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For Best Results, Think Hybrid

Digital transformation is undeniably important, but a human touch still matters deeply to customers.

Digital transformation isn’t going away any time soon — and it shouldn’t. Technology improves experience for both customers and advisors. But the in-person branch experience is still invaluable for clients craving personalized attention. It’s crucial to make sure your channels complement one another to provide the most seamless customer experience. Here’s why your FI should think hybrid retain customers and drive growth.

Balance Physical And Digital Channels — Or Get Left Behind

During the past few years, it’s made a lot of sense for financial institutions to double down on the digital experience. In the time it’s taken for digital banking to become commonplace, consumer expectations about what digital offerings should provide solidified. Then the pandemic hit and customers wanted to bank how, when, and where they wanted. Providing digital entryways was no longer a choice; it was a necessity.

In response to that need, FI investment in customer-facing digital technology skyrocketed. Unsurprisingly though, with the cost of implementing new technology, most FIs divested from physical channels. After all, the budget had to come from somewhere. In fact, 17% of all branches in the United States were closed.

The race to move banking services online caused many FIs to lose sight of one of the main things their customers value — trusting relationships with their advisors. The digital revolution has made it increasingly challenging for customers to connect with real human beings when making bigger financial decisions, which are crucial to generating trust and loyalty.

When a customer starts an application for a new account online and gets stuck with no easy way to connect with a person who can help them, the likelihood they’ll abandon the process is high. Same thing goes when a customer enters a chat to get help with their mortgage only to be rerouted to an agent who is not available at that moment to help them. Delivering a bad experience leaves customers unsatisfied and likely to take their business elsewhere.

Digital channels are still important — people still want convenience — but supporting customers when they need a human touch is critical for building rapport and creating loyal customers. Competing in today’s market is all about balancing digital and physical channels to ensure the best possible experience that’s efficient for both sides of the counter.

Why In-Person Relationships Still Matter

As banking has become increasingly digital it has also become more impersonal — but it doesn’t need to be this way. Currently, the majority of customers use their online banking app as the central method of engagement with their financial institution, but as Accenture put it, “digital channels are functionally correct but emotionally devoid.”

If apps primarily deliver convenience, they miss out on half of the equation when it comes to driving long-term loyalty. The key to keeping customers engaged is to deliver the financial advice they seek while ensuring it’s tailored to their needs. Importantly, there’s also an expectation that you, as their advisor, will help them get ahead. A full 59% of customers expect their FI will help them improve their overall financial health, but only 21% feel they’ve received that kind of advice. There’s where opportunity lies.

FIs that make it easy for customers to connect for one-on-one interactions see a lot of benefits. Being able to facilitate those in-person relationships can help FIs:

  • Attract new customers: One-on-one conversations in-branch are still the top channel customers use to open new accounts.
  • Improve experience: Satisfaction increases by 23.5% when a customer feels like they’ve received advice that meets their needs.
  • Sell more products: Of the customers who receive good financial advice, 47% opt to purchase a product or open a new loan.
  • Improve lifetime value: Building meaningful personal relationships can help banks boost revenue from primary customers by up to 20%.

All of these benefits point to growth. Relationships are also a powerful switching barrier — anyone can add more tech and push the digital envelope, but strong relationships are a truly unique offering that can help you stand out from the competition.

The Value Of Combining Physical And Digital

We already know customers want to bank digitally — and we should give them what they want. But physical branches still drive a lot of value for both your customers and your FI. Although it can be tough to swallow the staff and maintenance expenses required by in-branch services, the boost to customer satisfaction pays dividends.

What’s more, a physical branch can be a shining beacon for clients and prospects. Two-thirds of consumers like seeing branches in their neighborhood because they display the stability and availability of the bank. That physical location also plays an important role when customers choose which bank to use — they want to know how close is the nearest branch and how convenient will it be to get in-person help when needed?

Understandably, customers’ desire for digital channels for many banking services is giving many FIs pause as they reconsider how to best use their physical branches. But here’s what we know about brick-and-mortar locations: they’re where people overwhelmingly would prefer to go for thoughtful advice on complex products. It’s also where they prefer to engage with new products and services. The obvious solution is to focus on simple, transactional services online while prioritizing advice-centric services and products in physical locations.

