The Need for New Banking Models
It is no secret that the banking industry – along with most other industries – is facing disruption and challenges at every angle. Even before COVID-19 and the accelerated move to online banking, Fintech’s and evolving customer needs have meant that traditional banks are at a crossroads.
What do your customers want?
We know that customers who have a positive experience with a financial institution are more loyal and likely to stay with that institution, but what are the factors that lead to a positive experience? While many assume that it is about implementing new technology and digital capabilities, our research has shown that creating an emotional connection is how banks can ensure loyalty. Instead of focusing on transactions, banks should instead be focusing on the relationships they have with their customers. Do your services make your customer's lives easier? Are you providing adequate financial advice? Do customers feel welcome when they enter your branch? Do your mobile app and bank branch work in tandem or in opposition to each other?
Though many banks have reduced their branch network and are instead focusing on their digital-only banking capabilities, we believe that the bank branch is still the most valuable asset that traditional banks have in creating these emotional connections with customers. With that being said, the bank branch does need to evolve if it is to remain relevant.
The shift from transactions to advice
With most customers now comfortable with banking online, the role of the bank branch no longer needs to be tied to basic transactions and meetings. Driven by the need to provide more significant financial consultation, a new branch model has emerged, and market-leading banks have already started on this journey. The model is an ecosystem that provides a broader and more inclusive range of services to a targeted customer segment.
For example, think about a bank branch geared towards start-ups. The branch could serve as a shared working space for entrepreneurs to collaborate, host meetings, and gain business and financial advice. Not only would your bank be positioned to deliver an integrated ecosystem of services, you would also be delivering on the unmet wants and needs of this particular customer segment. Depending on who your audience is, perhaps an ecosystem focused on new families or new immigrants may make more sense. The exciting thing is that the possibilities can be endless, and the benefits even more so.
Transform your future
We explore the idea of banking ecosystems -– as well as the forces that have led us to this point and what the future could look like – in-depth in the Customer Experience 4.0 Master Series, which you can now sign up for. Featuring video tutorials, guidebooks and worksheets, the e-learning series is focused on helping banks transform their future and avoid the challenges that are inherent in change management. With topics that range from bringing the ideal customer experience to life, to respond to future trends and how to create a differentiated brand position, you can learn more about the Master Series here.