The local bank branch has been the traditional centre of customer experience in banking. It was more than just a convenience, it was the place where customers interacted directly with the bank as an institution, and with its employees. This changed in the 1980’s and 90’s as banks began to centralise their customer service. The purpose was to cut costs and make customer service more efficient. This even reached a point where if a customer walked into a branch with a problem, he or she would be directed to a phone in the corner that was connected to a central customer service hub.
This didn’t always work out so well, as customers began to feel that they were being shuffled off as if they were an annoyance. Also customer service agents, no matter how well intentioned, weren’t “on the ground” where they could deal with a customer directly. Instead they had to deal with customers through the bank’s layers of bureaucracy. The customer might be in one town while the customer service agent was halfway across the country in anothe
Then, a new era dawned as digital technology and advanced and mobile interaction became possible. Where once customers considered the branch to be the centre of their economic environment, they became increasingly unconcerned with whether or not their particular branch even stayed open.
Digital technology had disconnected the customer from the branch and customers have become increasingly disconnected as mobile and online channels continue to increase. In a sense, this is good for banking. Branches are high cost elements of infrastructure. Banks are enabled, as mobile and Internet usage increases, to strategically close low performing branches. This doesn’t mean that branches will disappear as customers are still inclined to purchase high value financial products at branches. There is something important and reassuring about discussing important financial decisions, face to face with an expert.
And yet, customer experience is being changed by digital technology. Customers are continuing to embrace the convenience and increased capabilities that mobile and online banking provide. The risk to banking, in general, is that customers may come to regard their relationship with their bank as purely transactional. That is, the bank will no longer be a central part of the community or its customers financial lives.
There may come a time, in the not too distant future, when more customers will be willing to accept professional financial advice online, and traditionally digital companies, like Google, will become major players in the financial marketplace. This isn’t necessarily bad for traditional banks as disruption opens up new markets and the possibility of new financial products.
It’s a matter of adaptation as customers become more familiar with the expanding capabilities of modern financial management and make demands that reshape not only banking, but the entire financial industry.