Branching Out? Trends in the Banking Industry

Photo of the inside of a bankEveryone in the financial services industry knows that the push to digital is the single most important driver of change in banking to come along in decades. According to two recent reports from Accenture, as much as 35% of banks’ market share in North America could be in play in the next five years as traditional branch banking gives way to new digital players. Customers want convenience, they want mobility, and they want tools to manage their accounts themselves.

So it’s interesting that while this accepted knowledge would seem to dictate moving quickly to digital tools and closing branches, when you actually talk to bankers, it’s a bit of a different story. In fact, 66% of North American banks polled said they will have the same number of branches in the next five years, while 27% said they would have more. Another 8% say they will have many more.

Why?

Well, worldwide, it makes sense; there are growing populations and growing wealth in places like India and China. But here at home, there’s really just one answer: customer service. While customers definitely demand more access to reliable, useful digital tools, they also want a place to go when the ATM is down or they have a pressing question. They want a smiling face to talk to about adding a new account or replacing a debit card. And since about half of all banking customers visit a branch at least five times a year, there need to be enough conveniently located branches to accommodate that.

I’d guess another factor is the trend to open mini-branches in large retailers’ locations. And the closing of large centrally located buildings to replace them with several smaller, leaner locations. So while many banks are implementing “mobile-first” strategies (which only makes sense), they still know that the total customer experience is what will keep their clients happy. And both digital and in-person experiences are a part of that.

As marketers, we have to demonstrate the ease and functionality of those shiny new tools, of course. But our real job is to show them how much better their experience can be. We’ll never turn banking into something people are eager to do, whether online or off. But we can convince them we can make their experiences, and their lives, simpler.

Which of these trends in the banking industry have affected your business?

Photo Credit: Flickr’s Tracy Olson

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