A bank’s architecture has long defined its purpose: stable, strong and secure. In recent years, however, the nature of bank branches has changed. Due to a number of factors, including the emergence of digital banking, the industry has witnessed a transformation in why or when people use bank branches, as well as the number of people still using them.
Branches account for a third of banks’ expenditure and transactions costs in-branch far outweigh their digital equivalents. In fact, PwC says that branch transactions cost roughly $4 each, whereas online and mobile transactions cost $0.09 and $0.19 respectively. It is therefore important that branches streamline services to reduce their costs while using video analytics to provide unique customer journeys.
A new role for a digital era
Bank branches no longer need to be as close as possible to their customers, as digital innovation has opened up the convenience of banking to consumers and businesses wherever they are. However, complete bank branch closure is far from a reality.
IBM found that branchless banks are struggling to grow as they have difficulty gaining trust and enticing new customers to join. This is because human interaction in banking is still necessary as there are still many services customers prefer to manage in-branch, such as business loans or mortgage consultations.
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As the role of bank branches changes towards financial consultancy rather than traditional transactions, banks must be prepared to embrace a more human-centric approach. They should aim to operate on the quality, not the quantity, of bank branches to deliver a customer focused experience, based on trusted relationships where each customer feels valued.
The issues faced by bank branches
Historical events, such as the Lehman Brothers crash, have led to consumers becoming resentful towards, and less trusting of, financial institutions. The crash, which led to one of the biggest financial crises since the Great Depression, bought many businesses and financial institutions to the brink of collapse, wiped out millions of jobs and billions of dollars of income along the way.
Along with a lack of trust, banks are facing another issue: A change in the way people use and access money. Worldwide digitalisation and app developments have created a high level of customer expectation, with a 24/7 service via online and phone banking now seen as normal practice.
However, while it increases convenience, the remote, 24-hour access of everyday banking services has made it harder for banks to up-sell and cross-sell products to customers. This is because they are not visiting branches as regularly to see promotions and online ‘ad blindness’ means promotions in-app or on the website are often ignored.
By creating a customer experience journey as effortless as digital services, bank branches can maintain their competitive edge. Customers are more likely to come into the branch if they feel it will be easier, less time consuming and useful to do so.
Using untapped data to gain a competitive advantage
Looking at improving customer experience, banks can draw on the highly effective techniques of retailers. Under pressure from online stores, such as Amazon and Alibaba, retailers are using data in order to target consumers with attractive offers and improve in-store customer experience. By using various data sources, bank branches can better understand the customer journey and tailor their locations to suit the needs of consumers.
Using data will help deliver a better customer experience, vital for customer retention and growth by enhancing customer experience when they do come in-branch for a complex service. As a result, banks can increase the chances of attracting customers to new products.
For example, analyzing data across a branch’s opening hours around footfall, customer demographics and the most requested products can help branch managers optimize the branch’s customer service strategies across various time periods. Optimization possibilities range from promoting certain stage-of-life products when that age group is most likely to visit their branch, through to ensuring more staff are available on the branch floor to help customers during peak hours.
Along with providing great customer service, using the right data effectively can help banks reduce branch costs and improve efficiency. By analyzing how customers behave and move around the branch, banks can see where best to invest in automated services. By using automated machines to speed up the time spent with menial, lower profit interactions, banks can accommodate a larger number of customers during their working hours. This will allow branch employees to focus on complex customer demands for high margin products that necessitate human interaction.
How video analytics can be used to enhance customer service efficiencies
One way to gather data is through video analytics. Video analytics software examines video footage to provide the user with data that would otherwise not be easily obtained. In doing so, in this case, branch managers can understand the customer’s journeys from when they enter the bank to when they leave. The analytics can pick up data such as how many people enter the branch, where they spend the most time and therefore allow branches to adapt if they identify any issues.
