Running a bank amid the ongoing evolution of the financial industry can be quite challenging. Even so, banks can’t ignore changing consumer expectations. For branch managers uncertain about how to improve bank branch performance, we see several often-untapped opportunities.
In this article, we discuss common performance challenges for bank branches and how to improve customer experience, secure customer data, and attract new customers. In doing so, we hope to provide you with helpful strategies to optimize branch performance.
Common performance challenges in a bank branch
In recent years, digital banking has seen remarkable growth. And the COVID-19 crisis is now having a significant impact on branch interactions. With this in mind, banks need to leverage customer data to optimize bank branch performance.
Common issues that financial institutions face
Despite the unique opportunity before them, many financial institutions do not bother with collecting customer data. And even if they do, many of them still neglect to leverage it for business decisions. In fact, two-thirds of financial service organizations use customer data only “sometimes” or “infrequently.”
Data builds relationships. Understanding a customer’s income level, lifestyle, and recent life milestones can inform marketing strategies. Unfortunately, banking customer data lives in disparate silos separated from the branches that need this information.
However, giving this data to the right people is just one step toward making good use of it. Data needs to be organized and distilled into actionable information. But this presents a challenge of monumental proportions. As Wells Fargo’s chief data officer Zac Maufe stated, “We’re sitting on over twenty-eight Libraries of Congress.”
Problems that bank branches face
In tandem with financial institutions, bank branches have their own share of challenges. Lack of data from higher-ups ultimately impacts branch performance. This directly impacts how banks respond to consumer trends that suggest clients want banks to make better use of their data to offer targeted services.
Consumer expectations have risen higher than ever. And to meet those expectations, banking needs to move toward authentically building relationships with existing customers. After all, you are dealing with money—it’s personal!
Branch-level data can help your advisers provide a tailored experience for each customer. Showing you care about each customer experience will always go a long way in building long-term trust.
Performance challenges banks need to overcome
On a practical level, lack of data directly impacts the delivery of financial services.
Consider planning for peak times. At any given branch location, you want to avoid a long line of people waiting to meet with a mortgage adviser while you have overstaffed for other banking services. This demonstrates poor planning and also risks losing potential customers.
Customer data helps a branch manager schedule staff, and it also allows banks to evaluate the amount of time spent in customer-driven activity. Banks can track this information through video-based analytics or an integrated queue and appointment system.
Understanding lead time, wait time, capacity by location, and time of interaction can provide valuable insight on where to focus efforts. In addition, a branch network can use this information to evaluate individual branch performance.
In short, leveraging data to create targeted messaging should play an integral role in any branch strategy.
How to improve bank branch customer experience
Banks have a difficult time differentiating their products from their competitors’. In fact, many customers are more likely to switch banks due to bad customer service than to get a better deal.
Because of this, each bank branch should focus on differentiating itself by providing an excellent customer experience.
How bank branches can improve the customer experience
Personalization plays an integral role in a successful customer service strategy. As we have already mentioned, customers want banks to leverage their data to provide customized suggestions.
Not only is this good practice, but we also have seen case studies showing its financial benefits. One bank that implemented personalization grew by 20 percent over three years. Another institution saw a 30 percent sales spike after implementing similar targeting strategies.
The numbers don’t lie. Understanding the customer experience and thoughtfully analyzing each step of the customer journey will reveal a plethora of opportunities.
Just make sure you don’t request too much personal information! One-third of millennials have stated they have stopped or limited a business relationship because of personal data requested.
To avoid alienating customers, banks can focus on only collecting data relevant to the products they offer. Or instead, they can build trust to gradually gather customer data over time. Asking a few relevant questions in each customer interaction can help a bank gradually develop a better understanding of each customer.
Understanding why customers leave their banks
The average American sticks with their bank or credit union for fourteen years. However, the banking industry has made significant strides to streamline the process of switching accounts. Studies show that men primarily switch banks for lower rates and fees, while women prioritize branch convenience and customer service.
While banks have less wiggle room when it comes to fees, financial institutions have endless opportunity to optimize the customer experience. As banking becomes more omnichannel, each touch point provides an opportunity to engage and please customers.
On the flipside, if customers have recently switched banks to work with you, they are more likely to open additional accounts. This includes accounts for high-value products such as mortgage loans and home equity lines. In addition, these newer customers are twice as likely to open a new savings account than existing account owners.
By impressing new customers from the start, banks can help build many fruitful, long-term relationships.
Avoiding customer dissatisfaction
At the end of the day, customer experience depends on building solid relationships with customers. In fact, 80 percent of customer churn occurs with clients who do not have a relationship with their bank.
So to prevent customer churn, banks should gain an individual understanding of each customer—understanding how pivotal life events may affect each touch point. In addition, they should actively listen to what customers want. Our studies have shown that customers expect bank branches to continue improving in several areas, including the following:
- Time it takes to complete a visit
- Staff availability
- Prices, rates, and terms
- Range of products
In addition, bank branches can also provide multiple avenues to connect with their advisers. Given the international impact of COVID-19, banks need to prioritize creating new contact points now more than ever.
