23 March 2018

Alex Noble

Alex Noble - McAfee

54Posts 303,454Views 21Comments
Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.
A post relating to this item from Finextra:

Mobile becoming consumer's 'channel of convenience' - Halifax

08 May 2015  |  8299 views  |  2
The UK's Halifax Bank is reporting "monumental growth" in mobile banking, registering a 100% increase in the number of logins via mobile in March 2015, as handheld devices far outstrip the desktop as...

Customer insight, election polling and why don’t branches have more success in customer surveys?

13 May 2015  |  2840 views  |  2

Current customer experience research shows that (whenever asked) consumers state that they like bank branches and prefer banks with branches.  Yet the evidence of their behaviour and mobile adoption rates suggests otherwise.

Obviously, there’s a parallel here with this month’s UK general election, where the result predicted by the polls did not match what happened. The gap between what pollsters understood to be voters intentions and their actual behaviour was uge. (For overseas readers, the BBC has good analysis HERE and HERE of why the UK polling industry predicted the result of the national electionso wrongly).   Is something similar happening in banking? Do we either have shy customers who won’t confess their love of branches? Or do we have the opposite, that the research is overstating a preference for branch when in fact consumers only use branches through lack of other alternatives?

Last month’s Finextra story: “Digital challengers face tough times as consumers cling to branches” is evidence that significant numbers of consumers still see significant value in branch.  Mobile technology, especially smartphones, is driving change but at the same time there are still consumer demographics that have both loyalty and need for a branch.

Furthermore, many of the bankers that I speak to are very conscious that branches are one defence against the disintermediation that comparison sites have brought to the insurance industry. The world of enabled UK current account switching and PSD2 is one where banks are losing many traditional control points. The more strategic banks have seen what comparison sites have done to the UK insurance industry and they don’t want to be left with the costs of back-end systems while more agile new entrants cut them off from their customers.  I’ve blogged about this in the past on Finextra (see “Aviva, offshore and the threat of the web comparators” ) and since I wrote that if anything the risks for the banks have increased.

Meanwhile, despite the clear risks, the banks are struggling to get decent data on what channels customers truly prefer and will prefer in the future.  My suspicion is that some of this is due to the way consumers perceive channels and some is due to the way in which onsumers are surveyed (…much like the polling problems in UK politics!).

Contact centre (for example) is often seen as unglamorous, the home of gruesome IVR menu queues (“press 1 for a longer wait…”, etc….) and causing customer frustration.  When asked about “contact centre” that experience is what many consumers think of.

Yet remote service to complex issues, provided 24hrs a day and initiated by an interaction on a mobile device is almost certainly the future for many parts of financial services, not just banking.  Looking at this week’s Nunwood customer satisfaction figures for UK brands,  it is striking that it is First Direct, a contact centre led banking brand that has come first.  

In a piece of consumer psychology work I’ve done, I've found that consumers associate “contact centre” with their more gruesome customer experiences. Yet when asked to describe an outstanding piece of customer service, they often choose an experience that is service by a contact centre  – they just don’t tightly associate that excellent service with the channel through which it was delivered!

Similarly, while a bad branch experience in the UK can be pretty awful that doesn't mean branches are bad or that mobile replaces them. The figures produced by Halifax Bank of Scotland last week may show that 2/3rds of on-line banking is now done via a mobile device, yet Halifax is still very cautious that branch still has a major role to play and customers want branches. The crucial distinction they make is that while mobile may be “the channel of convenience”, customers want branches for high-value interactions.  The new TSB bank feels similarly.  In February they produced a very public and very robust defence of branches in their document “Why branches matter in a digital age”. This well researched 12 page document is very clear that for many consumers, face to face advice is what they look for before purchasing complex products. Nationwide Building Society has taken a similar view (see “Nationwide extends video banking to a further 100 branches” on Finextra), and is rolling out Cisco video technology to ensure it can provide expertise in branch when customers walk-in. Branches matter to these organisation and they see the branch as a competitive differentiator.

I short, I think customers do want branches where they get the experience they expect and for where they have complex interactions. The challenge for surveys is that customers file that under “good service” and then put the long queue at the teller counter under the heading “branch”.  This doesn’t meant that mobile isn’t the future for many interactions (the Halifax figures are very clear), but it doesn’t mean branch is redundant either.

TagsMobile & onlineRetail banking

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 15 May, 2015, 11:30

I don't see any paradox here. Customers simply like (or dislike!) multiple channels and if they select one channel today, it doesn't mean they'll reject all the other channels forever. It's only finsurgents and neobanks who think in terms of channel cost, "Borders" moment and "if you're not with us, you're against us".

Customers see different strengths for different channels and simply choose the one they find most suitable in any given context. From personal experience, assessment of suitability could also be very fluid: If I need to make a payment, I might choose Online Banking if I'm in the office having good Internet connectivity but choose to drop a cheque in the drop box at the branch if I'm in the neighborhood of the branch. I don't see any contradiction in any of this.

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Alex Noble
Alex Noble - McAfee - London | 15 May, 2015, 11:39

Ketharam, I completely agree that customers prefer a choice of channels and indeed need a choice of channels given the range of interactions they have with banks.  My interest is more that current research tends to ppint to consumers saying one thing and doing another, hence a bit of a paradox.

My suspicion is question bias in the research gathering methodology. Although I wouldn't use the terms "finsurgents & neobanks", I do agree that some of the research pointing to particular consumer use of channel is potentially biased by the agenda of the organisation that comissioned it!

Best wishes,


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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 15 May, 2015, 12:06


I was not hinting at any agenda-led bias. My point is more related to frame of reference and a limitation in research methodology. To continue with my example regarding method of payment / choice of channel, the way to evoke the full and correct answer is to frame the question thus: "If you're in the office with good Internet connectivity, which channel will you select for making a payment? On the other hand, if you're in your branch's neighborhood, will your answer be different?"

But not many MR agencies have the skills to recast this somewhat tricky question into a simpler one that captures the essence of the topic but can still be administered via their surveys. As a result, many surveys end up with simplistic questions masquerading as simple ones and we end up with snappy answers to stupid questions that sound paradoxical!

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I specialise in solutions for complex banking processes. Current areas I'm working on include Security, contact centre, improving compliance and digital transformation. Previously, I've worked...

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