Using video analytics in bank branches can create a tailored experience that the customer will enjoy more than if they to walk into a branch and wait in the first queue they see. Technology can also help create a relationship between the bank and its customers, with the latter feeling like a distinguished client.
In order to understand the footfall traffic, bank branches can use people counting technologies. This helps understand the comings and goings of people, including when new customers are likely to enter the branch. In doing so, the bank branch can determine when the most people are likely to enter the premises and can be better prepared to deal with customer requests.
For example, people often go to the bank during lunch breaks, but at this time, the bank employees are often on lunch break themselves. By staggering the lunch or asking the employees to take their break later, the bank is more likely to gain, and keep, clients as customers will be satisfied with the service provided.
Alternatively, banks can use this data to understand, or at least estimate, when new customers will come into the bank. As a result, bank branches can adapt their staff by increasing the number of employees who will be able to open new accounts. By enabling this customer focused approach, branches can gain new clients and also increase overall efficiency by providing the right advisor for the customer.
To decrease queue lengths, branches can combine video analytics with banking apps. The data that determines how many people are in the branch can be passed on to a mobile app through which customers can see just how busy, or not, a bank branch is. In doing so, customers can adapt their visits accordingly and miss out on long unnecessary queueing.
Furthermore, a queue management system can be used in conjunction with people counting. By knowing when the bank will be busy, queue management technologies can deduce where best to lead the customers so that they spend as little time as possible waiting. A short queue means a happy customer, who will not see visiting the branch as a burden.
With this in mind, as most services are available at the touch of a button or just an app away, customers don’t want to spend a long time in a queue. Customers will, therefore, leave the bank if they become impatient, increasing their frustration and creating issues when trying to attract and retain clients.
While not common practice at present, facial recognition software has the potential to be used to identify VIPs. Alternatively, customers could use the bank’s app to upload an image of their face, sign up for facial recognition and get on the facial recognition system themselves. These more client-centric approaches would allow the customers who are known to the bank branch to build and maintain strong bonds with bank employees.
By knowing who comes in, at what time and for what, bank branches can create what feels like an individually tailored customer experience for all involved. This will not only increase customer satisfaction but will help the bank reduce unnecessary costs.
Why a customer services approach is important
Improved customer satisfaction will lead to the retention and differentiation in a highly competitive market. By putting customers first and foremost in a bank branch’s mind, it becomes part of a bank’s brand proposition as it permeates the bank’s culture meaning employees will make sure that customer satisfaction is a top priority.
By understanding who comes in when and for what, branches can customize employees’ rotation to better deal with customer needs. This would enable branches to offer an intimate tailored and more customer-focused approach.
Furthermore, banks can use IP Audio systems to play background music for a more comforting experience or to create a dialogue with the customers by alerting them to anything pertinent. This can be from alerting customers that an employee is ready and free to see someone to informing customers that the bank branch will close in 5 or 10 minutes. In doing so, it can make for a more open and informative atmosphere, which helps build a relationship between a bank and its customers.
The digital transformation will enable tellers to, instead of sitting behind a desk, roam the branch floor equipped with digital devices, such as phones or tablets, in order to find out what customers need. This will create a more customer-centric atmosphere, increase efficiency and boost customer experience as their time is tailored to their needs instead of waiting in queues.
By creating this environment where the customer is number one, through employee focus or the use of technology, bank branches can help increase profitability and continue their legacy through bank branches in each city.
A new omni-channel banking experience
Although going digital may heavily reduce a bank’s expenditure, the main reason for doing so is to provide a much more flexible and agile approach to banking. Gone are the days where all bank transactions have to be done within a certain time of day. Thanks to digital, it is now a 24hr service.
Banks are no longer just places where people need to feel safe enough that their money is in good hands. While digital banking increases convenience, it is very impersonal. Banks need to understand that in order to retain, gain and increase customer numbers, they need to also take a more human-centric approach instead of one focused solely and specifically on sales, safety and security, something for which bank branches are the perfect platform.