Brick and Mortar Branches Still Show Staying Power
CAMBRIDGE, Mass. -- Bricks and mortar continue to show their staying power even as technology pushes the envelope of Internet banking to wireless and beyond.
The number of physical bank offices increased by 15% in the past decade, even as institution charters continued to drop, according to Forrester Research Inc.
Perhaps not surprisingly, the think firm says, members and customers frequenting these institutions tend to be older.
"With the exception of the youngest age group, there is a direct relationship between age and branch preference," says Mary Pilecki, author of a new report from Forrester. She says data from her firm's sweeping Consumer Technographics surveys show that 77% of consumers age 65 and older are branch loyalists.
However, there are complex factors at work besides age. Forty percent of branch loyalists say they take to the streets because they don't trust the phone or Internet for banking activities. Only 17% of this group uses online banking, compared with 29% of all U.S. households.
Demographic figures also reveal that more women than men prefer to visit their branch office. Branch loyalists have a slightly lower income than most consumers and they are less likely to have broadband Internet access at home.
Even consumers who handle most banking activities outside the branch recognize its role in personal service and new account generation. Seventy-seven percent of respondents believe that branch representatives are knowledgeable and helpful, and 66% agree that visiting a branch is the fastest way to open a new account.
"Consumers like the branch's human touch," Pilecki says. With 69% of respondents indicating that they need to talk to a person when dealing with account issues, that isn't likely to change.
To help financial institutions capitalize on branch visits, Pilecki recommends that financial institutions invest in staff training and service software. For instance, she says, decision analytics from companies like Chordiant Software, Siebel and Unica generate instantaneous offers for consumers based on information keyed in by branch representatives. Meanwhile, step-by-step problem resolution tools enable reps to avoid errors while setting realistic expectations for the customer.
"Selling is a skill that benefits from regular feedback and coaching," Pilecki says, recommending that banks and credit unions invest in sales training, coaching and incentive programs.
"Sales and service reps will be more successful when they have built confidence by being thoroughly trained in products and processes and consider themselves appropriately compensated for the results they achieve," she says.
By combining well-trained representatives with good information and customized offers, branch offices may also be able to counter Internet banking fears and familiarize regular visitors with new technology. Regardless, branch banking won't be lost to cyberspace anytime soon, especially among the less educated and less affluent, who tend not to trust the Internet, the Forrester Research survey shows. --firstname.lastname@example.org