How Automation Makes Retail Banking More Human

By Glenn Shoosmith, CEO of BookingBug

Glenn Shoosmith speaking at Digital-Banking 2015

There’s no doubt that technology is transforming banking. In a world where you can pay with your watch, transfer money from your mobile and open a bank account from your iPad, customers have fewer and fewer urgent reasons to visit retail banking branches in person.

Naturally, this evolution is having an impact on the role of humans in those branches too. In the next decade, it has been predicted that we will see two million jobs removed from the banking sector, largely in response to this trend.

For some, the shift has promoted a fear that banking will lose its human touch and may lose sight of the importance of incredible customer service. But, done right, there’s the opportunity to make this a strength, not a weakness.

Let me explain.

Transactional vs relational interactions

The vast majority of day-to-day interactions with the bank are transactional. They don’t require much knowledge to handle or process and, in fact, the less friction you introduce to them, the better.

These transactional interactions are a commodity. They are also some of the most vulnerable to competition, especially as the UK’s first challenger banks are now getting licenses and creating new ways to add value.

Take apps like Mondo, which pair your card with an app that instantly keeps a tally of your spending in various areas and brings new insight to your habits and budget. Or Acorns, which rounds up every transaction you make and donates those last few pennies into a savings account or investments. Areas of traditional banking are under threat from these newcomers, and this is only the start.

Harnessing human knowledge

What Retail banks should really be thinking about is how they can use their own advantages, including long established national and international branch networks, to offer something these competitors cannot.

Here’s where the more valuable, “relational” interactions with the customer come in. The highest value opportunities and the most important touch-points you have with your customers exist here.

Huge moments like mortgage applications and business loans require a human touch. And when transactional elements are handled by technology, you can hire and train people to deliver in this moment.

This is the real opportunity in retail banking. It marks a return to the branch as a place to seek trusted advice, not just a wasted lunchtime standing in a queue. Maybe it is even a party toward re-establishing the bank manager as a trusted advisor and pillar of the community

It’s hard to overstate the potential for the smart use of tech to enable smart use of people. But this only works if you bring it all together properly.

Omnichannel retail meets Unified banking

If apps and streamlined services become the most common way for customers to interact with financial institutions, retail banks must make it as easy to bridge the online/ offline gap toward the high value in-store services.

The good news is, this is exactly the same challenge that has been faced by retailers across the high street for many years. In that case, the question has been about the purpose of stores when online shopping offers such value, convenience and range.

This solution shows a similar reliance of humans alongside tech: asking the question of what they can offer that the internet can’t. This is how stores like John Lewis have become as much a service business as a product business, offering everything from bra fittings to personal stylists, wedding gift list appointments and jewellry measurement services.

Applied to banking, this means creating friendly spaces where customers can consult experienced advisors about their most important financial decisions. And that requires a way to engage them in your website or app when they are ready to make that enquiry.

So the race is on. Can retail banks find advantages in their established branch networks before challenger banks and fintech companies cannibalise every area of their traditional business? Whoever wins the battle it’s plain to see that the future of finance relies on technology to help your human resources shine.

For me, there’s only one outcome. Commodity tasks should become increasingly easy to access and when customers really need their bank the most, they should be able to access a human touch and a familiar face in branch or over the phone. Everything else may as well be just be handled by an ATM.