Physical branch visits are declining so the “digital” branch is now the primary way customers interact with your bank. In fact, Digital Insight data shows that people who bank online and via their mobile and tablet devices log in about 29 times a month and are more profitable to a financial institution than those who don’t bank digitally. With mobile device adoption skyrocketing globally, these are now a banker’s most valuable customers. Still, traditional brick and mortar branches remain a good means for financial institutions to forge strong customer relationships.
Digital Insight and Andera recently announced a partnership that will give financial institution customers the ability to open, fund and use new accounts and loans from a mobile device. Banking.com recently sat down with Robert Cameron, product manager, at Digital Insight and Ying Chen, senior vice president, product management at Andera to discuss how this type of innovation could change the bank branch of the future.
Q: Physical branch visits are on the decline. If consumers can open accounts from their mobile devices, how do you think this will change the branch of the future? What do you envision the bank of the future looking like?
Robert Cameron (RC): In today’s digital environment, bankers must also reinvent the physical branch experience to make branches more compelling, efficient places to visit. Enhancing the branch with tablets and computers to include leading edge, self-service capabilities that elegantly solve customers’ most common banking needs – deposits, transfers, digital banking sign-up, loan origination, new account opening and other tasks – will free up physical branch staff to concentrate on more profitable opportunities like providing data-driven insights, selling more profitable and complex products or services and deepening your most important customer relationships.
Ying Chen (YC): The rapid adoption of tablets and smartphones means that consumers can now do their banking no matter where they are, and it means they don’t have to rely on other devices to get through the process. The built-in camera and touch screen functionality on mobile devices makes applying for new deposit accounts and loans easier than ever. Applicants can now snap a quick picture of a supporting document instead of searching for a fax machine or mailbox, and they can sign their documents by signing their touchscreen devices with their finger or a stylus.
When we envision the future of banking, it’s important to remember that the things that banking consumers need to do today – getting new accounts and loans, paying bills, depositing and withdrawing money, etc. – are the same things they needed to do 20 years ago. What’s changed is that there are more ways than ever to get those things done. While some institutions will succeed by deepening relationships via one-on-one interaction in branches, others will succeed by attracting consumers who prefer to do all or most of their business via self-service channels. This is evidenced in our base of over 550 customers – some of our best performing clients acquire most or all of their new accounts and loans via the online channel while others are finding great success with branch-centric or hybrid models.
Q: Above you discussed the bank branch of the future. With the digital branch becoming more prevalent, what can banks and credit unions do to strengthen relationships with customers or members when they do visit a bank branch?
RC: Let’s take the use case of applying for a loan, which, let’s face it, is filled with mundane tasks: data entry, form filling, box checking, document capture, etc. The good news is mobile devices are making these tasks simpler and more efficient than ever. Spending less time here means that, as the financial institution, you can spend more time doing what you truly care about—ensuring that the member or customer has all of the product, services and support that they need.
YC: When customers and members want face-to-face interaction, it’s not ideal to interact with someone behind a teller window or from behind a computer monitor. Technology is enabling branch representatives to have richer and more natural conversations with applicants. Instead of being trapped behind a desk or computer, representatives can float freely around the branch and sit next to customers and members who need help. Instead leaving new account and loan applicants to make copies of supporting documentation, representatives can use their tablets to snap photos of documents on the spot. And instead of walking customers and members over to a signature pad to finish the process, applicants can sign their documents simply by signing the tablet screen with their finger or a stylus.
Again, it’s important that we don’t just view technology as a way to reduce the number of human interactions because technology can also be used to improve the way humans interact with each other, and often this results in greater operational efficiencies. In fact, we have seen places where customers leveraging our oFlows platform in branch have been able to reduce the time it takes to open a new account from 45 minutes to 15 minutes. That’s better for customers and members, and for the employees who serve them.
Q: Digital Insight data shows that people who bank online and via their mobile and tablet devices log in about 29 times a month and are more profitable to a financial institution than those who don’t bank digitally. For banks and credit unions that have a large contingent of non-mobile users, what is your suggestion to help them transition more customers or members onto mobile devices?
YC: Yes, we know that consumers who choose to apply for accounts and loans in branches tend to rely on branches for routine banking business. In contrast, those who choose to apply online continue to show preference for digital, self-service channels later. While you can’t force someone to embrace self-service options, you can certainly help them appreciate the benefits through frequent communications that address their concerns and through incentives that help nudge them in the right direction. We also see clients who have great success in driving online/mobile adoption because they’ve structured their products to attract people who strongly prefer to do their banking online and via their mobile devices (e.g., they require direct deposit and online bill pay). Again, this is why it’s so important to know who you’re trying to attract and to build products, service approaches and advertising strategies with that end goal in mind.
RC: When you put tablets on kiosks and counters and give them to tellers—enabling them to get out from behind the desk—you create a digital branch environment that can transform the thinking of even the most staunch, non-mobile members or customers. Now, those people are accomplishing the same tasks that they always have, just faster, easier and with better customer service along the way. For example, sitting down on a couch with a branch representative and opening a checking account in less than 15 minutes through a joint interaction on a tablet is far from the expectation of being seated at a desk with a computer for 45 minutes or an hour. Customers or members will realize the power of mobile devices and how they can enhance their financial life outside the branch too.
Q: Gen Y and Gen X are heavy mobile users, and many of them do not visit bank branches. How will the digital bank of the future serve these users as they get older and have more complex banking tasks? Do you think bank kiosks will be able to take care of complex banking needs, such as getting a mortgage or a loan?
YC: While some institutions like Ally Bank, PerkStreet Financial, and Capital One 360 are very successfully acquiring new customers online, most institutions haven’t yet evolved their kiosks or websites to replicate the value that their customers and members receive from human interaction. This is why we see so many consumers researching products online and then visiting branches to make their decisions. For institutions that want to grow their self-service channels, this is less than ideal.
In the future, the most innovative institutions will take a hard look at the selling experience they’re delivering online and via kiosks and they won’t expect applicants to figure so much out on their own. Instead, they’ll build interactions that help guide the decision-making process while reinforcing the value of the products being considered.
RC: Your average Gen Y consumer may not visit a bank branch, ever. If they’re not already discovering and opening accounts at your financial institution through existing digital marketing channels like an App Store, online ads or SEM, then you have to be able to take the digital branch to them. That means being at events like college campus move-in days with tablets that allow them to open up new accounts immediately—no more fliers, pamphlets or email sign up lists. Better yet, ask them to pull out their own phones or tablets, download your app and start the account opening process from there. As their financial needs grow in complexity, so do your digital offerings; since their relationship is entirely digital, they will stay with your financial institution even as they graduate and move throughout the country.