by Ron Daly
Used to be there were "soda jerks" - guys in white hats and striped shirts that knew how to make a root beer float. Then, someone figured "Oh, heck - just let people get their own soda. Or hey, put it in a can!" Suddenly, the soda jerks were gone.
The big thing when I was a kid was a portable radio that you could listen to all on your lonesome. Now, you can choose the songs you want with no commercials. You sort them and shuffle them and keep your tiny white earbuds in so you don't have to make conversation on the train.
The old gets replaced or diminished and the new shows up to, ostensibly, make things better. The same is happening now to credit unions across the country. As online banking, eStatements, automatic bill pay and debit cards increase, the desire for branches decreases. Which is good and bad.
From the Gonzo Banker article, "Getting Real About Delivery Channel Shift":
Electronic payments continue to increase in utilization versus cash and plastic, driving teller transactions lower. And of the teller transactions still coming to the branch, how many of those wind up coming through the drive-through? Online account opening and funding, originally championed by credit unions and now widely adopted by banks, means there is even less reason to head into the branch. I visit branches on a regular basis to assess sales and service technology and can’t remember the last time I got to observe a live account opening process since there weren’t any customers in the branch.
Yes, the branch is suffering. But it doesn't have to die.
From the Financial Brand's article, "People Bank Online, But Prefer Branches for Service"
For routine transactions, 41.4% of consumers indicated their preferred banking channel was online. This was followed by branches at 32.6%, ATMs at 23.3%, mobile a distant fourth at 1.5%, and finally the telephone at 1.3%.
Yet when faced with problems, consumer preferences shifted drastically. Consumers most often wanted to speak with a person when they had an account issue. 60% cited the desire to visit a branch with a banking problem, while 34% preferred using the phone. Only 6% would prefer to take up their issue online.
“Connecting with consumers in a one-on-one manner can drastically influence bank loyalty,” said Gary Edwards, EVP/Client Services at Empathica. “The importance of this is compounded during problem resolution. If you can quickly address a consumer’s concerns, they are more likely to be loyal to your bank than a consumer who never voiced any concerns at all.”
What always strikes me funny about stories such as this - the number of people who read "32% of people prefer branches for routine transactions" and think it's time to pour the foundation on another branch. Wake up, folks - 64.7% are eager for ATM and online transactions, according to the article above...another branch is going to hurt more than it helps.
Given this data, why aren't credit unions in this country focusing on their online interactions first? Just think of your OLB as another branch - what does it need?
Could a member pull up your OLB at a public terminal and log out without anxiety over someone being able to access their account after they leave? Do you have MFA? No, not a Masters of Fine Arts...multi-factor authentication. How about a timed lockout?
Don't skimp on UI design. A system people hate to use or find too complicated is like a branch with no pens and no tellers. Even if you can set up the transaction, no processing means you've wasted your time.
Also, would it kill you to make your online banking LOOK NICE?!?
Is there a menu that links to everything a member could do in online banking? Nope? Then make one.
4) The "Kitchen Sink"
The biggest difference between your online branch and your physical branches? Next-level services for members. A teller isn't going to call a member when their account is too low or when there's a new product they should look into or when they've over drafted. An online "teller" can do just that, in the form of emails, text messages and, yes, automated calls. What better way to convince the member you're working for them than to prove it with cost-effective calls and messages?
And no, you don't have to do away with your physical branch. You just need a shift in what it's used for. The Gonzo Banker article above points out that many banks and CUs are changing formats, making the teller we're used to into a customer service rep. By doing so, they're reducing the steps between entry and exit and redefining what "going to the branch" means. If folks are only showing up to get problems solved, then make it a place for problem solving. Let your online do the bulk of the work, because that's where a bulk of your users are anyway.