Banks Need to Expand Hybrid Banking Options to Survive

When you think about the financial services industry, “flexible” isn’t a word that typically comes to mind. With regulations, policies, and strict underwriting rules, banks often can’t adapt to customer requirements and desires as easily as they would like. But being able to do so, particularly when it comes to where, when, and how consumers want to interact, is becoming more and more critical.

Why? Not surprisingly, COVID-19 has caused significant numbers of people to want to limit social contact in public places for the time being.

Also, the expanding experience economy is conditioning consumers to expect more from their banks. They are attracted to the institutions that offer good customer experiences and flee those that don’t. Online reviews and social media posts help consumers to easily spot great, or poor, customer experiences.

In addition, the rise of remote work has shown consumers that it’s possible to meet anyone nearly anytime instantly via video appointments without the hassle of drive time, traffic, lines, and waiting in lobbies. However, while some customers will prefer to meet with staff online, others will still prefer to meet in person.

To dive deeper into consumer preferences, JRNI surveyed over 500 U.S. financial institution customers to learn more about their attitudes and needs when it comes to interacting with their bank. What it found was that even though banks are seeing a downturn in in-branch visits, overall interactions, whether in-person or online, are still key to offering great experiences and building brand loyalty.

Communication and Convenience Options are key

The findings clearly showed that banks must expand their communication and convenience options, including the ability for customers to meet in a branch, online, or via web chat, based on their specific preferences. Respondents noted:

• Many have found it difficult to interact with their bank in the past six months. 33% have found it challenging to talk to the right person at their institution.
• 45% would prefer meeting with an agent in person compared to 34% who prefer a meeting via video.
• But consumers want the option of video appointments. 77% would prefer to go fully remote. But in-person appointments aren’t going away, as 23% say they still want the option to visit a physical bank branch.
• Bad service was the number one reason customers leave their bank. Among other top reasons that people consider switching to a different institution include unhelpful customer service, a poor online banking experience, and not enough physical branches.
• Also, inflexible hours will drive away some consumers, with 39% having considered switching to a bank with more flexible service hours.

It all goes back to being flexible and accommodating. Banks must offer flexibility so customers can decide what’s best for them with regards to their interactions.

Online Versus In-Person Preferences

For example, respondents noted that online chat and online banking add value, with 68% wanting to use a live chat option to speak with an agent from their institution’s website. Women in particular want online chat, with women nearly twice as likely as men to want to interact via chat. And high-income consumers (over $110k) are 13% more likely to want online banking.

While online banking is clearly important, bank customers still want to see a variety of staff face-to-face, specifically preferring tellers, loan processors, mortgage consultants, investment advisors, relationship managers, loan officers, and wealth managers be available to meet in person. The same group reported that they want access to credit analysts via video.

The research demonstrated that different kinds of service require different kinds of interaction. The top reasons consumers want to bank online are to manage check payment issues, overdraft services, credit card issues, and debit card issues. However, customers want to visit a branch for loans, including mortgages, home equity loans, small business loans, and commercial real estate loans. The similarity among these types of transactions is the many options available and a desire to discuss with an expert.

Customer Satisfaction Driven Through Adaptability

Businesses that want to matter are striving to improve the experiences they provide, and customers are being conditioned to expect more from businesses in exchange for their loyalty. Leading banks recognize that giving their customers flexibility is key to improving their experiences.

In-branch appointments aren’t going away, and neither are video appointments. The data shows that banks that make it easy for their customers to bank how they desire, including scheduling appointments and meeting however they prefer, will attract more customers, retain their existing ones, and deliver the experiences that fuel growth and loyalty.

Author: Nick Barnes, Practice Director, Financial Services at JRNI