By Sanat Rao, Chief Business Officer and Global Head at Infosys Finacle

As the world begins to reopen in the wake of COVID-19, it’s clear that the pandemic has brought about deep changes to the way consumers think about, access, and engage with financial services organisations. Just as the crisis will fundamentally reshape the retail sector, it will also bring about major changes to High Street banking, as cost-conscious organisations look to optimise their operations for the post-pandemic environment.

While some bank branches will welcome customers again throughout 2021, it will not be a permanent return to business-as-usual. That’s because the entire banking industry is on the cusp of a far-reaching transformation. In the years ahead, forward-looking financial services organisations will embrace a hybrid model of customer engagement, in which digital and in-branch channels are fine-tuned to specific customer journeys.

But how can banks strike the right balance between these two worlds, and shape a hybrid approach to engagement that delights every customer?

Digital services come to the fore
In the UK and across Western Europe, the high penetration of mobile devices, combined with the speed and convenience of online retail, have brought about a seismic shift in consumer expectations of banking. We know that meeting these expectations is a powerful way to protect hard-won customer relationships. For example, the Gartner 2019 Customer Experience Management Survey revealed direct evidence that customers are more likely to renew a relationship if their interactions with a company are fast and easy.[1]

During the upheaval of local lockdowns and social distancing at the peak of the COVID-19 pandemic, banks fell back on digital channels to continue to engage with and support their customers. Many customers who previously preferred face-to-face branch interactions have actually become more comfortable with using digital channels for day-to-day transactional banking.

Although this might seem like a strong indicator that digital channels will lead, only 16 percent of European consumers surveyed for the EY Future Consumer Index reported that they planned to change the way they bank in the long term because of COVID-19, and only 17 percent of over 55s surveyed expected to bank more online in the next one to two years.[2]

Face-to-face interactions are still crucial
The available data suggests that all customer segments—including born-online Millennials as well as older generations—still want face-to-face interactions to be part of their overall banking experience. While more customers have become comfortable using digital services for transactional journeys such as depositing cheques, reviewing statements or making payments, they will seek out banks that can also provide the human touch for their more complex requests: for example, help with finding the right mortgage deal, exploring borrowing options, or saving for the future.

In a transactional banking journey, speed makes for happy customers—but for face-to-face interactions, it’s exactly the opposite. For non-transactional journeys, customers value banks that take the time to listen to their needs, understand their financial goals, and provide personalised advice and guidance. Banks that can optimise their digital channels for speed and their in-branch channels for personal service will be in a strong position to succeed in the world of hybrid engagement to come.

Reimagining the customer experience
To achieve this goal, many banks are now looking to reimagine the in-branch experience. Today’s branches are still centred around teller windows: a holdover from a time when the High Street was effectively the only place customers could go for their transactional banking needs. As consultative services take precedence, future-facing banks will rearchitect the branch layout to support the new customer experiences.

While the front-of-house layout is important, the way that banks structure their processes behind the scenes is arguably even more so. Whether a bank is engaging through a face-to-face meeting or a slick mobile app, burying the customer in time-consuming box-ticking and form-filling tasks can quickly cause satisfaction to plummet. To realise the commercial benefits of the hybrid engagement model, it is vital to ensure that the banking processes and systems are architected to deliver a smooth, consistent and friction-free experience on any channel and at any touchpoint.

The first banks to successfully implement a hybrid approach to engagement will have an enormous opportunity to capture mindshare. In the same way that Xerox became synonymous with photocopying, Google with search, and Zoom with online meetings, banks that transform their model will be in a prime position to become the first name in customer-centric retail banking.

Modern bank branches may therefore be competing against a host of locations purely on terms of hospitality, convenience, and confidentiality, while relying on integrated, secure, robust, digital services to execute the transactional functionality.

Nobody knows the future, but possible paths are becoming clearer by the day. The economics of digital delivery are opening up new ways of working in every industry, and banking is no exception.

[1] Gartner, “3 Key Findings From the 2019 Gartner Customer Experience Management Survey”, https://www.gartner.com/en/marketing/insights/articles/3-key-findings-from-the-2019-gartner-cx-management-survey (accessed March 2021)

[2] EY, “How COVID-19 has sped up digitization for the banking sector”, https://www.ey.com/en_gl/financial-services-emeia/how-covid-19-has-sped-up-digitization-for-the-banking-sector (accessed March 2021)