Along with the rest of the retail industry, COVID-19 has shaken the financial industry, including retail
banks. Over the last year, banks have been challenged to engage consumers at a time when their
behaviours have rapidly shifted, strengthen their brand in an increasingly competitive landscape,
navigate through digital transformation, and manage heightened consumer expectations, all while dealing
with the economic impact of the pandemic on their business and customers.
As the world looks to economic recovery, retailers are hyper-focused on the future and how to succeed in
our new normal. For brick & mortar retailers, a renewed priority has been placed on a strong customer
experience, including how best to engage customers in a largely contactless environment and offer an
impactful brand experience that addresses shifting behaviour and expectations.
For retail banks, the in-branch customer experience is a powerful extension of online banking, yet many
banks are failing to offer a seamless online and offline experience, choosing instead to focus efforts
on online banking and mobile payments at the expense of their brick & mortar locations. Online,
banking customers are experiencing simple, personalized, and streamlined processes – perhaps
unsurprising given the focus banks have placed on offering customers an elevated digital experience.
Most brick & mortar branches, however, have fallen behind and continue to offer customers static
information and general messaging that doesn’t reflect customers’ needs, or which customers are
in-branch at different times of day.
When looking at the reasons customers open or close accounts with a financial institution, a Deloitte study
titled Reshaping the Retail Banking Experience
for the Customer of Tomorrow found that the main reason is customer experience, and yet only 44% of
customers trust their financial services provider. So how do banks foster a sense of trust and loyalty
with consumers, particularly with the challenges posed by COVID-19?
The challenge facing banks: Consistency of experience
Deloitte’s study looked at the current state of retail banking and customer expectations and found that
customer demands seen just a few years ago have rapidly evolved to include personalization and
consistency of experience. The report acknowledged that many banks are falling behind those demands and
expectations, ignoring the ‘customer of tomorrow’ and the impact of those customers’ characteristics on
the banking industry. Further, the impact of failing to meet the needs and expectation of tomorrow’s
customer are significant and may include not only customers choosing to move to a different bank, but
encouraging others to do the same. There is both a demand – and an opportunity – for banks to treat
customers like brand ambassadors and not just a client. Customer loyalty may depend on it.
Personalized banking and the customer of the future
In a recent study
PWC found that while customers
have changed the way they interact with banks, the same doesn’t hold true for the inverse. As banks look
to the future and find ways to attract and retain customers, millennials need to at the forefront of
that strategy - as of 2019, millennials
as the largest living adult generation, numbering more than 72 million in the US. The
millennial customer has specific characteristics – they are known for valuing authenticity and
purpose in brands, seeking out word-of-mouth recommendations, and having high expectations of brands
– including the expectation that they will have a seamless, consistent, and personalized brand
To meet those expectations and retain customers, forward-focused banks are leveraging and
integrating data to personalize the in-branch experience. With platforms such as OR, banks can
collect and use data to their competitive advantage, leveraging it to develop engagement strategies
that can lead to customer engagement and loyalty. The ability to integrate data and leverage the
insights gleaned to tailor store design, go-to-market strategies, and campaign execution is
increasingly defining success, and given the role that physical retail plays in building brand
affinity, the vital role technology is playing as a driver of success in retail banking will
continue to grow.
Strategic in-branch messaging
The practice of dayparting – scheduling messaging and consumer-facing content at different parts of
the day – has become a tool commonly used by digital marketers. The strategy of having ads or
messages only run at certain times is effective for obvious reasons and allows companies to
capitalize on shifting opportunities to engage consumers throughout the day. Many brands also use
the concept of dayparting in content pushed out through social media such as Twitter, with audience
segmentation influencing what content is pushed out when.
With the ability to strategically target consumers with customized messaging, dayparting is
increasing being adopted by retailers and financial institutions. Platforms such as OR provide banks
with the ability to develop branch profiles based on multiple data sources, resulting in a powerful
predictive modeling tool that can inform a dayparting strategy as well as how best to personalized
products, messages and campaigns, which drive conversion rates.
The path forward for improving retail banking customer experience
COVID-19 has proved challenging for brick & mortar retailers for many reasons, including that many
customers are spending less time in-branch, making an impactful in-branch experience that much more
critical. Even before the onset of the pandemic, many banks would have benefited from investing in
the in-branch experience, and COVID has only accelerated the need to strengthen customer engagement
and elevate it to the same priority that has been given to the digital banking experience.
As banks look to the path ahead and ways to increase revenue and maintain and expand market share,
the in-branch retail experience will be a critical part of that strategy. And as millennials’
earning power continues to grow over the coming years, reaching that segment of the population in an
impactful way will also grow in importance, requiring banks to have a dedicated in-branch customer
engagement strategy focused on personalization.
Banks need to invest in engaging today’s banking customer and the banking customer of the future,
and OR can help get them there.