Micro-branches; the future of customer-first financial services?

By Peter Bell, Senior Director of Product Marketing at Marketo EMEA 

Earlier this year Lloyds Bank announced plans to shrink hundreds of its branches[i], with some completely stripping out old counter sections. New “micro branches” will be staffed by just two people, who will offer support to customers using self-service machines.

Peter Bell
Peter Bell

While the finance industry does not have the best reputation for great customer service and engagement, Lloyds for example has recognised and responded to a profound change in customer behaviour as more and more transactions move online.

Text banking, mobile applications and even real-time online chats have helped financial services operators to make giant strides in offering more efficient and convenient solutions to keep customers engaged and happy. The new ‘micro-branch’ will again use mobile technology to both improve efficiency and appeal to their customers’ evolving needs.

But while technological innovation launches a company forward, to stay in orbit financial services companies will need to focus on strong user acquisition, customer engagement and retention strategies. Aligning with this notion is the importance of putting a consumer first and working towards bridging the gap between a positive user experience and successful financial services solution.

Putting customer experience first

The Digital Banking Report[ii] has found that customer experience is a formal initiative at only 37 percent of banks.Rather than looking at new technology, such as smartphones,to build relationships, many bankers still take a transactional view and look at phones primarily to reduce costs.

From banks to remittance companies, FX brokers to online lending platforms, a company’s bottom line is impacted when it’s not meeting customers’ service expectations. While many of the frustrating factors for customers are ultimately out of the control of the company itself such as the highs and lows of the market, it is still crucial for banks to make sure they are investing in improving consumer engagement.

Consumers expect quick responses, instant access to insight and more control of their finances. Embracing new technology innovations to better connect with users and offer a wider array of solutions will always have a defining impact on customer perceptions and competitive edge.

Keeping services ahead of the curve 

In recent years, the financial services industry has gone through tremendous upheaval as technology continues to disrupt business models. According to a new PwC global repor[iii]t, the majority of global financial services companies plan to increase fintech partnerships as 88% express concern they will lose revenue to innovators.

Where Lloyds Bank may have tapped new potential in-branch, consumer demand for immediacy, money movement outside of branches and focus on automation continues to drive digital innovation at a fierce pace. Consumer-facing financial services products such as the rise of mobile wallets and app-driven money transfer options have also supercharged the industry and positioned nimble, fintech companies to be in the lead.

While it may seem ever-changing, staying ahead of the innovation cycle across all aspects of the business is possible. Digital solutions and smarter tools for all areas of a business– including marketing platforms – can aid companies to better understand their users and customers’ needs and tailor services accordingly.

Adopting engagement for this new era

As consumers demand that the brands they engage with – especially service organisations – serve them content and resources that are relevant to their needs, companies need a way to execute this at scale. Automation, in areas such as marketing, plays a big role in meeting this demand, helping financial services brands to anticipate their customer needs and provide relevant materials to inform them and build trust right from the start of the consumer relationship.

Delivering regular customer-centric content to consumers will allow companies in the sector to address some of the pain points that customers are having and mitigate issues that may arise down the line in the brand-consumer relationship. It also offers an opportunity to engage them in new company developments and provides an opportunity to upsell new products and services.

Financial services must embrace the opportunities posed by this new era of engagement. With the correct tools in place these companies can move forward strategically, pairing data-based insights with human intuition to deliver consistent, relevant and most importantly, meaningful interactions.

It’s about being aware of the technology innovations taking place across every part of the customer journey, within the financial realm and beyond. The experiences delivered by brand leaders elsewhere, such as Netflix and AirBnB, raise the bar for every business that exists to serve its customers. Banks can only hope to compete when they recognise the importance of building consumer relationships and trust.