: personal, helpful relationships.
Bankers shouldn’t have to wait for customers to enter the branch to maintain a personal relationship. If a customer doesn’t come into a branch, how will you talk with them? Using your vast amounts of detailed customer data, proactively offer relevant, timely products and services that you know they need. This way, you build trust through understanding their needs and position yourself as a knowledgeable advisor before they decide to go to your branch. It’s a win-win for bank employees and customers.
As financial institutions continue to improve digital channels, they risk a disconnection of their personal relationships with customers. This is called disintermediation. Moving to all-digital won’t set your community bank apart from the big banks of the world.The personal touch that sets community banking apart would be lost. It is clearly more difficult to start and nurture personal relationships when you can’t physically meet in a branch, so personalized, meaningful, and timely communications (calls, emails, etc.) from bankers will go a long way.
Example: Onboarding
Many financial institutions use onboarding to communicate with new customers to increase retention and deepen relationships. While onboarding can be completely automated, community banks still need to add personalized touches with their customers to keep them connected with their banker. Finances have always been stressful and complicated, and customers still need the advice of their living, breathing banker. They will appreciate when onboarding stages are timely and genuinely helpful in achieving their financial goals.
3. Banking by appointment
Especially during COVID-19, you have to figure out how to get face-to-face with your customers. Make it convenient for them to set up meetings with a banker either on Zoom, on the phone, or in a distanced meeting inside the branch. This way, they know they have the option to get help from a real person in the way they are most comfortable with. The branch’s value to the customer has evolved from the traditional methods of banking they can now do digitally, and the current pandemic has only accelerated changes.
What tools do you need to effectively do this?
Be open to newer ways to support the mission of the branch banker. Embrace and use it to improve personal relationships, boost productivity, and make bankers’ lives easier
- Solve your data problem. By cleaning and integrating your customer data, you can easily see everything you need to know about a customer at any time so interactions are convenient and efficient. Your data helps you understand your customer’s needs and helps you proactively reach out to them. You may even be able to reach out to customers you weren’t able to reach before.
- Harness that data for smart marketing campaigns. The key here is to conduct highly targeted outbound campaigns to customers who actually need what you have to offer. Data-driven targeting uses your data to find the customers with the highest probability of need for a product or service. When customer data can tell you what they need, you have the perfect conversation topic for your next call and can make a relevant offer.
- Customer Relationship Management makes all the difference. A customer relationship management platform helps you organize all customer information and communication and can help branches better perform. But, you’ll need more than the typical CRM to handle the distinct challenges and needs a financial institution has — banking-specific capabilities make all the difference! Your CRM must have access to clean, integrated customer data as well as targeted product offers. You’ll know what products and services your customers already have, what they need, who talked with them last, and what you can do to keep them satisfied. Armed with this information, you don’t need anyone to come into the branch to generate a helpful and productive conversation with a customer.
- Having an onboarding strategy is key to retention and engagement, and you can implement automation to make this process easier. Automated onboarding isn’t just a computer sending emails for new customers without human involvement — you still have to make this process personal and reach customers at the appropriate time. Automation augments tasks for bankers by facilitating conversations and helping to manage repetitive or time-consuming tasks.
- Measurement is critical so no banker activity is a shot in the dark. Measuring everything gives you the information you need for future improvements and this visibility can then drive high-performance behavior in your team. Dashboards and scorecards are helpful here to show and measure tasks, opportunities, and key performance indicators. Plus, bankers will appreciate knowing exactly what to do and the knowledge of how their work contributes to the big picture.
The branch of the past is dead. A new kind of branch emerges.
Branches are not dead. The concept of the traditional branch as we know it is gone. There’s been a lot of projection about what going back to “banking as usual” will look like after the pandemic ends — but what exactly is banking as usual? Do we really want what we had pre-pandemic (which was already moving toward digital)? Realistically, branch banking can never go back to that, so community financial institutions must adapt and focus on their distinct strengths.
As a community financial institution, you are empowered to make customer experiences personal, whether inside the branch or virtually. Anyone can open an online account at a megabank, but will they be able to talk to a real person when they need to? Will they receive genuine financial advice or interactive, relevant communication? This continues to be the community banking advantage.
Adapt and Repeat
Branches and their customers have been evolving for decades and will continue to do so. Choose to adapt and use them as an outbound channel instead of fearing for the future of branches.