There is a widening gap between Americans' digital expectations and what their banks are delivering, but firms that act to shape their use of technology to deliver personalised services could significantly boost their profits, research from Cisco suggests.
As customers rush to digital channels to carry out basic transactions, banks around the world have responded by reducing the size of their branch networks. However, most have decided to keep a substantial number of sites open in order to provide expert advice on complex products and services.
Speaking at the BAI Retail Delivery conference in Chicago this week, Gareth Gaston, EVP of omni-channel at US Bank was emphatic that the branch is here to stay. He argues that some European banks are now regretting chasing "fools gold" savings made by pushing customers to digital channels because they are missing the selling and revenue opportunities branches offer.
Some financial services firms, such as Bank of America, are trying to bridge the gap through the use of video conferencing technology that lets customers speak to staff face-to-face at any time. Javier Lopez Bartolome, president of the Americas and Iberia at Wincor Nixdorf says that this approach can help deliver personalised service, citing the example of BBVA Compass, where customers can choose to always speak to the same assistant over video.
Of 603 Americans surveyed by Cisco, 53% are interested in remote advice delivered outside of the branch. Of these, more than a quarter would actually move their money for video advice, with areas such as financial planning and stock picking the top areas of interest.
Cisco's MD of global industries, Paul Jameson, tells Finextra that this approach is beneficial to banks not just because customers like it and it cuts branch staff costs, but because it drives revenue by making sure that there is always someone available to assist customers looking to buy products. Customers now expect to be able to access services anytime, anywhere and will reject firms that do not meet their standards.
Cisco's economists claim that a bank with $10 billion in revenue could increase profits by $134 million by introducing video mortgage services and $131 million through video advisors. In the UK, Nationwide Building Society has seen its use of in-branch video links to mortgage consultants quickly pay off and is now expanding the technology to a range of other products.
Nearly two thirds of Americans say that they would move their money to a new provider for personalised Internet of Everything (IoE)-enabled services, in areas such as videoconferencing, mobile payments, branch recognition, smartwatches, and automated financial advice. By tapping into this and changing the customer-relationship model in the branch and other digital channels, banks could get a bottom-line increase of more than five per cent, says Cisco.
Says Jameson: "The Internet of Everything is rapidly changing the expectations of today’s consumers, and banking is not immune to those shifting preferences. While the demands of Generation X have influenced banking practices in recent years, this study shows that every age group is clamouring for the personalised, convenient and secure services that IoE-enabled banking affords. Retail banks have a great opportunity to shift their business models and deploy solutions that deliver these services to increase customer satisfaction across all age demographics as well as increase their wallet-share."