|CHANNEL ROADMAP: Not technology per se, but improved customer experience is the key|
Consumers want banks to deliver more personalized financial advice and convenient banking services through both virtual and physical channels—ushering in a new era of omnichannel banking.
This is the main finding of Cisco’s survey of 5,300 consumers in five developed countries (Canada, France, Germany, United States, and United Kingdom) and three emerging countries (Brazil, China, and Mexico).
“Banking is transforming rapidly, driven by changes in regulations, macroeconomic pressures, new customer demands, technology advancements, and increased competition,” says Jorgen Ericsson, vice-president, Global Financial Services Practice, Cisco Internet Business Solutions Group. “A fundamentally new approach to banking is needed with an emphasis on a combination of both improving customer experience and simultaneously reducing costs. Our study shows that customers are ready for a new era, and the solution will be omnichannel banking.”
The survey explores consumer attitudes and preferences toward different channels, both physical (in person at a bank branch) and virtual (mobile, online, video conference, social media). It recommends strategies that may help drive bank profitability and increase customer satisfaction. In addition, the research included testing several innovative banking concepts that address alternatives within the branch model and new strategies for virtual models.
Key results include:
• Despite the popularity of virtual banking, global consumers still value bank branches for personal attention, and favor expanded services that include different kinds of financial advice—creating an opportunity for the omnichannel branch.
• Consumers globally rejected the idea of highly automated branches with limited personal attention and expertise, with 26% of consumers saying they would leave their current bank if personal attention and advice were eliminated from their bank branch.
• Sixty-five percent of respondents globally (56% in developed countries and 81% in emerging countries) would be in favor of bank branches that offered an expanded portfolio of financial and advisory services (financial education, legal, accounting, tax, and insurance).
• Overall, consumers want to use all the options available to them across physical and virtual channels. Frequent users of virtual channels also visit branches more often, with 30% reporting more than two visits per month.
• Forty-five percent of consumers strongly favor a total virtual banking alternative to one where they’d use highly automated branches with limited advice or personal attention (23%).
The survey also reveals that consumer preferences for service specialization by channel vary by region:
• Internet: 78% of consumers in developed markets and 72% of consumers in emerging markets prefer to use bank web applications for paying bills, managing accounts, checking balances, and handling other basic transactions.
• Mobile: 13% of consumers in developed markets and 18% of consumers in emerging markets prefer to use mobile-banking applications for real-time expense tracking, personal finance management, and payments.
• Video: 23% of consumers in developed markets and 43% of consumers in emerging markets saw the use of video conferencing as a way to enhance the quality of advice in situations where access to quality expertise is a concern.
• Social: Only 1% of consumers in developed markets and 8% in emerging markets indicated a preference to use the social-media channel for conducting banking transactions.
Consumers’ concerns about protecting personal information could be a roadblock to the quick adoption of omnichannel banking, however:
• Significant concerns about privacy, security, and identity theft were prevalent among consumers in both developed markets (65%) and emerging countries (53%).
• 42% of consumers consider banks to be the most trusted stewards of their digital information, ahead of the government (19%), telecommunications companies (6%), and social media sites (4%).
• An “opt-in’ approach could remove roadblocks: 29% of consumers oppose giving complete access to personal information for value propositions; however, they will share personal information on an opt-in basis.
To address the omnichannel-banking trend, Cisco also announced the Cisco Remote Expert Smart Solution for Retail Banking, which provides virtual face-to-face meetings via high-definition video between customers and specialty lending, wealth management, and other banking advisors—from any bank branch, in real time. Cisco Remote Expert for Retail Banking can help banks maximize the efficiency and productivity of financial services advisors, so they can capture customer business at first contact and provide the personalized service that customers desire.
[This article was posted on July 17, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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