There is certainly no shortage of experts willing to prognosticate on the future of the retail bank branch.
For well over a decade, the futurists have generally aligned themselves around one of two sides of the debate. Those predicting the end of the branch as we know it, and those predicting even more branches with wider use of technology that resemble something out of the movie “The Minority Report.”
Even Microsoft’s Bill Gates referred to bank branches as dinosaurs in 1996 and predicted that we would soon live in a world without branches. Consequently, the arrival of each new branch killing technology such as ATMs, telephone banking, Internet banking, PayPal, and mobile banking has fueled a debate primarily focused on the lifespan of the brick-and-mortar structure we call the branch.
But, fixating on branch elements such as cool coffee stations, digital signage, iPad kiosks or hip furniture misses the mark. The future of banking isn’t about the physical structure itself; it’s about the experience a credit union can consistently provide across all delivery channels. Thus, the branch is simply another tool that supports and enriches those experiences in the most functional and efficient ways possible.
So, what kinds of experiences are ideal for both credit unions and their members and how do those experiences drive branch network and design decisions? To answer that question, credit unions should revisit and understand the fundamentals of human behavior and how that will shape the ways that members want to interact with financial institutions in the future.
Every interaction creates a personal reaction
First, few people would dispute the fact that individuals innately want relationships. The need for human connections and interactions is part of how we are hard-wired. People even seek relationships with companies and the products or services they provide. At the core of this desire is the need to have a place to be heard, a place to be appreciated and a place to connect. At the same time, people want to control the nature and level of interaction they have with businesses. Unfortunately, since the age of industrialization, the business world has systematically created an artificial divide between themselves and the people they serve. Clearly, social technologies are eliminating these barriers by empowering people to establish relationships and make their opinions heard in ways never before possible. To truly leverage these factors, credit unions will need to connect with member’s personal values and ultimately win their hearts and minds.
Experiences designed for everyone satisfy no one
Credit unions cannot ignore the irrefutable truth that member experiences are completely in the eyes of the beholder. The same exact experience can be for one member and bad for another, so connecting with members at the personal level is critical. These experiences need to be designed for the individual, not the masses. While it may not be possible to individualize every member interaction, the ability to focus on narrow segments is essential and must be prioritized. Since you need to design for specific types of people, experiences will be optimized for a specific set of members. Achieving this will require credit unions to have a very clear picture of their most valued members and a clear definition of their needs.
People do not want to be sold
Regardless of the product or service, people do not want to be sold. Instead, they want the buying process to be as easy as possible. So, help them buy what they want, rather than sell them what you want them to have. Whenever credit unions think about member experiences, they should try to frame them from the member's point of view and look at every interaction as an opportunity to help members do something. As Jeffry Pilcher, publisher of The Financial Brand explained, “The bottom line is that people want their banking experience to take as little time and involve as little headache as possible. People want to spend less time interacting with banks and credit unions not more.” To Jeffry’s point, members view being sold to as a headache and an inconvenience.
Member familiarity fosters alignment
Very few credit union employees wake up in the morning and say “today, I want to make life miserable for our members.” Yet, every day, a lot of employees at all levels of the organization make decisions that end up frustrating, annoying, or completely alienating their members. But the reality is, it’s often individual actions that cause the problems. Many times the issue comes down to a lack of collaboration or coordination across departments and organizations.
“As a relatively new member of a credit union, it has definitely been impressive to walk into a branch and have the staff actually know my name and a basic understanding of my banking needs,” says Heather Horrocks, marketing coordinator at Momentum. If everyone at the credit union shared a clear view of the members and had visibility into member feedback then there would be less ambiguity about what to do for them. While it may be difficult to agree on overall priorities and strategies, it's much easier to agree on the best way to treat members.
You can’t fake commitment to member experience
You can fool some people for some of the time, but most people will eventually discern what’s real and what’s not. This usually reveals itself in a couple of areas of business. First, employees can sense if the member experience is not a top priority with the senior management team. The second place this is obvious is in a credit union’s marketing efforts. No matter how much money a credit union spends on advertising, it can’t convince members that it provides better experiences than it actually does. A commitment to meaningful member experiences needs to institutionalized and adopted in an authentic way. Otherwise, members will quickly sense they are being sold.
It’s a multi-channel world
We live in a world of instant gratification where people have an increasing number of options for virtually every product or service they consume. The days of “build it and they will come” are long gone and create a recipe for disaster. For credit unions, this means that the role of the retail branch must evolve from a place primarily used for basic transactions to one that is used for high-value services and advice. According to Pilcher, “What those in the banking world often forget is that people generally hate banking. It is a chore. That’s why speed and ease are so critical. It's more than just convenience. Building a branch on every corner may make a financial institution more accessible, but not necessarily more convenient.”
For credit unions to be able to adapt to evolving member needs and preferences, it is essential that they understand and respond to how members want to interact with them in the future. But, if credit unions start by focusing on creating the branch of the future, they end up missing the bigger picture. It’s all about the member experience.
Michael Downs is vice president of marketing at Momentum
Contact 206-267-1900 ext. 113 or firstname.lastname@example.org