Branch, call center use is growing alongside digital banking

The future of bank branches was uncertain even before the global pandemic came along and drove consumers to use online and mobile banking more.

But recent research is telling bank executives that their customers not only find human interaction — quite often at a branch — important, but also less confusing and easier in some cases than having questions addressed online.

Research from Cornerstone Advisors indicates bank customers' visits to branch offices or call centers have increased right along with online and mobile use, partly because pandemic-related financial stress has caused them to have more questions than before. Overall, 38% of consumers said they have been interacting with their bank’s mobile apps more frequently since the pandemic began, while 36% said the same for the bank branch. Among millennial consumers, 42% said they were calling their banks more; 42% also said they were visiting branches more.

At the same time, banks have been closing branches: S&P Global Markets research found 3,324 bank branches closed and 1,040 opened nationwide in 2020. But the research firm cited 2021 as potentially the "year of branch closures" with the pandemic and technology advancements weighing heavily. Though numbers for 2021 won't be available for a couple of months, the trend most certainly continued with most large banks announcing branch closures this year.

"The branch is important, but it shouldn't be," said Ron Shevlin, director of research for Cornerstone Advisors, which conducted the research on customer interaction with banks earlier this year. "Nobody wants a relationship with a brick, they want access to people. In 2021, using technology to reach people is a more efficient and convenient way to reach people than driving down to a branch to talk to somebody,” Shevlin said during a webinar this week hosted by banking software provider Backbase.

One reason branches continue to be needed is that most banks’ mobile apps and websites don't offer an option to speak with a human or even schedule an online or physical meeting, he said.

What bank apps lack

In its survey of 3,105 U.S. consumers, Cornerstone found 37% thought going to a branch would be a faster way to address a problem or get questions answered, while 36% looked for answers online but couldn't find what they needed.

"The focus should be on human interaction," Shevlin noted. "The customer doesn't always know the tech [for online or mobile] or the tech isn't designed to answer their question."

Sometimes, the bank's online or mobile technology doesn't even allow a customer to formulate a question properly and "you need somebody to have a back-and-forth conversation on that," he added.

Cornerstone conducted its survey across all demographics in May and June of 2021 to study consumer interactions with banks.

American Banker and creative experience agency Monigle conducted similar research with roughly 8,500 adults ages 18 and older in March and April of 2021, examining trends and attitudes of consumer expectations in financial services, as well as evaluating financial institutions on factors proven to drive customer satisfaction and advocacy.

"Despite the popular conception that branches, ATMs and call centers are yesterday's tech, they still resonate as important points of financial institution engagement for today's young consumers," the American Banker research stated. "How financial institutions approach and resource the omnichannel experience is one key to driving an engaging and sticky customer experience."

Overall, the study found, younger consumers want personalized advice about their financial lives from their banks, while older consumers want more rewards and lower fees.

'A thing you do'

Banking has been on a long journey of changing from "a place you go, to a thing you do," said Jacqueline White, president of the Americas for Temenos, a Geneva, Switzerland-based financial cloud-based software provider.

Consumers can complete banking tasks online while at home, at a grocery store or even at their place of business.

"But banking is personal and you can't take the human element out of it," White said during an interview with American Banker.

Complex discussions about topics such as mortgages or financial planning represent scenarios in which bank customers are comfortable with the "figurative hand-holding" that speaking to a human provides, White noted. Some customers will be satisfied with a virtual one-on-one session, while others will want to go into the branch to talk, she said.

Data gathering and analysis, and established relationships, are key advantages banks have over fintechs offering banking services, White said.

"The focus for banks has actually shifted from low-cost channels like chatbots to personalized and analytics-driven customer journeys," White said. "Digitalization and the expense of branches are drivers changing the way financial institutions think about the way we bank."

However, because bank customers tend to be loyal to their bank for a lifetime in many cases, Temenos doesn't see branches going away entirely, she added. "Rather, that model will evolve," White said.

Eastern Bank's viewpoint

Boston-based Eastern Bank, with more than $17 billion of assets, has turned its focus to data collection and sharing as well as listening more intently to what customers want from the bank.

"We monitored customer behavior trends during the pandemic, as there was a higher use of online banking and we obtained information to gather insights," T.J. Steele, digital banking product manager at Eastern Bank, said during the Backbase webinar. “We saw some interesting trends, such as a higher adoption of online banking versus mobile banking, which was understandable because people were home.”

This data analysis also gave the bank information about the demographics of new enrollees, their tenure with the bank and usage within the channels. That data was sent to support teams so they could better support those customers.

From customer feedback, Steele said he learned the bank needed to improve the communications in its digital channels and include the option of human interaction.

"Like the complementary aspects of a good football team, where the offense and defense work together, the cross-channel experience at the bank has to be the same," Steele said. "The digital information has to be the same and as complete as when talking to a human."

The bank wants to operate "like the wingman with real-time data available for the customer [to help answer their questions]," Steele added.

Still, the customer is likely to continue to view the use of a branch as a unique need and experience.

"Interaction at a branch should be different from those in the digital experience because the task to be done, or that should be done, is different," Jason Goodwin, head of human-centered design at Eastern Bank, said during the webinar. Banks sometimes need to convey different information in their branches than they do in their digital channels, he said.

What will a future branch bank look like as banks contemplate whether to invest in digital technology or buildings?

"It's a desk and three chairs," Cornerstone's Shevlin said of a future bank branch. "On one side it's the bank employee and on the other side is the customer and his or her spouse. And they are talking."

It's not a matter of whether opening or closing branches is right or wrong, Shevlin added, noting it's more about making sure customers can interact the way they want.

"You don't need kiosks and tablets at the branch, because the customer has that technology at home," he said. "This is a matter of how much money you are putting into it and allocating to it."