The growing popularity of branch renovations and their market expansion by some of the largest financial institutions supports many of the insights in our firm's Seamless Banking and the Future of Advice studies released in the past six months. Reviewing the reports, we have summarized some of the more salient points supporting the current refocus on the physical channel, namely:?
- Physical Branch Importance: Despite the digital shift, physical branches remain vital for a substantial segment of customers, especially those valuing in-person services, advice, and community-focused amenities. Only 26% of consumers primary banking channel is digital reinforcing the importance of branches and the ability of connecting with bankers. Of greater significance is how the growth segment of the population, the 18- to 43-year-olds, view the branch as a place for financial advice. Customers also appreciate branches beyond traditional services, indicating a desire for branches to serve as community hubs with extended services and amenities.
- Gaps Between Physical and Digital Channels: The integration between physical and digital banking channels needs improvement. Customers experience disconnects when transitioning between channels, pointing to an opportunity for banks to enhance omnichannel coherence and seamless experiences.?Seamless is not just better technology, its understanding the importance customers have in having access to human experts, irrespective of the channel being considered.
- Maintain and Enhance Personal Connections: Despite the digital shift, the importance of personal recommendations (from friends or family) and advice from bank branch managers or staff indicates that personal connections and trust remain crucial. Banks should pay attention to the value of human interactions. Training staff to provide high-quality, personalized financial advice and maintaining a physical presence through branches or advisory centers could complement digital offerings.?
- Foster Financial Literacy and Trust: The reliance on personal networks and online searches for financial advice points to a potential gap in financial literacy and the need for trustworthy financial information. Financial institutions have an opportunity to position themselves as go-to sources for reliable financial information and advice. Educational resources, workshops, and advisory services can help bridge the knowledge gap, build trust, and empower customers to make informed financial decisions.
- Innovate and Experiment with New Services: Respondents' openness to considering banking services from other providers and using apps not from their primary financial service provider indicates a willingness to explore and adopt new services. Financial institutions should proactively explore new service offerings, especially those integrating technology to enhance convenience and accessibility. Collaborating with fintech companies, exploring non-traditional banking models, and offering innovative financial products can attract and retain customers seeking novel and efficient banking solutions.
These findings suggest that while digital banking continues to rise in popularity, the physical branch channel holds significant value for many customers, mainly when it offers enriched, community-focused experiences. Improving the integration between digital and physical channels could address current gaps and enhance the overall banking experience. To download our research studies, please visit SLD.com
