More Power to the Consumer

Do you know how your customer base wants to interact with your bank?

Yesterday I attended the Bankerstuff webinar, “Branch Transformation: Positioning Your Branch Network for the Future”. Chris Gill, Jim Flannery, and Jason Wolf of Diebold Branch Transformation Advisory Services presented some fascinating information on consumer trends.

Consumer interactions are changing. Teller transactions should decline, and ATM transactions should remain flat, by 2015. Growth will be found in online and mobile transactions, with mobile growing from 5 billion transactions in 2010 to roughly 18 billion by 2015. Additionally, consumer expectations are shifting as they interact with retailers in a variety of industries. What can you learn from retailers? How do your customers interact with you – and how do they want to interact with you?

Consumers have a lot of choice. Within the banking industry we tend to focus on the fact that the number of banks is declining, so there’s not a lot of thought put to the fact that consumers have literally thousands of banks to choose from – and that doesn’t even include the “non-bank” financial products on the market, like Bluebird. Diebold Branch Transformation Advisory Services found that 64% of consumers select a financial services provider based on the brand’s reputation. How are you strengthening your brand?

The branch isn’t dead.

  • 67% of consumers still prefer to go to the branch to make a deposit.
  • 53% prefer the branch for problem resolution.
  • 73% want to open an account, and 67% want to apply for a loan, in a branch.

The trend in the industry – the call for branch transformation – tends to focus on having a more specialized staff, with a shift in the branch from a transactional center to a service & sales hub. Banks may have to guide those consumers that still want to use the branch for transactional matters, like deposits, in order to create a more profitable branch system. Offering the right mix of branch, mobile, and online banking will help lead these consumers to choices that could be more convenient and better meet their needs – and help the branch become more streamlined and profitable.

Keep an eye on the young ‘uns. Gen Y’s and Millenials will hold the most spending power by 2017, and will conduct 40% of transactions. While only 33% of consumers consider mobile banking important when choosing a financial provide, 49% of Gen Y consumers, and 39% of Gen Z, do. But don’t discount the branch: 56% of Gen Z and 58% of Gen Y still consider the number and location of branches when choosing a bank. Where will these customers transact with you? Where will the relationship be? Are you offering the right mix of web, mobile, and branch?

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PwC Financial Services Managing Director, Nate Fisher, highlights how banks can align their pricing structure by using data from customer preferences.

Mike Branton of StrategyCorps shares how to put the retail back in retail checking.

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