What Agile Banking Means to Today’s Customer
In the world of banking, customers’ priorities are shifting. Omni-channel banking services, though still desirable, are giving way to highly curated and differentiated experiences that create deeper emotional connections. Recent research conducted by our firm for the banking industry clearly identified the branch continues to play a pivotal role in building relationships, with branch staff wearing multiple hats. Employees must continue helping customers navigate the wide range of service choices to ensure they feel confident and in control. However, most financial institutions are challenged to provide the level of customization and personal service today’s Millennial customer expects. Universal bankers and video ATMs, which play a big role in creating seamless banking experiences, only get part way there. Today, services and experiences need to be tailored for individual life stages and lifestyles. This makes logical sense as Millennials are not one cohesive group with identical needs and aspirations, and Generation Z is now emerging with even greater divergent perspectives. Being able to adjust and balance easily and quickly to meet these individual needs is a new paradigm banks cannot afford to overlook.
Our work defining customer segments and personas for North American and international financial institutions has confirmed our belief that Millennials do not represent one singular set of cohorts, but rather a wide range defined not only by age but more importantly by needs and aspirations. As such, banks need to shift their efforts from a macro view of business, building trust through consistent and efficient brand delivery systems, to one that recognizes each customer as an individual with unique needs. The evolving need to create unique bank experiences is critical as many studies have demonstrated that negative experiences undermine a financial institution’s ability to build trust and confidence, a key factor in brand preference. Creating the right branch experience is also a key competitive advantage banks can leverage against fintechs that do not benefit from a physical presence or distribution channel. To achieve the flexibility required to create immersive, emotionally connected experiences for a variety of different customer personas, we have identified five initiatives financial institutions should consider:
1. Customizable digital experiences
Let’s face it, websites have evolved significantly since we helped launch some of the first online banking platforms more than a decade ago. With the advancement of big data, AI and dynamic websites, digital experiences must evolve to tailor the offering to the exact behaviors of each individual customer. From adjustable landing pages and account preferences to the delivery of highly tailored pop-up advice, digital platforms need to provide customized, smart experiences. The specificity of these experiences will become even more critical as day-to-day banking transactions shift from physical to digital ecosystems.
2. Tailored banking engagement zones
In several new branch designs we recently completed for financial institutions in North America and China, we introduced the concept of engagement zones to meet the needs of a diverse customer base. The zones include “smart e-banking hubs,” consultative selling cubicles, and digitally savvy meeting rooms, and were designed to reflect the attitude that not all visits are transactions based on the exchange of money.
Branch layouts need to be designed for each point along the customer journey, which we define as “attract, transact and retain,” but also for each life stage, and to reflect different lifestyles. This is very dependent on the community, which is another reason banks must develop the ability to be adaptive. In China, consumers are more open to virtual ATM transactions and in-branch internet banking as customer queue lines and conventional transaction periods are longer than those in North America. Each branch also differentiates between customers with everyday needs versus VIP customers who receive a higher degree of personalized services and banking experiences. Branch layouts should also create tiered degrees of privacy across a range of transaction platforms, depending on the demographic, community, and stage along the customer journey.
3. Personalized recognition
Recognizing the value and contribution of each customer is a simple but key action that can create loyalty. Historically, lobby managers or greeters formed a pivotal role in recognizing each customer as they visited a branch. Due to a push in reducing transaction and operational costs, this critical role was removed, leaving a void.
In North America, we design Universal Banker stand-up pods for associates and tellers, which gives the staff greeter ease of access to the branch entrance, and allows them to serve dual roles of banker and greeter. In our work for TD Canada Trust, we created help and advice desks that serve to both greet customers entering the branch and also manage services such as mortgages and loans. In China, our branch design always includes a lobby greeter station to provide direction to the right services, as well as managing electronic queuing for the cash areas and opening new accounts.
4. Community integration
The push towards “channel strategies” has in practice meant no more than the downsizing of branch networks. A new, more effective strategy is emerging, in which different types of branch archetypes are created to better reflect the needs and lifestyle aspirations of each community throughout a network. Millennials in particular need to feel as though they are contributing members of their community, and banks need to respond accordingly to stay competitive with credit unions and regional community banks. These “local” financial institutions tend to have superior service scores and gain powerful customer retention versus nationally focused banks. Finding ways to increase a local perspective across a national network is increasingly important, and we’ve done this for several clients in recent years.
For TD, we created a community wall supported by digital signing that reflects the history, culture, and key events of each and every branch within the entire network. It’s no wonder TD continues to lead in consumer preference and overall customer service. For Regions Bank in the U.S., we leveraged a digital wall to effectively reinforce its local community involvement.
5. Tailored services and offerings
Ultimately, creating an immersive banking experience is predicated on the ability to offer a range of products and services that best fits each individual customer need. These tailored services can vary from distinctive lending products that cater to an emerging market niche to the ability of giving greater relevance to certain products. Banks are starting to utilize the big data they have been collecting to understand the multitude of segments and personas in their customer base. The next step is to determine how to tailor products and nuance communications to meet these varying needs. Digital technology and AI-enabled ecosystems provide valuable new tools to assist in accurately developing these kinds of highly customized services, and new research techniques that are emerging in neuroscience can also be accessed. Most importantly, these new technologies will provide financial institutions with the ability to manage large scale customization programs that deliver customized and personalized services and offerings.
Agility is the means to move quickly and easily, and in order to meet the exact needs of a diverse customer base who want individualized treatment, banks must evolve their infrastructure to become this nimble. This degree of immersion in a bank experience will increase brand stickiness across each element of the bank’s omnichannel strategy, which means it is a win for everyone. Ultimately, a bank network that becomes agile in response to customer needs will have a stronger position as Millennials and Generation Z, for whom this kind of specialized service is simply the expectation, become the most important demographic groups for banks to consider.