Retail: Learning from Banks

June 4, 2019

Walk into a “smart branch” of BMO Harris Bank, and you’ll find cardless ATMS, public Wi-Fi for mobile banking on site, and on-demand video access to bankers for specialized advice. Bankers are still available in person as well, equipped with laptops and tablets so they can quickly answer questions.

This is the bank branch of the future—a seamless blend of the digital and physical customer experience. As with their peers in the retail industry, traditional banks have faced strong competition from their online counterparts and lots of questions about the value of physical locations.

The reality, however, is that consumers want both. In response, some forward-looking banks have combined real-life customer service at physical branches with digital convenience. And these modern strategies offer retailers (and banks, as well) a look at what retail success may look like in the future.  

Bank branches are dead. Long live bank branches.

Several studies show that banks, like stores, still matter. In a 2018 survey from PwC, 65% of respondents said that felt it was important that their bank has a local branch, and 25% wouldn’t open an account with a bank that didn’t have at least one local branch.

And the types of transactions that consumers want to do in-person? They’re undoubtedly higher-touch. More than half of the same respondents said they’d prefer to apply for a loan or open a new account in person. And yet the customer journey has grown much more complex.

In all areas of retail, the physical and digital have merged with today’s consumers just as apt to look at products online before they head to a physical store or vice versa. With banks, that means that customers may explore loan options via their mobile device and then come into a branch to apply. Or a banker may suggest a brokerage account, and the customer may then research options online.

The bank branch of the future

So how have leading banks approached this new world—and what can retailers learn? Here are some innovative strategies from banks at the forefront of the digital-physical trends that easily apply to the rest of retail:

Combining tech with a human touch. Oregon-based Umpqua Bank has received lots of kudos for its “neighborhood store” approach to branches, which are complete with space for community meetings and free locally sourced coffee and tea. The company’s locations also feature an app wall—a large touch screen that showcases bank services and products. Umpqua’s success in this arena is a good reminder that consumers still like spaces, but they have to be the right kind of spaces. In addition, retailers need to leverage both physical and digital with an eye toward serving the customer in the ways that are most convenient for them.

Scaling expertise with video. Regions Bank customers can access bankers via live video from branch locations to get help with more complicated transactions and inquiries. The video calls allow customers to get the expertise they need, no matter where they’re located. It offers up an interesting example for retail, where it’s common for some stores to have a broader selection or more staff than other locations. This is where retailers can lean on tech to fill in the gaps, from stylists available via video to online ordering available within physical stores that carry less product.

Reimagining the role of store locations. A report by Bain notes that usually one-third of bank branches generate the greatest return. That’s why banks such as Deutsche Bank in Germany have invested in central locations that provide a full menu of services, complemented by remote advice offerings and a large network of self-service locations for cash transactions. This strategy reduces expenses, while still offering customers service at physical locations. In retail, similar concepts include experimenting with low-cost pop-ups to bring the product to a new or growing population base, as well as utilizing smart vending machines and kiosks.  

The communication connection

As noted, this digital revolution is changing the customer experience, making it easier and quicker access to information and services. But it’s also changing the nature of work for retail employees, in banks and beyond. The role of communication is more important now than ever, between headquarters and branches and between employees and customers. The handoffs between these interactions are critical, and messaging needs to remain constant between channels. Otherwise, the experience becomes disjointed – and customers end up confused and frustrated.

Consumers aren’t looking for only in-person or only online service. They’re looking for what’s most convenient for their lives. The banks that understand this are already pulling away from the pack, and offering some unique lessons for retailers looking to do the same.

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