Branchless high-streets: How banks can improve customer engagement

By Karen Wheeler, Country Manager and Vice-President, Affinion

In May 2018, the city of Hull will lose its last remaining Co-op bank. By no means a small city, it will leave Co-op customers ‘branchless’. The announcement is just the latest in a string of closures across the industry, which follows the axing of a record 800 branches in 2017.

It’s estimated that at least 300 more bank branches will close across the UK in 2018 –  all of which are in response to an upward trend that’s sweeping the nation: online banking. Research in January found that, for the first time ever, online banking has become the UK’s primary method of banking.  As in-branch ‘face-time’ visits decline, and consumers increasingly prefer to bank digitally, whether it’s online or via a smartphone, it’s no wonder that Britain’s banks are having to adapt and revise their priorities.

When you look at the bigger picture, with digital-only fintechs hot on the heels of traditional banks and low interest rates impacting providers’ bottom lines, closing branches seem an obvious and reasonable reaction.

But with this comes less face-time, traditionally a key part of the customer journey – so what can banks do to improve customer engagement and loyalty in this ever-changing and digital first landscape?

Banks need to get personal

Every interaction with a customer is a chance for banks to impress them with a personalised service, ultimately making them aware of other areas and ways in which they can add value to their lives. However, a report by GFT recently found that a number of banks aren’t doing enough of this and are missing out on extra custom due to a lack of personalisation capabilities. It revealed that 67% of consumers said they would be more likely to take out a loan or credit card with their current bank if they received personalised advice, with 68% stating that the relationship is purely a ‘transactional’ one.

Traditional banks could learn a thing or two from challenger banks like Monzo, that are already doing this well. The mobile-only bank uses data on its customers’ spending habits to offer them financial advice, ultimately helping them to save money, budget responsibly and find better deals. For example, last year its data showed nearly 30,000 of its customers used their Monzo card for transport payments in London – so Monzo advised them they could save money by investing in a year-long travel card.

Digital bank Atom is also leading the charge in this space. In a clear sign that it wants to offer customers something different, it acquired software company Grasp, which specialises in games and virtual reality development, to improve its digital platforms. Atom’s app lets customers personalise the app experience by choosing a logo, name and colours. By allowing them to adapt the interface to suit their personal preferences, the banking experience becomes truly unique and improves customer engagement and experience.

In a world with fewer bank branches and increased competition from challengers, personalisation using data-driven marketing presents an opportunity for banks to increase customer engagement and improve the customer experience. It’s no longer enough knowing your customer’s birthday. The next step is to know their relationship status, their favourite bands or artists, where they like to go on holiday and how active they are on social media. Only then can banks offer their customers the rewards and experiences they are craving and that are truly built for them.

Provide face-to-face alternatives

While the role of face-to-face interaction in the customer engagement journey is set to dwindle as result of bank closures, it should by no means become non-existent. The human touch remains hugely important, and the option should be there for those customers that desire or need it.

In rural communities, banks are experimenting with face-to-face alternatives to offer a new kind of customer experience. A popular alternative that a number of providers have invested in are mobile bank vans. The NatWest Mobile Branch Banking service currently operates five days a week and publishes a weekly timetable, with its vans visiting a number of different towns to engage with customers.

The vans can accept deposits, cash withdrawals and bill payments, while all vehicles have on-board customer phone facilities. RBS has also started employing “community bankers”, with an estimated 55 now existing across the UK. With closures imminent, we can expect methods like these to ramp up, with banks investing in an appropriate mix of face-to-face alternatives to sit alongside online banking in those areas that need it.

Providing a seamless experience across multiple channels should be at the core of all banks’ customer engagement strategies, regardless of the shifting emphasis from in-branch to online. But as face-to-face interaction becomes less of a priority for customers, it is vital that providers start exploring other methods of engagement. Personalisation is now a key driver of success, as challengers are demonstrating on a routinely basis. By building personalised experiences and offers outside their normal remit, traditional banks can prove they can withstand change and add real value to their customers’ lives in new ways.