The Branch’s Role in Developing Long-term Customer and Member Relationships
As consumers continue to do the bulk of their financial activities online, banks and credit unions are focusing on branch strategies that foster long-term customer relationships, both at the local level and beyond. This is leading banks and credit unions to rethink not only how their branches are designed but also what types of services they have on offer.
"Despite the cost savings that came with replacing physical banking channels with digital platforms, banks sacrificed building customer relationships in the process,” says a report by Forbes. "While digitalization has made customers more self-reliant, it's also made it more difficult for banks to differentiate themselves. This has led to more switching and has increased the need for banks to focus on providing stronger personalization in order to retain customers.”
Here, we’ll explore the branch’s future role in developing long-term customer and member relationships. More and more, bank and credit union leaders are focusing on personalized customer experiences, omnichannel integration, and community engagement.
A More Personalized Customer Experience
Personalization is now critical for developing long-term relationships with customers and members, as most consumers now expect personalized services from most of the organizations they interact with. According to one study, 86% of institutions see personalization as a clear, visible priority for their organization, with 92% planning to invest further in the practice.
The banking industry has taken significant steps to introduce personalized services, content, and messaging in their digital storefronts. Introducing personalization at the branch level can be more challenging, and it is still dependent upon the organization’s ability to leverage data.
Data and Analytics
Financial institutions are currently leveraging data analytics to tailor services and products to individual customer needs, thereby enhancing customer satisfaction and loyalty. Personalizing customer interactions can take many forms, from offering customized financial advice to providing personalized product recommendations.
This approach not only meets the specific needs of customers but also makes them feel valued and understood, fostering a deeper emotional connection with the bank. This strategy is best suited to online experiences, but it has the potential to significantly improve relationships with customers and members in the branch space.
Achieving true personalization at the branch level requires a comprehensive understanding of customer needs and preferences. This can be gathered through data analysis but delivering that information to the physical branch in real-time can be difficult.
"When implemented correctly and compliantly, personalized experiences resonate with consumers,” says MasterCard Data & Services. "Using insights from across their portfolio, banks can form a single view of the customer in order to try different personalization strategies in an effort to find the ones that resonate most.”
Technology for Branch Employees
Branch staff must be equipped with the tools and training necessary to deliver personalized services effectively. For example, an employee equipped with the right software and a portable computing device, such as a tablet, could draw up information about specific customers in an instant.
This capability could be combined with AI to give the employee answers to inquiries, suggested products and services, or an analysis of the customer's or member's financial profile. This enables customer-facing staff to provide customers with personalized attention and interact with them on a more personal level.
Achieving True Omnichannel Integration
An effective omnichannel integration strategy is crucial for banks and credit unions to provide a seamless customer experience across all touchpoints, including branches, digital platforms, and other channels. This approach enhances customer satisfaction, increases engagement, and strengthens long-term relationships.
A Holistic View of Customers and Members
Implementing a successful omnichannel strategy requires a holistic view of the customer journey. Banks should ensure consistency in messaging, branding, and service quality across all channels. For instance, a customer should be able to start a loan application online and complete it in-branch without any disruption or need to repeat information.
This seamless transition between channels is vital for customer convenience and satisfaction.
Data integration plays a pivotal role in omnichannel strategy, as it is a key component to creating a holistic view of customers and members. By leveraging customer data from various touchpoints, banks can gain comprehensive insights into customer behavior and preferences. This information enables personalized interactions, whether the customer is using mobile banking, visiting a branch, or contacting a call center.
For example, if a customer frequently checks mortgage rates online, branch staff can be alerted to discuss home loan options during their next visit.
Branch Technology Investments
Technology investments are essential to support omnichannel integration. Banks should focus on implementing robust Customer Relationship Management (CRM) systems, cloud-based platforms, and AI-powered analytics tools. This is not only true of large banks, but also regional and local banks as well.
"The local bank branch, with its traditional teller windows and long lines, will transform into an AI-infused, customer-centric financial services center, aiming to beat the big banks on the service that AI will allow them to provide customers,” says a report by CNBC. "[…] Employees would be freed to help customers reach their financial goals and not be stuck answering basic questions about recent transactions and account information.”
These technologies enable real-time data sharing across channels, facilitating personalized experiences and informed decision-making by bank staff.
Branches themselves must also be transformed with technology to apply the same level of personalization on digital channels at the branch level. Modern branches should be equipped with digital tools that complement online and mobile banking services.
For instance, interactive kiosks can provide self-service options for routine transactions, while staff can focus on more complex customer needs and relationship-building activities.
Staff Training
Finally, training staff to effectively operate in an omnichannel environment is crucial. Employees should be knowledgeable about all available channels and capable of guiding customers to the most appropriate one for their needs.
This includes understanding how to access and interpret customer data from various touchpoints to provide personalized service and advice.
By implementing a comprehensive omnichannel integration strategy, banks and credit unions can create a cohesive and personalized banking experience that meets the evolving expectations of modern customers, ultimately fostering stronger, long-lasting relationships.
Building Trust and Engaging Communities
Building trust and fostering community engagement are crucial aspects of developing long-term customer relationships in banking. Branches play a pivotal role in this process by serving as tangible representations of the bank's commitment to the local community.
Building Trust with a Personal Touch
Trust is the foundation of any strong banking relationship. According to one study by Accenture, 67% of respondents appreciate the presence of bank branches in their neighborhoods. This physical presence symbolizes stability and accessibility, which are key factors in building trust.
Branches provide a space for face-to-face interactions, allowing customers to develop personal relationships with bank staff. These interactions are particularly valuable when dealing with complex financial matters, as 63% of customers prefer branches for solving "significant and complicated financial problems,” according to Accenture.
Building Bonds with the Community
Community engagement through branch activities can significantly enhance a bank's reputation and customer loyalty. Banks and credit unions can leverage their branches to host financial literacy workshops, sponsor local events, or provide meeting spaces for community organizations.
These initiatives demonstrate the bank's commitment to the community's well-being beyond just financial services.
Banks can also use their branches to demonstrate their commitment to social responsibility and sustainability. This could involve showcasing the bank's environmental initiatives, highlighting partnerships with local charities, or offering specialized products that support community development.
Such efforts can resonate strongly with customers, particularly younger generations who often prioritize socially responsible businesses.
An Evolving Relationship Between Financial Institutions and Those They Serve
The relationship between financial institutions and consumers is a multifaceted and evolving dynamic that forms the foundation of modern banking. While the core relationship remains that of debtor-creditor, the scope has expanded significantly to encompass various roles and services.
As banking continues to evolve, maintaining strong customer relationships becomes increasingly crucial. Banks must balance the efficiency of digital services with the personal touch that branches provide, recognizing that customers still value having physical bank locations in their communities.
By focusing on personalized experiences, omnichannel integration, and community engagement, banks can foster the trust and loyalty necessary for long-term customer relationships.
To learn more about the future role of branches in building relationships with customers and members, don’t miss the next Future Branches event. It’s happening at the Austin Marriott Downtown in Austin, Texas from December 3rd to December 6th.
Download the agenda and register for the event today.