The Future of Personalized Banking

Banks are changing – both inside and out. It’s not uncommon these days to walk into your local branch and notice that they’ve installed new furniture, or they’ve upgraded their screens, or things seem a little cleaner, and now you can get yourself a coffee while you wait in line. You return home and see a bank-related commercial on television that confirms what you just witnessed – the protagonist is astonished at the new level of service, comfort and confidence she gets from her bank.

There are indeed reasons why these changes are happening and with much more frequency than ever before: the modern banking consumer, faced with an abundance of banking choices and little cost to switch to a competitor, expects much more value for her patronage. As a result, banks are now operating with a higher degree of urgency to address this fundamental shift in consumer expectations. One of the more dramatic ways they have decided to confront this issue is to offer fresh banking formats and environments, cloaked in a newly-created brand. Here are four elements to make your bank environment more personalized:

1. Premium beverage offerings

By offering your patron a selection of brews from a high-quality coffee maker, you are not simply giving them a beverage, you are expressing how valuable they are to you. This gesture demonstrates to them that their patronage is worth spending the extra money. Meanwhile, from an operational standpoint it makes the patron more comfortable in her surroundings and encourages her to stay longer; and the longer you capture a consumer in your branch, the more opportunity you have to generate business from that consumer. So, it is time to trash your five-year-old Keurig machine and upgrade; you’re not only providing fresh coffee, but you’re buying potential revenue.

2. An environment that is dramatically different than that of a traditional bank

If you ever experience the interior design of any of these new kinds of banks, you’ll walk away in astonishment. Gone are the days of the uncomfortable chairs, the unbearably long lines, and the harsh fluorescent lighting. Banks have realized that when you’re talking about stressful things like mortgages and investment strategies, fostering a relaxed and comforting environment is important for the consumer to feel that she is having a positive experience. This, in turn, will increase her confidence in the products you are discussing, the employee she is conversing with, and the bank as a whole. And, if a consumer is more confident in these things, then there is a dramatically higher chance of selling her a product. So, it is important to consider addressing your interior design to reflect modern trends and foster this comfort and confidence. TD Bank experienced an increase in its loyal customer base with the help of our firm. We helped TD Bank build on its position, “Banking can be this comfortable,” by creating a comfortable environment that further enhanced the customer service experience. The retail environment underwent many improvements including a larger waiting area, a children’s centre, help and advice desks and a community wall. A more intimate and collaborative seating arrangement, modular meeting rooms, and services like a free shredder and coin counter added convenience for consumers.

3. No tellers = no pressure

In some places these new bank formats, such as the Tangerine Cafés, don’t actually sell any products. In fact, they are designed specifically to promote the brand and the company’s services. An important method of discussing the company’s services and converting those discussions to future sales is to eliminate the inherent pressure that a teller represents. If the consumer understands that this particular branch does not require her to make any transactions, she may feel more comfortable expressing her interest in a particular product (like a mortgage) because there will be no pressure to actually sign on the dotted line. This approach builds on the above point, since fostering a comfortable environment will potentially translate into sales.

4. Create a new brand

To cater to these new consumer expectations, one strategy is to house these new branches under a different brand. Scotiabank’s “café-style” branches, located in Toronto, are operated under the Tangerine brand but do not overtly affiliate with the parent company. The brand extension allowed Scotiabank to create personalized products and services for a new segment of consumers without cannibalizing its existing brand.

Banks can also leverage this new brand and new environment to connect themselves to their community by sponsoring events within the space that not only benefit the community but also enhance the positive associations the community has with the brand. And, as mentioned before, a positive experience with the brand will further entice a potential consumer to utilize its services.

Ultimately, as the banking landscape continues to shift at a dramatic pace, it is difficult for banks to keep up with the industry’s new best practices. There is, however, one constant in all these shifts: consumers expect a more personalized experience with their bank or they will not hesitate to close their account and go elsewhere. It is imperative for banks to determine how best to connect with consumer expectations.

If they ignore this industry disruption, or if they dedicate less resources than is necessary, they risk losing relevance in this hyper-competitive marketplace.