The retail banking sector is experiencing a profound period of transformation. Banks, credit unions, and other financial services providers need to respond to changes in both demographics and customer expectations driven by other sectors, including retail. Financial institutions are doing away with traditional approaches and embracing digital tools to attract and retain Baby Boomers, Gen-X, and Millennials and build their relevance to the next generation of customers. But how can banks ensure that they have the correct balance of physical branches and digital initiatives to appeal to all generations?
That’s where Steve Rymers comes in. Steve is the Director of the Financial Services Location Analytics and Data practice at Pitney Bowes. Despite reports of their demise, Rymers is happy to report that retail branches are still very important assets for financial institutions, especially if they can reduce expenses and optimize their performance. Rymers and his team help financial institutions plan and optimize their customer engagement strategy across physical branches by building market simulation models of a bank’s markets. These models utilize the bank’s customer and financial data as well robust sets of demographic, product demand, and competitive data. These analytical tools predict consumers behavior towards various delivery channel options and allow the bank to assess the economic and customer impacts prior to implementing any changes.
“There are significant changes in the branch today, including the role of technology and how the consumer wants to use the branch. Given these changes banks need to continuously assess how they can leverage their physical footprint to maximize and maintain their competitive advantage,” said Rymers. While physical locations use to focus on transactions, branches are becoming a place for advice, consultative selling, and problem-solving focused on customer needs.
Financial institutions can ensure they have the right balance of physical presence and innovative technology to keep their consumers engaged by following the disruptive fintech market. Many fintech firms offer similar products and services but lack a physical location which many consumers want. Facing this competition from non-bank technology firms is pushing banks to revolutionize how they deliver products and services and focus on customer experience in their branches. “Banks have a unique challenge in that they are offering products and services across many generations. From the Millennial couple just starting out to the Baby Boomer retiree – they all desire to have a branch nearby but may use it differently,” said Rymers. “The physical branch network is the greatest home field advantage that most banks and credit unions have today, but the challenge is getting the right mix of technology and physical presence to serve the customer’s needs.”
The key to getting these diverse customers in the door and offering them a right experience? Getting to know them. Rymers explained that most banks use internal customer sales and service channel data and some demographic data to understand their needs and behavior. However, deeper insights can be gained by utilizing this data in predictive models that sift through the nuances within the data and develop a clearer picture. This behavioral data and analytical techniques can help banks answer who their best customers are and provide direction that helps maximize the bank’s potential within each market that they serve. “The availability of data and technology platforms today can allow for a more sophisticated approach in providing a great customer experience,” said Rymers.
Financial institutions today face many challenges but those who take the time to understand their customers can offer the right mix of physical locations and technology to best serve them —today and in the future.
To learn more about consumer engagement in retail banking, click here.
