The continuous decline of branch office visits and the booming growth of digital channels are forcing retail banks to reinvent the role of the branch office touch point. In fact, retail branch visits are expected to drop by more than 50% by 2015.
The challenges of this transformation reside at two levels:
- Digital Customer Service: what digital channels should be offered to customers without losing the unique value of a personal and trusted relationship?
- Virtual Customer Service: what tools and processes should the bank implement internally in order to smoothly integrate the vast population of customer-facing personnel in the digital customer service chain?
Following the 2008 crisis that shook the whole investment banking sector, the retail banking looked unchanged by comparison. Five years later, many retail banks are suddenly realizing the urge to transform themselves because of an external factor they typically underestimated: the customer’s power. According to Cap Gemini, more than 40% (of customers) are not sure if they will stay with their bank in the next six months”. The key drivers for this defection are as follows:
- Commoditization vs. customer experience: While products and services become commoditized, quality of service and ease of use are the #1 customer loyalty factors.
- Digital channel adoption: the transformation to digital channels is accelerating. According to McKinsey, between 2010 and 2015, digital interactions will grow by 300%.
- Branch office visits decline. While retail banks encourage customers to use self-service channels for low value transactions to reduce costs, branch office proximity is no longer perceived as a key factor for bank selection.
As a result, retail banks need to focus on building capabilities to deliver the right products through the right channels, and to deliver a convenient, consistent and personalized cross-channel experience to customers.
Connecting in the branch channel
The reality is that the customer experience with branch channels is usually poor because often branch interactions are not managed consistently with the other channels and touch points a customer may engage on. Here are the most frequent high effort issues customers face when contacting their bank branch offices:
- Accessibility issues: Which number and when should I call my branch?
- Repetition: I explained my problem to multiple people before getting an answer.
- Low First Call Resolution: I called my branch, sent emails and they don’t call me back…
- Poor personalization: my branch is closed, and the contact center can’t help me
- No multimedia: It would be so useful to ask a question to my personal banker via SMS…
At Genesys, we estimate that unmonitored and lost calls in branches frequently exceed 20%. Retail banks are starting to realize the dramatic consequences of such a poor experience on customers’ loyalty and are compelled to take action.
Combining the value of a personal banker with the efficiency of the contact center
Once the status of the current customer experience and its business consequences are assessed, retail banks must develop a strategic vision. This is probably the most delicate stage of the process, a balancing act between multiple challenging and opposing objectives:
- Convenience: Deliver a unified digital customer experience across touch points (phone, web, mobile, branch, ATM), across channels, and interactions, whenever needed. In particular, the channels offered to interact with a personal banker shouldn’t differ from those managed by the contact center.
- Personalization: Customers always expect to be treated by ‘their’ banker, someone that they trust, knows their needs and can meet them face to face when needed.
- Efficiency: Banks permanently push customers to use self-service channels for low value transactions, and alternatively the contact center for simple ones. While branch advisors should concentrate on high value interactions, they tend to be more virtualized.
- Sales: Detect sales opportunities and take advantage of customer interactions to realize them with skilled resources.
In a nutshell, retail banks need to combine the value a personal banker approach with the efficiency of the Contact Center. A clear strategy should define the customer experience and overall customer journey, how you ID and segment customers & services, and WHO shall reach WHOM for WHAT and WHEN.
Now is the time to reinvent the role of the branch office in the customer journey
Many retail banks are preparing for or launching global branch transformation projects such as:
- Point of sales transformation: Banks radically change their brand image by redesigning the branch experience with open spaces, digital technologies, direct sales touch or remote video experts. See the National Bank of Greece case study for an example.
- Branch reduction/consolidation and staff mobility: The global number of branches is expected to decrease by 26% from 2010 to 2015 in developed countries. Branch offices are regrouped, and staff might be reduced, de-localized or re-purposed. See the Bank Hapoalim (Israel) case study for such a project.
- Branch channel automation and integration: Branch interactions are traditionally handled locally. Many banks have started integrating all branch interactions into the end-to-end customer experience. Refer to this video of Bank Mizrahi (with English subtitles) for such an example.
- Direct digital channels: Personal conversations with advisors are usually more demanding because of the complexity of the transactions. Chat, video, co-browse, screen sharing are now requested as a direct channel.
It’s important to note that branch channel transformation cannot be managed like a traditional contact center project. There are many specific challenges that should be addressed early in the project definition phase, including:
- Multimedia channels. The channels, access modes (e.g. Skype, web, mobile) and use cases need to be clearly defined from a customer & bank employee standpoint.
- Customer segmentation. In order to increase sales performance and optimize staff workload, accurate customer segmentation is required on each channel.
- Resources virtualization. Branch optimization usually requires a re-engineering of business processes between multiple teams such as branches, contact center and back office experts.
- User behavior, presence and desktop. Branch staff do not work as formal agents. They have unplanned face-to-face interactions, scheduled customer meetings, are more mobile and do not have access to the same applications as formal agents.
- Resources scale and diversity. Advisors with direct customer touch are on average seven times more numerous than agents. Moreover they are usually distributed across a vast geography, and sometimes within diverse business groups, cultures and operating modes.
- Administration & reporting delegation. A branch office must have autonomy to control its business rules and KPIs.
- Infrastructure. The architecture must integrate smoothly into existing IP Telephony and Unified Communications environments.
Today, branch digital transformation is not an option in retail banking – it’s a requirement. The only questions to consider are HOW and WHEN to do it.
No bank should leave customer experience at the door step of their branch office!
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