To meet customer needs, connect with clients via video appointments, digital banking, or scheduled in-branch appointments. Ensure each of these channels provides a consistent level of customer service.
These suggestions only scratch the surface of available opportunities. What is most important is to realize that modern customer service depends on accessible yet secure data for maximum effectiveness.
Making customer data more secure at a bank branch
At this point, we can all readily nod our heads in agreement that, yes, data is an invaluable resource. However, data security still remains a hot topic of concern—especially in banking.
Protecting consumer privacy
People trust their banks to protect their money and data. To maintain this trust, banks should always ensure they use up-to-date data security protocols.
The rise of fintech has created additional tension in regard to consumer privacy. Customers have welcomed the convenience of fintech products, but a consequence is that customer data now lives in multiple locations.
While no straightforward solution currently exists for this, banks have requested increased transparency from these products. Time will tell if fintech complies with these demands.
Ensuring the security of branch data
Data security needs to be prioritized from the top down. Banking leaders should ensure they have a dedicated team keeping up with security technologies. US federal law outlines security guidelines for financial institutions. While these guidelines allow for flexibility between branches, banking leaders need to ensure security across all locations.
How to protect customer data
Banks can also implement technologies and procedures that help customers protect their own data. These technologies include multifactor authentication, encryption, and transparent privacy policies.
However, banks should also train customers how to best protect their own data. This training not only helps protect both the bank and the customer, but it also provides another opportunity to build customer relationships.
How to attract new customers to the bank branch
Today, attracting customers to a physical location looks much different than fifty years ago. Now, digital banking allows anyone to open a new checking account with just a few clicks.
While this presents new challenges, customers still seek out bank branches for significant life events. With this in mind, branch managers should take steps to provide convenience to develop lifelong customers.
What do customers look for in a bank?
An October 2019 study showed that people choose new financial institutions based on four top factors:
- Convenient branches
- ATM network and deposit interest rates
- Ease of resolving problems
Surprisingly, mobile banking did not make the top priorities—even among young consumers. All generations see the value of having an accessible bank location for when they need face-to-face interaction for significant purchases. And we can also see that problem-solving remains a top priority.
As we will discuss in more depth later on, millennials particularly face certain financial hurdles. This provides an excellent opportunity for community banks to step in and act as the financial counselor for a generation that has many long-term concerns.
Attracting new customers through technology
Banking institutions have more opportunities than ever to create targeted, granular campaigns to reach new audiences. Understanding the life stage of each customer can inform messaging and placement of ads.
For example, members of Gen Z have only just started opening their first checking accounts and may soon have interest in a debit or credit card. On the other hand, many of the millennial generation have only just started getting married or buying homes.
Each of these generations obviously has different needs, so ensure your messaging caters to them. Again, tracking and evaluating customer data plays an integral role in targeted advertising.
Additionally, emphasize value-added services and excellent customer service. As we already mentioned, building relationships and customer experience can determine whether a client stays with a bank long term.
Optimize your bank branch by offering appointment scheduling. Host events and workshops on personal finance and answer questions in person. This both increases face time with clients and builds the invaluable customer relationship.
Attracting new customers to your branches
In order to attract the millennial customer, the banking industry should take the time to understand the priorities of this generation.
For one, millennials grew up during a national recession and face additional stress when it comes to money as a result. Unfortunately, this stress translates into 56 percent of millennials feeling like their financial goals are out of reach. And 55 percent state they do not have enough money to make ends meet.
This presents a unique opportunity for banks to step in to give stability and expertise to this generation. Banks can provide workshops, training, and resources geared toward future financial stability.
This level of communication can help clients feel more secure about their futures. It also provides an above-and-beyond customer experience and establishes long-term trust.
Additionally, banks should focus on building brand awareness. Retail banking brands can stand out to modern consumers by highlighting services that help clients reach their goals. So when a potential client decides to open an account, your brand should always come to mind.
The future of bank branches
The banking industry has a unique opportunity to empower branches with data and provide customer service excellence. By using data to build client relationships, bank branches can improve their performance and increase customer satisfaction. Want to learn more about the future of branches and how to level up your strategy? Check out these blog posts for additional information:
- How to create a virtual branch - Reimaging how your branches should run? Think virtual!
- Bank from anywhere - How to enable your customers to bank with you on their terms
- 3 ways financial institutions can level up their XRM strategy - How to step up your customer engagement strategy to improve customer lifetime value
Looking for ways to optimize your branch experience? JRNI creates appointment scheduling and queuing solutions for banks, credit unions, and financial institutions. Schedule a demo to see how JRNI can work for you.
About the author
The JRNI team is made up of product, customer, and technical experts who are focused on driving personalized experiences - for our customers, and for theirs. The JRNI blog enables us to dive into how retail and financial organizations can use personalized experiences to grow profitability, build stronger customer relationships, and drive customer loyalty.
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