Customer Service, Modern Style

There are always discussions in our industry about how best to build and maintain relationships with customers, and that’s a good thing. Too often, however, it comes down to forcing a choice between rethinking the branch approach and relying heavily on online and mobile technologies. That’s actually no choice at all—we have to make them work together.

First, let’s acknowledge that despite shrinking numbers, the branch isn’t exactly going away anytime soon. Sure, a whopping 80% of retail banking transactions are now conducted through self-service channels, admittedly including ATMs and voice-driven instructions. However, it also appears that a majority of retail customers now visit the branch at least once every six months.  Those face-to-face interactions are surely important for long-term relationships.

That‘s why, on this blog, we’ve often admired alternative approaches to branch banking. Some institutions have introduced innovations such as teller pods and community rooms, while others have become interchangeable with event spaces with cocktail lounges.  Odd as all this sounds, especially out of context, it’s exactly the sort of new thinking the industry needs to keep customers coming in.

There are plenty of other good ideas in this vein. For example, one institution getting positive interest is Umpqua Bank, which launched over 60 years ago in Portland, Ore., and has since spread quite wide. The concept behind its operation—it calls its outlets ‘stores,’ and goes very far in making the personal experience quite personal—has since been adopted by much larger corporations.

Here’s one sign of its success: Umpqua has gone from four branches in the mid-’90s to 400 ‘stores’ today. There are numerous stories of its commitment to customer service, and it hosts ‘business therapy’ sessions at its stores. (The jokes about the connection to the IFC network comedy show Portlandia virtually write themselves.) This is down-home banking with a billion-dollar payoff.

On the flip side of the equation—but not really, and that’s the point—is the relentless focus on digital tools that ease the banking experience for every customer, regardless of the complexity involved. For example, as mobile banking increasingly becomes the norm, there is ongoing debate about how to develop a mobile web presence to match the flurry of mobile apps. In particular, has the institution done its job if the mobile app links to a ‘traditional’ website, or should there a mobile-specific site option?

To many consumers, this is a discussion that belongs firmly in geek world. For financial services professionals, however, it could spell the difference between success and failure. One potential problem here is a factor that’s always been considered a luxury, the wealth of options. Google alone supports no less than three smartphone-optimized site configurations, and it’s unquestionably a critical differentiation. Add in the other complications: a broader range of forms factor and even operating systems than ever before, the staggering variety  of customized mobile apps (some heavily customized for specific technologies, others with only a mobile wrapping), and of course, the varying levels of technological sophistication involved.

It’s easy to assume that everyone has a smartphone, since everyone we know seems to have one. And yet, according to the Pew Internet Research Project, the reality is very different. As of January 2014, 90% of American adults have a cell phone, yet only 58% of have a smartphone. Yes, that’s not too far over half, which means that a great many consumers can’t get e-mails, receive promotional messages, download custom apps or conduct financial transactions via the phone.

And finally, there’s this. Just because we can do something doesn’t mean we will do it—as consumers we’re fickle, and so are our tastes and habits. We might be notified of a possibility via the phone, follow up later on the PC, ask someone about it at the branch because we’re in the vicinity, then complete the deal on the ATM. You might call it human behavior, but in our industry it’s come to be described as omnichannel banking.

It’s not about the branch or the app, per se. It’s about developing options for each customer-facing channel as it becomes available, then ensuring that they all work together seamlessly. That means it will be increasingly difficult at the back end, but it should be increasingly simple at the front end, for customers. That’s the only way to offer true service.

This Week’s Reads…

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

What We’re Reading: Omnichannel Banking, Bank Branches, Apple

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • UMB Emulates Apple in Push to Encourage Mobile, Online Use

American Banker

UMB Bank is channeling its inner Apple to encourage more of its customers to use online and mobile banking. The Kansas City, Mo., bank has begun designating tech support specialists in its branches whose job is to help customers understand and use digital services like mobile deposits and online bill pay.

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  • Omnichannel Banking: More Than a Buzzword

Bank Marketing Strategy

Banks are in an unequalled position to understand their customers. They already can see product use, transaction patterns and demographic profiles. By leveraging channel usage insight, they can develop an even more detailed customer profile. Understanding not only what the customer looks like, but also how they conduct their banking can allow for improved product offers using their preferred channel.

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  • Regions, Credit Unions and USAA Sit Atop Customer Experience Rankings

Bank Systems & Technology

The banking and credit card issuer industries both saw significant improvements over last year in the Temkin customer experience ratings. Regions and credit unions earned the highest customer experience scores among banks in the 2014 Temkin Experience Ratings, released earlier today. Regions and credit unions tied with scores of 81%, followed closely by USAA and TD with scores of 80%, and USAA also earned the highest score among credit card issuers with 77%. Overall both the banking and credit card issuing industries improved their scores over last year.

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  • BBVA creates digital banking unit

Finextra

Spain’s Banco Bilbao Vizcaya Argentaria has established a digital banking unit in a bid to boost the development of its various technology-led businesses. The new business area is charged with leading the bank’s digital transformation around the world, running its multi-channel strategy and the design of operational and commercial processes.  It will also work on developing new business lines, overseeing internal developments such as the Wizzo app as well as the bank’s startup investments made through its $100 million venture fund and Simple, the US firm it bought for $117 million last month.

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  • It’s Not Easy for Banks to Sell You on New Services

The Street

Banks spend tons of money figuring out how you like to spend and save money, especially when it comes to using credit cards and mobile banking, two huge profit center for financial institutions. The credit card industry will process about $4 trillion in card transactions this year, according to Business Insider, and Albany, N.Y.-based ResearchMoz reports that mobile banking is also flexing its muscles, growing from 480 million U.S. users at the end of 2012 to 1.08 billion by 2016.

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  • One in Three of Americans Hasn’t Been to the Bank in at Least 6 Months

WSJ Blog

More than a third of people in the U.S. haven’t been to the bank in at least a half of a year, according to a new survey.  People with lower incomes and less education visit bank and credit union branches less often, the Bankrate.com survey found. For example, 35% of people with at least some college education visited a bank in the last week, compared with 21% of people with at most a high-school education.

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