Credit union members have choices when it comes to how they bank-they can visit a branch, go online, walk up to an ATM, call a representative or IVR system or use a mobile phone application. So which channel do today's consumers prefer?
According to a new report from Forrester Research, in-person branch visits still rule as the most commonly used channel, followed by online banking. Coming in last? Mobile banking. But more importantly, most customers use multiple channels on a regular basis.
Three in 10 consumers use more than one channel monthly, with ATM and online banking being the most popular combination, according to the report, which is based on the results of a mailed survey of more than 4,500 U.S. and Canadian consumers. Sixty-eight percent said they had visited a branch in the past year, while 59% said they had banked online.
Channel use varies with location, education, income level and age-researchers found that younger consumers are more likely to use multiple channels, with Generation X members (those ages 30 to 43) constituting the majority of multi-channel bankers. Americans living in the West are more likely to use multiple channels than those in other regions, and a higher income means more frequent multiple channel use (specifically, wealthier people use a combination of branches and the Web).
While mobile banking is generally unpopular, electronic banking-which includes mobile and online banking-is increasingly influencing the way consumers think about financial transactions, Forrester said. Thanks to an increase in online security and overall comfort with the Internet, online banking has become the norm, the think firm found. Additionally, the Internet is where consumers go to research and purchase financial products and is increasingly used for single financial activities like buying a mortgage, the report states.
"Electronic channels are rapidly becoming the day-to-day hub of many customers' relationships with their bank," Forrester analyst Emmett Higdon said. "These changes in customers' channel use have important long-term implications for e-business and channel strategy executives."
For credit unions looking to satisfy members, accommodating today's multi-channel user is key, the report indicates. "We believe that banks still have much work to do in replacing branch-centric distribution models with true multichannel strategies in which each channel plays a distinct and complementary role," Higdon said.
To maximize business resources and build better relationships with today's multichannel consumers, Higdon recommends that financial institutions centralize channel management, appointing a single executive to efficiently integrate the institution's channels.
Institutions also should encourage the use of ATMs and online banking for everyday activities such as deposits and cash withdrawals, and steer consumers away from branch visits for these types of transactions. Instead, branches should serve as hubs for high-value activities, such as product sales, new customer interactions and financial advisement sessions. Finally, whether communication occurs in person, over the phone or online, customers should be told that the website should be their primary banking channel.
"Many customers have a growing appetite for handling their finances online or through other remote channels like mobile banking," Higdon said. "Banks should use their websites as the primary sales channel for most routine products and as a lead generator to drive customers to branches for advice on more complex products," he added.