Going deeper into the future of financial institutions

While it’s not yet time for the “year in review” articles, I’ve seen an interesting trend this year in financial publications’ discussion of branches. Some articles decry the end of branches in preference for all things digital or mobile. Others say that branches have their place, but in a different form that the branches of yesteryear. ITMs and universal bankers have been thrown in the mix as well, melding high tech and high touch concepts. In the end, the general tone is that an omni-channel approach is needed, balancing physical, automated, and virtual channels. Online and mobile are essential to be a relevant competitor in today’s environment. Branches become sales and service centers that also establish the institution’s image and presence in its market.

So let’s dig a bit deeper. Isn’t one of the goals of most financial institutions to make their customers’ financial lives better? [Something akin to that shows up in most of the mission statements I see.] How is that goal achieved? My theory is that it is best achieved by going deeper. An omni-channel model provides convenience for customers. That’s great, but most competitors offer a similar degree of convenience, so the customer’s life isn’t better simply because he/she has access to their accounts 24/7/365. Pricing? Rates are still very low and competitive, so there isn’t much differentiation based on rate. Personal service? In 30 years of working with financial institutions I’ve never heard one say they have poor personal service. A few will candidly admit they need improvement. Some need to wake up and take a hard look at themselves. But, for the most part, customer service isn’t the compelling differentiator. Further, is my financial life BETTER because of personal service?

Most of our financial lives are rather mundane. We have weeks, months, even years of routine transactions. Once in a while our financial lives are punctuated by the big events: marriage, kids, new homes, college, new businesses, expanding businesses, declining businesses, loss of loved ones, unexpected expenses. When these big events occur, many of us are faced with the need to make financial decisions and we may or may not have the information needed to do so.

Let’s use a story or two to illustrate the point…

TALK RADIO

microphone
While driving around town and listening to talk radio one day I came across a financial program. A listener called in and asked if he/she should get a 15- or a 30-year mortgage. After many words (and a commercial break) the guest host couldn’t answer the question. Why not? Because “it depends.” The talk radio format is insufficient to allow the expert to understand the borrower’s circumstances sufficiently to make an appropriate recommendation. Regardless of the format – in person, virtual, telephone, chat session – financial institutions can only make their customers’ financial lives better by digging deeper and understanding what they’re trying to accomplish. Then they’re positioned to outline the strategy that best supports the customer’s goals.

IN THE BRANCH

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One day I was interviewing a branch staff and met a customer service representative who clearly understood her purpose. “Give me ten minutes with a customer and his credit report and I’ll save him money,” she declared. She then rattled off the process – refinancing mortgages or second mortgages, refinancing or consolidating car loans, moving credit card balances. With each move she could describe the likely financial benefit for the customer as well as the benefit for the institution. She could make the customer’s financial life better because she knew how to go deeper. She knew what to look for and how to think holistically about the customer’s situation. That has to be the goal, regardless of the interface. Perhaps the sanity check is to ask if our remote and virtual channels are truly up to the challenge. I would dare say that this CSR creates customers for life – the type who will tell their friends about her and her institution.

So my point is this: financial institutions can indeed make their customers’ financial lives better, but it requires them to dig deeper into relationships when life’s big events occur. This can occur over any variety of platforms, but it must occur. And as these opportunities present themselves and become success stories, the institution has an even deeper well to draw from in terms of marketing and training.

BONUS SECTION: CUSTOMER SERIVCE GONE AWRY – WHAT NOT TO DO

I Don’t Know – Lack of front line training risks account relationships.

The Ivory Tower – Management’s lack of awareness of branch conditions spells poor service.

Come Back Tomorrow – Inability to respond may propel relationships out the door.

Hello, There – Sales culture needs a sales environment for optimal success.

Know Your Customer – Lack of customer knowledge could lead to lack of customers.

John Hyche

John Hyche

At LEVEL5, “Think Strategically, Build Creatively” is not just a tagline, it’s the culture. John Hyche guides the “think strategically” portion of LEVEL5’s services. In this role, John ... Web: www.level5.com Details