Banking
BRANCHES ARE STILL KEY IN BANKS’ MARKETING MIX

Putting aside the financial turmoil of recent years, the passage of time has been generally kind to many of us in terms of banking service and convenience. When I was a boy, we had to go to the bank to withdraw money; cash we’d have to use to pay for almost everything, cash for dad’s wallet and cash to slot into many payment books. These days it might appear many of us hardly use branches: we get cash from ATMs, make payments and arrangements through direct debits and internet banking, and we can compare hundreds of insurance offers in moments. And yet, banks seem to be failing to realise the potential power of the branch.
Recently, the world’s local bank – of which I’ve been a customer for close to 20 years – eventually persuaded me to come in for a financial health check. I was asked to ensure I had all documentation with me so we could have a productive meeting. Interested in moving my mortgage and open to other ideas, I took the morning off work to go into the city centre branch. Five minutes later I was walking out having had my direct debits read out to me to make sure they were still valid. I walked back in to tell a supervisor I was confused and disappointed and they assured me they’d ‘look into it’ – they didn’t.
We all have our own preferences for how we do things. Some may be open to switching mortgages online; some may be averse to getting a house insurance quotation. But if the branch is for anything, surely it’s to provide the personal touch, the fabled ‘corner shop’ experience, where all the insight, all of the data is right there, unfettered by email exchanges, display ads, poor telephone connections etc. Surely, whether a small, perhaps rural branch or a large city centre branch, their role is to be the flagship experience, retention magnet and cross-sell kernel of their customer experience marketing.
The branch needs to be an integrated part of that customer experience and journey. Banks and insurers have moved with the times in some marketing areas but what of the branches? In the summer, a study revealed that 40 per cent of UK bank and building society branches have closed since 1989. The findings from academics at Nottingham University cited 7,500 shutdowns in that period; just recently Barclays announced the closure of branches and the loss of 1,700 jobs. Banks seem to think it makes great business sense, and some research including our own would tend to agree with their findings, but the situation is more complex.
Such is the pace of change in the brave new world of contact centres and digital marketing that it’s perhaps understandable banks continually review their branch portfolio in the context of their overall customer touchpoints. Perhaps time-poor consumers would agree that face-to-face banking is less relevant in the digital age. However, scratch the surface of customer contact preferences, and a very different picture emerges.
To understand how people want to communicate with their bank, we analysed extensive data collected on behalf of our clients in the financial services industry (as well as to enhance our own database of UK consumers). This amounted to around 130,000 responses. The headline finding may well be a surprise: more than three-quarters of people (77 per cent) say it’s still very important to have a local branch.
Meanwhile, we can see which demographics prefer to bank in-branch. For example, four in 10 under-30s say a local outlet is of little or no importance, but just one in 10 over-65s feels the same. That should come as no surprise given the greater likelihood for younger demographics to embrace digital banking.
Meanwhile, London-based customers place the least importance on local branch availability, with a quarter saying it is of little or no importance. Out of this group of people, 75 per cent prefer to do their banking online and the remaining 25 per cent interact over the phone. In terms of regions most reliant on branches, respondents based in Wales showed the highest propensity to regard face-to-face communication as important.
Further examination reveals a disparity between different income bands and the need for local branches. Those in the highest earning category (annual salary of more than £150,000) are six times more likely to say having nearby access is not important than those on incomes of £20,000 or less. Perhaps the cross-sell opportunity in branches isn’t so high after all? It’s even possible to split out channel preference – and also interest in branch banking – by occupation. Some 81 per cent of manual workers describe branches as their favourite method, with 15 per cent citing online and just 4 per cent phone banking. In contrast, branches were viewed as the most important by 55 per cent of senior managers, while 38 per cent rated online highest and 7 per cent phone banking. Even so, among all age groups and occupation types branches were ranked as top choice for banking, and by some distance.
So what does all of this information mean for banks? Put simply, regardless of differing preferences by demographics, three out of four customers still clamour for the personal touch; there is enormous interest in having access to a local branch network. But the learnings from the statistics go beyond that headline. People who enter high-street banks do so in the main for help with their current account or mortgage. Yet the opportunities to cross- and upsell other products to them shouldn’t be ignored, particularly when they are face-to-face with a customer adviser.
Banks must see their branch as a fully integrated part of the marketing mix and need to integrate customer data across this and all touchpoints to avoid a schizophrenic brand experience. Armed and informed with the right insight, created themselves and through third-parties, bank staff can have a much more personalised conversation which is far more likely to be helpful for the customer, but will also make selling wider services easier; it will feel less ‘bolted on’.
Understanding the customer, and where they are on their journey, whether you’re dealing with them through a contact centre, online or face-to-face, is crucial; especially if they are to avoid the negative experience I encountered, despite being a long-standing customer.
Recently, the UK government introduced new rules that force banks to allow any customer who want to switch provider to do so in just seven days. Now that moving finances really is as easy as 1-2-3 there can be no greater incentive for banks to make sure their customer marketing experience is up to scratch.