When customers want to gather information about a new loan, they’ll likely visit their local branch. But if they want to make a simple transaction, online banking and mobile banking apps are the go-to. Any time customers have more than a question or two — or are considering a product that’s explained with plenty of financial jargon — it’s more than likely your customer will want real advice from a real person.

The key to a solid hybrid strategy is understanding how customers are using digital versus physical channels today. Ask yourself the following questions:

  • Which channels are customers using for our highest value products and services?
  • Which channels receive the highest satisfaction scores?
  • Which channels deliver which services most efficiently?

When a channel delivers a great experience in the least amount of time, it’s a positive indicator. These standouts give you great insight that can help you adjust service delivery models that lead to better experiences for customers and overhead cost savings for you.

Put Your Hybrid Strategy Into Action

There are plenty of FI leaders already getting hybrid right, and we have a lot to learn from them. Each approach has a few things in common:

  1. They offer flexible ways to connect, both digital and physical.
  2. They keep branches focused on advice and leverage appointments to improve the branch experience.
  3. They leverage data to better understand how customers prefer to engage.

Here are a few case studies of some FIs putting a successful hybrid strategy into practice.

U.S. Bank Knows, Sometimes, People Want To DIT — Do It Together

U.S. Bank knows its customers like options to DIY their banking digitally with self-serve tools. They also like to engage with advisors for more complex financial conversations. U.S. Bank handles both requests with a suite of both “Do it Yourself” and “Do it Together” tools, which have landed the bank top spots on  both JD Power and Associates and Forrester’s annual customer experience reports.

The key for U.S. Bank has been providing multiple options to get things done. If customers want to manage their investments with a robo-advisor, they can do it. If they want to speak with a wealth management rep, that’s possible, too. By investing in both technology and people, U.S. Bank is at the top of its game and reported an 18% lift in revenue due to both its friendly, easy-to-reach associates and its innovation in digital channels.

Arvest Bank Is All About Cross-Channel Connections

When customers are seeking help, it’s sometimes hard to pick the right channel to get their questions answered most efficiently. The experience can get even worse when none of the channels talk to each other and customers have to repeat themselves over and over. Arvest Bank solves this problem by offering real examples to its customers.

It demonstrates which services are best handled in-branch and goes one step further to show the real-time availability of advisors that are best suited to help customers as well as current wait times at the nearest branch. Arvest lets the customer decide which route is right for them, and it makes it easy no matter what channel they choose. This reduces wait times, increases satisfaction, and ensures smooth sailing for the more than 47,500 appointments and 137,600 walk-ins the bank handles each year.

Navy Federal Has A Whole Office Dedicated To Member Strategy

Navy Federal is a well-respected leader among FIs, in part because of how it puts members first and understands how its membership wants to bank.

“One of our philosophies is that you will always have a path to a human,” the credit union’s chief member strategy officer, Annie Sebastian, told the Credit Union Times. “We recognize the importance of that human connection, but with so much interaction happening digitally, we have to … humanize our digital channels.”

To accomplish this, the Navy Federal team leans on its Member Strategy department, which consists of a robust research group that runs surveys, focus groups, and individual feedback sessions with members. Having a team focused on user experience design and strategy helps get to the root of members’ needs. The credit union is so committed to those needs that its considering building more branches to foster more human relationships and deliver an even higher level of service. That might explain why it’s always at the top of Forrester’s Experience Index and has been one of the top two U.S. banking brands for the past seven years.

Meet Customers Where They Are

Ultimately, financial institutions must meet customers where they are to maintain good relationships. And it just so happens customers are currently online, in-branch, and everywhere in between.

Digital channels are here to stay. However, investing in digital channels doesn’t mean clients won’t still want the physical banking experience. Don’t leave those customers high and dry when they do walk in. Taking a hybrid approach means being ready for any way your consumer chooses to engage and providing a consistent level of service, no matter the channel.

Read more insights into the current state of the financial industry and what marrying technology and in-person experience can do for your FI’s performance.


This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
November 6, 2023

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