Last year, leading customer service commentator Martin Hill-Wilson proclaimed that “the more we adopt self-managed, digital channels which optimise our expectations for 'always there', real-time delivery, the more we are rediscovering the expectation for human engagement when it matters”.
In banking this appears to be an undeniable truth. A new study from GMC Software and TNS has found that a large proportion of consumers still hold human engagement dear, especially during interactions where trust plays a more critical role.
79% of 2,000 UK consumers declared their concern at the prospect of customer service dropping due to widespread automated processes being introduced into their banking experience.
68% said that they felt they were “just a number” to their bank, with 43% considering a switch of provider as a result.
Paradoxically, bank branches were responsible for only 20% of all transactions in 2015, yet many consumers feel uncomfortable performing anything but simple tasks via digital means, such as mobile apps and online banking.
Indeed, 62% of respondents said they were only using banking apps for the most basic banking tasks and, crucially, 56% of respondents said they didn’t want technology to mimic the ‘traditional bank manager’ experience.
David Webster, a financial services specialist at GMC, says this trend should be forcing incumbent banks to readdress their engagement channels and ensuring that human interaction is available more readily during moments that matter.
“These are interesting times for the industry: although as people know, interesting is not the same as easy,” said David Webster, Financial Services specialist at GMC Software.
“With the Competition and Markets Authority’s “Open Banking Revolution” still to get underway, we are on the cusp of a huge upheaval in both how consumers communicate with their banks, and the expectations they have of them. When it’s easier than ever to compare banks’ offerings and switch or spread your accounts across multiple providers, banks will need to offer something very special to hang on to their customers.”
68% said that they felt they were “just a number” to their bank
Whilst GMC’s survey highlights the rise of the challenger bank as a technological alternative, respondents were largely in agreement that digital-only, self-service banking was not necessarily a panacea, and that relevant and timely engagement was still critical to the experience.
“Ultimately, effective customer communication is key; if a bank cannot tell its customers what they need to hear, when they need to hear it, over a channel that they are listening to, then customers’ opinion of their service will continue to fall,” Webster adds. “This holds just as true for newer, challenger banks as for their more established rivals.”
Of the 20+ challenger banks currently being developed in the UK, Techworld’s Scott Carey ranked Atom, Monzo, Starling and Tandem as the best, yet every single one is a stand-alone mobile app and none offer a bricks-and-mortar future. The only recent exception in the UK has been Metro Bank, which has declared its intent to invest heavily in physical branches regardless of market trends. Only recently, Metro's managing director, Iain Kirkpatrick told MyCustomer that incumbents were failing their customers by focusing too heavily on digital products.
"The incumbents are making things worse for their existing customers because they’re investing in digital channels at the expense of physical channels.
“They’ll quote that footfall is down in their branches, which means the experience becomes worse for their existing customers which means they’ll stop coming in and then footfall goes down. And then they’ll say the branch is dying, so let’s close it. If you go into some branches of certain banks, there will be a person with a clipboard pointing people to the next available machine. But it should be the customer’s choice to decide which channel they want to use. Incumbents often talk of driving channel migration. Shouldn’t customers get to choose?”