This 2-part blog series will explore the reasons mobile technology will be the key to redefining the branch experience in the coming years. Today, most people under the age of 60 will do just about anything to avoid going to their actual bank branch—unless you count stopping at the drive-thru ATM. But even this is at risk with the emergence of peer-to-peer payment services (e.g. Venmo, Apple Cash) further eliminating the need to carry cash.
Let me share a few stats, if the scope of the trend away from Bank Branch isn’t already totally clear:
- The number of branches in the U.S. shrank by more than 1,700 in the 12 months ended June 2017, the biggest decline on record, according to a Wall Street Journal analysis of federal data.
- Total teller transactions are declining by 7.5% annually.
- More than 25% of all deposits are now done via smartphone, according to Bank of America.
- “Millennials largely reject the banking experience their parents and grandparents embraced. They’ve abandoned the relationship-based, retail branch experience in favor of online banking. They largely distrust traditional banks, opening the door for a rash of disruptive fintech startups. Nearly 75% say they’d be more excited by a financial offering from Google, Apple, PayPal, or Square over their nationwide bank, according to a survey by Scratch, a subsidiary of Viacom.”
But the end of the Branch doesn’t have to be an inevitability. Nor does the end of personal relationships with your customer.
Most banks and financial institutions have focused on a move towards consumer self-service and have invested a lot in the mobile apps and services they provide customers. But these mobile apps provide great levels of convenience for mundane activities, like cashing checks and paying bills. Don’t get me wrong, taking a picture of a check to deposit it is the single greatest feature of my BofA app. But that feature is a temporary advantage and does not drive long-term competitive advantage.
More importantly, it has absolutely zero impact on whether I deepen my relationship with the bank. Whether I establish a Home Equity Line of Credit with BofA, open up an investment account or partake in any of the other services I probably don’t even know they offer is absolutely not influenced by the quality of their consumer app. Although in truth, if their app lacked these convenience features, I’d probably switch to a banking institution that had them.
What might deepen the relationship I have with my bank? A mobile app (or apps), in the hands of my banker or financial advisor that would help them establish a personal relationship—and a sense of trust—with me. Banks and Investment firms need to take a (dare I say) “mobile-first” approach to their employees to empower them to better engage with customers and literally meet them where they are—in the home or at the local coffee shop—rather than insisting we go out of our way to make their way to the Branch.
Mobile is a foundational part of a larger digital strategy—often the primary interface for both customer and Financial Advisor—and is to be leveraged when the situation calls for it and when it matches the client’s preferred channels.
- Bankers and Financial Advisors should know which clients to contact and when. New regulations that require annual client reviews, check a box, but don’t help when something changes—either in the market or our customer’s life—these require immediate action.
- Mobile helps Bankers and Financial Advisors deliver more consistent and timely communication. Rather than rely on manually-driven communications, advisors will be alerted to these moments via machine-learning or event-driven triggers, often via push notifications on their mobile device. Advisors will still call the plays, but they’ll have a playbook to guide them.
- Similarly, mobile devices help us target new ways to improve interactions to meet evolving customer preferences, and thus increase engagement, satisfaction and retention.
Let’s dig a little deeper.
Mobile is the Face of Digital Transformation
As much as “Mobile First” is misunderstood, “Digital Transformation” may be an even more fraught term. In short, Digital Transformation is about moving away from paper-based processes and disconnected systems. It’s about boosting productivity by increasing the completeness, accuracy and timeliness of the information folks need to do their jobs. This allows organizations to better serve customers, be more productive, and make better use of company personnel and resources.
As the below graphic explains, mobile devices are the primary interface for much of the company data and operations from Digital Transformation initiatives. Why is that?
- The Deskless Worker: According to an Emergence Capital report, 80% of the workforce is estimated to be “deskless.” Now, this often refers to salespeople and field service personnel, but generally describes the HQ/Total Employee count ratio. While Edward Jones does not have those roles, per se, the split between HQ and Financial Advisors is similar. A majority of the FA’s also do much of their work outside the office and could be doing even more.
- Second-Screen Experiences: For better or for worse, people use their mobile devices all the time, often as a way of multi-tasking. Sometimes we use our phones while watching TV. But increasingly at work, people may actively use their desktops, but go to their phones to perform other activities (e.g. checking email, addressing a notification). Our devices have become ingrained in both our personal and professional lives.
- Completing the Work Requires Multiple Systems: Tying together data within enterprise systems, and breaking-down organizational and system silos, is one place mobile shines. This is often the singular problem companies face when reengineering business processes to unlock workforce productivity.
The Branch Doesn’t Have to Die, But It Does Have to Change
To deal with these trends, banking and financial services are making significant investments in the technology they provide customers and employees. Some are making dramatic changes to their retail banking environments, eschewing teller lines with advisors sitting behind a large desk for more conversational, lounge-style environments. Capital One has taken that to the extreme with their Capital One Cafés. Instead of meeting clients at a Starbucks, they have essentially brought the barista experience to the branch.
That’s it for now. Stay tuned for Part II, which will discuss Guiding Principles for Mobile Innovation in Financial Services. If any of this has sparked some interest, and you want to learn more about how you can make these concepts a reality in your company, please feel free to reach out to us, or contact me directly at firstname.lastname@example.org. We’d love to help you get started.