Omnichannel banking is becoming increasingly important as consumers move between digital and in-person interactions when managing their financial lives. Even customers who are comfortable researching products and completing transactions online may still want access to a banker when making decisions such as opening a new account or selecting the financial product that best meets their needs.
Regions Financial is addressing this behavior with an online tool designed to replicate part of the account-selection experience traditionally provided in a branch. Customers answer questions about their banking habits and receive a checking account recommendation. They can then choose to open the account online or schedule an appointment at a branch, allowing them to move between digital and face-to-face service based on their preferences.
Even the kind of consumer who is always connected to the Internet may still crave a human connection when it comes time to open a bank account.
Consider Regions Financial. The Birmingham, Ala., bank recently launched an online tool that helps determine which checking account is best for its customers — or prospective customers — by asking a series of questions: what features they need, how much they receive in direct deposits each month, how many checks they write in a month, and so on.
The interactive tool is meant to recreate the experience someone might have in the branch as they talk to a banker who would go through a similar process in person. At the end of the session, the tool gives the user a recommendation and two options: open the account online or schedule an appointment in the branch. Preliminary results show the branches are still a draw.
“We are less than two months in, but our customers are choosing both options,” said Andy Hernandez, head of digital banking for Regions. “For us, it is not about making them choose. It is about simplifying the experience and acknowledging that many customers may want to start the process online but finish it face-to-face.”
For the banking industry, consumers’ perhaps fickle nature presents a chicken-and-egg problem: Do consumers want a mix of digital and in-person banking, or does the inadequacy of current digital offerings effectively force them to use a second channel?
With the role of the bank branch much maligned of late, financial institutions are seeking the right configuration for their branches. And as branch use can vary across markets and demographics, making the right choices can be challenging. FIs must determine the appropriate level of in-person service expected for each branch and network as they strive to meet consumer expectations. This must be accomplished as they consider such factors as online and mobile banking penetration and the need for in-person advice when questions arise in digital channels.
The early experience at Regions demonstrates why financial institutions should be cautious about treating digital banking and branches as competing channels. Customers may value the convenience of beginning a process online while still wanting the reassurance or personalized assistance that comes from speaking with a banker before completing an important financial decision.
This creates a challenge for banks evaluating the future of their branch networks. Continued growth in online and mobile banking does not necessarily mean that consumers no longer value branches. Instead, it may change when and why customers visit them. Routine transactions can increasingly move to digital channels, while branches can provide advice and assistance when customers encounter more complicated questions or want personal guidance.
An effective omnichannel banking strategy should therefore make it easy for customers to move between channels without disrupting their experience. Digital tools can help consumers research products, narrow their choices, and begin applications, while branches can provide additional support when needed. Financial institutions that understand how channel preferences differ across markets and customer segments will be better positioned to determine the appropriate role for individual branches. The objective should not simply be to push customers toward digital banking or preserve traditional branch interactions, but to create a coordinated experience that allows customers to choose the combination of digital and human service that works best for them.
Overview by Ed O’Brien, Director, Banking Channel Advisory Service at Mercator Advisory Group
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