By Jed Mole, European Marketing Director, Acxiom
Banking
Over 60’s turning to digital banking up by 90% during pandemic

More than 90% of people aged over 60 have used online banking for the first time during the Covid-19 pandemic, according to a poll by iResearch Services, highlighting the importance of banks getting digital right in 2021.
In comparison, 17% of people aged under 30 said they were accessing services via an app or web browser for the first time.
The findings show how banks must adapt to help service the influx of new digital users and gain their trust, accelerated by the Coronavirus pandemic. With 97% of 18–24-year-olds trusting their bank with their data, compared to only 33% of people aged over 66.
Commenting on the findings, Gurpreet Purewal, Associate Vice President, Thought Leadership, at iResearch, said: “Our study demonstrates the lasting impact of Coronavirus on how people will access banking services from now on. Banks will be required to refocus on really understanding customer needs in order to engage with the different requirements of each individual customer.
“More than half (54%) of respondents said they are less likely to attend a physical branch after the pandemic. This demonstrates a seismic shift in the way people will access banking services now and into the future.”
In other findings, 63% of respondents said their bank acted in their best interests during the pandemic, but a third said they would consider switching their bank for better, more personalised communication.
Purewal added: “On the whole, High Street banks have emerged with great credit from the pandemic for the way they have supported their customers. As the economy rebuilds, it will be more important than ever that they communicate in the right way to help consumers through 2021 by leveraging digital platforms and understanding their needs fully.”
Asked how banks can improve their communication with customers, ‘connecting on a personal level’ ranked highest, followed by ‘more honest and open dialogue’, a ‘demonstration of how they are helping customers’, ‘more creative campaigns’, ‘consistent messaging across channels’ and finally ‘responsiveness to major events’.
Banking
Banking on the cloud to create a crucial advantage in financial services

By Rahul Singh, President of Financial Services, HCL Technologies
Once considered a revolutionary technology, cloud is now at the heart of agile and innovative businesses. The financial services industry is no exception, and has been a major adopter of cloud-based Software-as-a-Service (SaaS) for its non-core applications. Functions such as customer management, human capital management, and financial accounting have progressively shifted to the cloud. Several banks have also warmed up to using cloud for services such as Know your Customer (KYC) verification. IDC analysts say that public cloud spending will grow from $229 billion in 2019 to almost $500 billion by 2023, and a third of this will be spent across three industries: professional services, discrete manufacturing, and banking. The time is ripe for an increasing number of financial services providers to consider moving more of their core services to cloud.
Adoption is already on the rise
Earlier reluctance to move core activities to the cloud has softened, and many banks have put strategies in place to migrate services, including consumer payments, credit scoring, wealth management, and risk analysis. This significant change is driven by factors such as PSD2 and open banking, which require secure and cost-effective data sharing.
Regulators too were once cautious in their approach to cloud technology, but this is also changing. The Australian Prudential Regulation Authority (APRA), for example, whilst acknowledging the risks associated with cloud, also recognised the risk of sticking to the status quo. ARPA trusted the enhanced security offered by the cloud, and updated its cloud-associated risk advice. Wisely, APRA recommended that banks must develop contingency plans that allow cloud services to be provided through alternate means if required.
Rising pressure from new challengers
The other pressure for incumbent banks is from next generation fintech firms. These are cloud-native organisations, and are able to onboard customers remotely in minutes, roll out new services in days, and meet compliance requirements at lower costs.
As a result, the need for traditional banks to upgrade core systems and integrate the latest technologies is stronger than ever. The COVID-19 pandemic has been an additional driver, highlighting the importance of upgrading and migrating core systems to the cloud. Financial services organisations have been forced to rethink their approach to digital transformation, and pay special attention to a cloud-aligned culture. The industry is recognising how the cloud can address new and ongoing regulatory changes, meet different demands from customers, support the roll-out of emerging technologies, and enable incumbent providers to respond to the relentless competition from fintech firms.
New year, new priorities
As we enter 2021, financial services providers will need to reset their priorities, and go beyond using the cloud for scalability and cost efficiency alone. The new areas to focus on will include:
- Creating a robust digital foundation: The cloud market is expanding fast, and there is an ever-increasing number of services on offer. Whilst the big three hyper-scalers are the obvious choice, various other players are also gaining traction, such as IBM, Oracle, and Alibaba Cloud. Organisations will need a robust digital foundation to adopt cloud at scale in a secure and compliant way. A well-architected digital foundation, supported by resilient operations, ensures that organisations have continued access to their systems and data, regardless of where employees are located, or what device they are using.
- Adoption of technology platforms: Enterprises are finding ways to reduce complexity by embracing a platform approach, and increasing the speed of business IT consumption. Physical infrastructure is being abstracted into cloud-based platforms, with data consolidated into data lake platforms. Software products like Apigee are being offered as capability platforms to drive better analytics and intelligence.
- Enhancing IT security: Cloud offers organisations greater security than on-premises servers, if implemented correctly. Financial services organisations have relied on control and compliance-based security for years, but these practices are increasingly vulnerable to cyber threats. Whilst service integrators create robust cybersecurity solutions for financial services organisations, cloud providers are also looking to provision industry-specific security and regulatory measures like end-to-end data encryption – making it easier for financial services organisations to be compliant whilst migrating to cloud.
