With the increasing popularity of online and mobile banking, it’s been predicted that the bank branch will soon become obsolete. And yet, there are signs that the branch will continue to be relevant but may need to offer a different role than in the past. In a 2016 North American survey by Accenture, 87% of respondents said that they would like to use a branch in the future. The most common reasons for these future visits were reported to be increased trust and value from speaking to someone in person. These insights reveal a need for human connection that is not currently being met by digital channels. Branches also seem to be preferred channels for advice and complicated financial tasks, or for consumers that have firmly ingrained habits. These reasons behind visited branches will be discussed in more detail below.
Reason #1: Human Connection & Reassurance
Interacting with someone face-to-face is a richer experience than communication through digital channels. There are more sensory cues involved, such as looking someone in the eye, watching body language, listening to tone of voice, and shaking hands. Messages through digital communication, such as email and texting, are often misinterpreted without these additional cues. It is also easier to develop a bond and relationship in-person, leading to feelings of connection, familiarity, and ultimately trust. Trust is especially important in the finance industry, since mismanagement of money is a fearful experience. So, it is understandable that banking customers may prefer face-to-face interaction at a branch more than digital channels when they are feeling uncertain and need reassurance. According to The Financial Brand, many customers report that they prefer visiting a branch to deal with problems, open a new account, or make big transactions.
Dan Geller, a Ph.D. behavioral finance scientist, reports that financial anxiety can also drive people to visit branches. “It’s not for convenience; no one is going to a branch for convenience. When the level of financial anxiety increases, people tend to make more instinctive financial decisions, rather than analytical. This, for many people, means to physically be in the place where the money is. It gives them comfort seeing the place. When people are less anxious about their finances, they are more open to doing things remotely.”
Design Tip: Branches that are designed to allow for private conversations with employees that have strong communication and interpersonal skills can ensure that this human connection and reassurance is available.
Reason #2: Help
No matter what your level of expertise in using digital channels, there often comes a point when you feel like you need a bit of help. For some people, just using online or mobile banking is too overwhelming. They may not understand how to use digital channels, lack the physical ability to navigate them, or simply not have access (or convenient access) to them. For others, it takes more complicated financial tasks to feel like they need help. Many customers have embraced digital channels for routine transactions and everyday banking tasks, but are visiting branches for complex advice. When customers do need help, it is important that there is non-digital channel in which to receive advice and education. Digital resources such as video and articles can offer information, and video-chats provide two-way communication, however in-person meetings and workshops are the most natural ways to educate and help a customer, especially those that are not as familiar with digital methods.
Design Tip: Branches that include space for educational sessions as well as well-trained staff to offer them will make them the most effective channel to offer help to customers.
Reason #3: Habit
According to a survey conducted by Bankrate in December 2015, 45% of Americans visited a branch in the past month. Some customers have developed a strong habit of visiting branches, and are resistant to changing that behavior. Branch visits may have become part of their weekly routine, or may reflect a dislike in new ways of banking and a lack of trust online services. Customers also may disagree with the rise of self-service models in many industries, from restaurants to grocery stores, and prefer full-service banking. This group of customers may be becoming more dissatisfied with banking as their local branches close and services begin to prioritize digital channels. Forcing change can result in upset customers and potential switching to other financial institutions that can better meet their needs.
Design Tip: Maintaining access to branches (even if only through kiosks or small-format builds) can meet the needs of customers that are habituated to visiting them.
These reasons of human connection and reassurance, financial help, and behavioral habits show that there is still a need for physical branches. Trust and communication are key drivers behind branch visits. Customers want to know who is handling their money, be able to discuss their concerns, and have peace of mind that everything has been done correctly. Digital channels are faceless and new, which can bring on feelings of uncertainty. They are also more one dimensional compared to in-person interaction in branches that offer complete communication experiences. It will be a challenge in the future to maintain in-person interaction as more efficient and cost-saving digital tools evolve.
Branches also have an advantage of offering immersive experiences as well as in-person interaction. If these reasons to visit and advantages are highlighted in branches of the future, they will continue to be key channels within the financial network.