Do physical bank branches still hold value?
Retail Banking Trends
What We Did
We gathered secondary research and conducted an online survey of approximately 700 Gensler employees to explore the evolution of consumer interaction with banks. We then facilitated an “idea charette” in Gensler’s New York office to identify ways in which a new design or different type of bank branch could respond to customers’ evolving relationship and interaction with their banks.
As with other retailers, the role of bank branches appears to be diminishing as online interactions and consumer technology play an increasingly large part in everyday banking—from ATMs to mobile apps that let you check balances, transfer money, and deposit checks from anywhere. Our exploratory survey results suggest that usage of bank branches for purposes other than the ATM is very rare: 67% of respondents visited a branch a few times a year or less, and only 7% visited once a week or more. Even when we do visit branches, the interaction is largely transactional: Only 22% visited for financial advice versus 72% to make a deposit.
However, while virtual or online interactions seem to be dominating the banking experience—95% of our survey respondents use online banking, and 82% use it at least once a week—consumer trust in this technology remains uncertain, even while an unstable economy has made such trust critical to the future success of the banking model. Trust in banks themselves also remains uncertain: According to Edelman’s 2012 Trust Barometer, the percentage of consumers who expressed trust in banks fell from 69% in 2008 to only 35% in 2012.
In order to succeed, banks must embrace the potential for technology to make the lives of their customers easier and more convenient, and recognize a necessary shift in focus for their in-person locations. Physical locations are an opportunity to keep and engage customers: In our internal survey, the top reason why respondents remained a customer of their current bank was its convenient branch locations; and a 2009 Mintel Comperemedia survey reported 65% of adults prefer to get up close and personal at a bank branch to communicate.
Customer-centric strategies and in-person strategies that complement technology offerings present opportunities to create connections with customers through multiple channels. Improving transparency is necessary to help build trust in both online tools and with banks themselves. Banks can use the physical environment to build trust in their brand and promote more authentic, sustainable values— from environmentally sustainable bank branches and headquarters to community integration and investment.
What This Means
Provide multiple settings and ways to interact, both virtually and in person. A variety of interactive spaces let customers select the setting they’re most comfortable with and eliminates barriers between banker and customer.
Give the customers control. Digital in-store communication offers more current, customizable, and compelling interaction with less paper waste. An interactive welcome kiosk, for example, allows customers to choose what they want to accomplish and avoid salespeople on the prowl.
Use technology wisely, and integrate with personal tech when possible. Touch-screen technology empowers customers to control interactions and ensures that personal records follow them.
Take advantage of in-person interaction to build relationships. Use familiar, natural design elements to make customers feel more comfortable and at ease when entering the bank and sitting down to discuss personal and private information.
Many banks have made significant strides in improving their online and mobile banking offerings, delivering on the promises of mobile banking and shifting the function of the traditional bank branch. However, trust and personal relationships continue to be important for building customer loyalty. Other retail sectors have begun to position the in-store experience around community building rather than selling. There is an opportunity for banks to follow that trend to continue to invest in customer engagement. Bank of America is making strides in this direction and gained media attention for a new breed of ATMs with integrated video displays that enable customers to speak with bank employees directly and outside normal banking hours.
We see the bank of the future as a place focused on customers, not just on their money. It’s a combination of convenience and comfort. It lets customers connect, explore, learn, and make choices. It’s welcoming, not overwhelming, and most of all, it’s human.
Lance Boge, Tom Bittner, Virginia Sertich