As more tech companies branch out into the financial services market, traditional retail banks are feeling pressure to compete like never before.
Just this week, a report by management consulting firm McKinsey warned that the banking sector is facing increased threats from digital platforms like Facebook, which is offering payment transfers through its Messenger service, and Amazon, whose small-business lending has now topped the $3 billion mark.
Many banks and credit unions are investing heavily in digital services to try to compete with these platforms, as well as smaller fintech start-ups. But some new data suggests that financial institutions would be wise to consider the state of their in-branch services as well.
In fact, new survey results suggest that brick and mortar banking remains incredibly relevant with Americans as part of an integrated Omni-channel banking strategy.
Commissioned by March Networks and conducted by market research firm Ipsos, the survey shows that while Millennials are more likely to use mobile apps for personal banking, the majority of U.S consumers – 73% – are still turning to their local bank branch or ATM to conduct transactions. But, even more interesting for banks is the high expectations these customers have. The survey found the following:
- 1 in 5 survey respondents (and a higher 1 in 4 Millennials) said they have switched banks in the past because of poor in-branch service.
- Nearly three quarter of respondents – 74% – expect their bank branch to be clean and tidy, and would be inclined to switch banks if their local branch didn’t meet their expectations in terms of presentation.
- Almost half of survey respondents said waiting more than 5 minutes for service is unreasonable.
So what’s the takeaway for banks? Amidst all the talk about online and mobile banking, a core group of consumers want to conduct some transactions at their local bank branch, but this group won’t settle for less-than-exceptional customer service.
So the bar is high for banks, but it’s not unachievable.
Some suggest that traditional banks actually have an edge over many fintechs because consumers trust them immensely. This is likely because of their reputation for stability, and their high security standards. In fact, the Ipsos survey shows 96% of Americans are happy with their local bank branch, and almost as many (86%) are satisfied with how their bank handled a fraudulent incident affecting their account.
Banks can leverage this strong relationship to evolve and grow both their brick-and-mortar and digital strategies. Many banks are well on their way when it comes to digital, but optimizing in-branch services is also possible with the right tools and information. New technologies like intelligent video can help in this regard by turning vast amounts of surveillance video into valuable business intelligence that can help banks boost branch productivity and improve customer service.
Given the importance that many Americans still place on in-branch banking, it’s one more tool banks may want to consider.