Customers like branches—but don’t depend on them
Comfort + convenience factors=branches
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- Written by Website Staff
While branches remain critical for acquiring and retaining a meaningful share of primary relationships, the role of the branch in the day-to-day life of consumers has shifted dramatically, says a Novantus survey into how consumers interact over various banking channels.
Consumers were evaluated across two factors—branch dependence (use of the branch) and branch attachment (value of the branch).
While only 7% of consumers surveyed are truly "internet ready" (i.e., neither use nor value the branch), an additional 39% no longer depend on the branch for regular transactions.
In other words, nearly half of consumers regularly transact via electronic channels, but a large majority still believes that the branch is important in choosing their bank.
"Investment in technology has accelerated the shift in the consumer mindset from branch dependence to perceived branch convenience. The knowledge that a branch exists provides a necessary level of comfort, but customers prefer to transact with their bank from the comfort of their home, office or on the go," says Chris Musto, managing director of Novantas. "In the coming years, virtual channels will be able to accommodate not only basic banking transactions, but also increasingly complicated service issues, and this will lead to a further drop in branch attachment."
Combined with results that demonstrate consumer shopping preferences continue to shift online, the research supports a new method of network planning that revolves around building a customer experience.
"The traditional distribution strategy relied solely on branch dominance, but as preferences shift to online channels, banks need to adjust their spending and strategy accordingly," says Kevin Travis, managing director of Novantas. "Banks must be fully capable of effectively handling customer service and sales issues at every touch point. And, more important, banks need to ensure positive experiences as customers move from consideration to fulfillment—no matter what combination of channels are used in the process."
Obtain the full report, “Novantas U.S. Multi-Channel Customer Research 2014” [Quick registration required]
Tagged under Retail Banking, Channels,
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