- Driving innovation: Cloud is the fundamental factor behind the ability of fintechs to innovate rapidly. Using cloud, financial services can leverage new technologies and tools like augmented reality (AR), virtual reality (VR), natural language processing (NLP), machine learning (ML) and the Internet of Things (IoT) to unlock new processes that improve customer interaction and experience with portable real-time services. Whilst fintechs have led the way in cloud-based innovation through open banking platforms, some of the leading banks are also adopting cloud to simplify their business processes, including KYC as a Service, to enhance customer experience.
- Enterprise synchronisation: Effective collaboration, both internally and with external partners, is crucial to success in the ever-expanding financial services ecosystem. Cloud allows businesses to integrate collaboration through shared tools and platforms. This is a critical ability as it leads to faster decisions and improved innovation cycles.
Legacy systems hold banks back from improving revenue generation and restrict their ability to build a responsive and resilient business. Cloud is a key factor in the success of challengers: traditional banks have no time to waste in migrating their core systems to cloud and building a secure future.
Banking
State of the Industry: optimism high in global financial services, although some key issues cause concern

- Exclusive research from Barclays Corporate Banking reveals the views of financial services leaders from across the globe on a range of key issues
- Recovery from Covid-19 is a key priority for FinTechs over the year ahead, however their number one aim shows the optimism in the sector: focussing on business growth
- Asia-Pacific may be the new focal point for expectations around Open Banking, with interest from Europe dropping year-on-year
- Firms confidence in their own cybersecurity fell 5% versus 2019, with less than half of respondents (42%) feeling satisfied with their own approach to the issue
Key players in the financial services industry are optimistic about the year ahead, according to a new ‘State of the Industry’ report from Barclays Corporate Banking, Alive to Opportunity.
Exclusive research from the bank also highlights regional differences in approaches to regulation, expectations for payment innovation and confidence in cybersecurity.
Optimism for 2021
As the official insights partner of last year’s Money 20/20 global conference series, Barclays conducted a survey of over 200 financial services leaders from across EMEA, the Americas and Asia-Pacific. From these senior executives, Barclays Corporate Banking found that optimism in the sector is high as it enters into 2021.
Whilst recovery from Covid-19 might be seen as a likely top priority for the coming year, it came in second place when respondents were asked what they would be focussing most on during 2021 – with 42% of leaders selecting it. Top spot instead went to ensuring business growth, with nearly three in five (57%) respondents picking it as their main area of concentration.
Commenting on this trend, Phil Bowkley, Global Head of Financial Institutions Group, Barclays Corporate Banking, said:
“Given that 2020 was such a tumultuous year, it is encouraging to hear FinTech businesses are confident and focused on future growth. Many firms have grasped the upheaval of the global pandemic as an opportunity. Covid-19 has driven a huge surge in ecommerce and cross-border business. This has significantly increased flows across FinTech payment providers, which have worked hard to enable cross-border trade, payments and ecommerce. At the same time, the industry has been collaborating with banks to ensure much-needed financial support from government flows to the real economy.”
Regions back themselves on innovation
In a continuation of a trend seen in 2019, respondents often rated their own region as the most likely source of future innovation. This ‘home’ bias was particularly strong in Asia-Pacific, where China, India, Japan and Southeast Asia together claimed over 83% of regional votes when considering the key sources of innovation over the next five years.
However, China’s reign as the most likely site of financial services innovation did not continue from 2019, with Barclays’ most recent survey showing that nearly one in four (24%) key industry leaders now view the United States as the most probable location for the rise of payment innovation over the next five years.
A shift eastwards for Open Banking?
Barclays’ research also suggests that Asia-Pacific may be the new focal point for expectations around Open Banking, with interest from Europe dropping year-on-year.
In 2019’s report, the impact of this key regulation was anticipated to be strongest in Europe – however, this time round just 38% of EMEA leaders now expect Open Banking to have a big impact on their business. By contrast, the majority (59%) of senior respondents from Asia-Pacific feel that the regulation will be key for their companies as we move into the remainder of 2021.
Security and resilience in a post-Covid world…
Firms’ confidence in their own cybersecurity dropped by 5% versus 2019, with less than half of respondents (42%) feeling satisfied with their business’ approach to the issue. Businesses in EMEA feel least confident about their security provisions, with one in three (33%) indicating that their own cyber security needs further investment.
The importance of resilience to customers was also a theme that many felt would rise in significance in 2020, given the recent growth in remote working as a response to Covid-19 – however just 5% of respondents viewed this issue as important when considering customer loyalty.
Steve Lappin, Managing Director, Barclaycard Business, said: “From remote working to e-commerce, coronavirus has meant that digital channels play a much greater role in working life. While this has undoubtedly presented new opportunities, it has also put additional pressure on infrastructure and heightened potential vulnerability to attacks. Therefore, it’s not surprising that confidence in cybersecurity has dropped, with many firms feeling that their rapid adoption of these new channels has left governance and control lagging behind. It’s critical that businesses remain vigilant – security may not be a key driver of customer loyalty, but cybersecurity issues are definitely a driver of disloyalty.”