Over the years, branches have evolved from outmoded, time-consuming places to modern, digital centres that offer more efficient banking experiences to customers. However, now might be a good time for banks to slow down their investment in bank branches and their tech and start to shift their focus onto other channels.
GlobalData’s 2019 Banking and Payments Survey found that 74% of Europeans who visited their bank branches were satisfied with the service provided. This was 12 percentage points higher than those who opted for their bank’s call centre.
Therefore, banks aiming to improve their overall customer satisfaction should invest money into improving their call centres, particularly as this channel is the biggest weakness for many companies.
Tech spend in bank branches: a waste?
Another reason why banks might question their continued spending on bank branches is that they are not regularly used by customers. The same survey found that 53% of Europeans never or rarely visit their bank branch. With just 11% and 10% of respective survey respondents rarely using online and mobile banking (and no respondents whatsoever choosing to avoid either channel entirely), branches appear to be considerably less useful for user connection than digital channels.
With this in mind, banks should focus more on improving the quality of their online and mobile banking applications. Failure to do so could result in users switching to a bank with a better digital presence, as for many this is their main point of contact with their bank.
However, bank branches remain important for customer acquisition. A sizeable 42% of Europeans’ preferred channel for lending applications (credit card, loans, or mortgage) was through a bank branch. As this channel is typically the main driver of profit, banks could still utilise branches to improve customers’ onboarding experiences. In this age of increasingly confusing financial management, much can also be said for the more personalised, human services that branches usually offer compared to mobile and online.
Instead of merely matching the digital capabilities of other channels, branches should be optimised to offer different services to those offered online, such as improved onboarding processes, in order to make them more appealing.
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