The Point

Trends in Retail Banking

Jan  10 
Author Picture 
Eric Jones  Senior Vice President, Product Management, Bank Solutions, Fiserv 

It's a new day in retail banking – a time defined by speed, innovation and transformation. Whether they use a branch or a smartphone, people expect to access their money and make transactions quickly, easily and reliably.

Now more than ever, financial institutions are rethinking how their branches operate – and how to deliver services to people who rarely or never cross their brick-and-mortar thresholds.

Managing a growing range of channels and preferences continues to be a challenge for banks and credit unions. We've learned that when it comes to financial services, people want the best of both worlds. According to the Expectations & Experiences quarterly consumer trends survey from Fiserv, consumers are more likely to visit the branch to deposit checks and withdraw cash, while digital channels are more often used to check balances, pay bills and transfer money.

Financial institutions are embracing a new model of customer interaction – a hybrid approach that emphasizes self-service capabilities and the digital channel within the branch.

Look for the multichannel evolution of retail banking to continue in 2017, fueled by the transformation of the physical branch, the growing effect of mobile technology and the largely untapped potential of data analytics. Here are three trends to watch.

1. Branch Transformation

Financial institutions are embracing a new model of customer interaction – a hybrid approach that emphasizes self-service capabilities and the digital channel within the branch. The immediacy of digital interactions is changing expectations for the customer experience in the branch. That means blending tablets, integrated teller machines, biometric authentication and other devices with the face-to-face contact people expect when they walk into a branch.

How can financial institutions persuade people who come into the branch for transactional activities – depositing a check or withdrawing cash – to experiment with and adopt digital forms of interaction? It starts with leveraging technology to better serve and advise visitors in the branch. And, as more transactions move to digital, financial institutions will likely reduce costs and free staff for other tasks. The change will also contribute to branches becoming more advisory environments where people can find help for more complex needs, such as mortgages, business loans and wealth management services. Future branches will likely have smaller footprints and some may have more of a café ambiance, depending on the particular financial institution's strategy.

2. Mobile-First Users

People who primarily use their smartphones to manage and move money are affecting product development, delivery models and branch activity. Mobile-first or mobile-only users require a solution that goes beyond simply checking balances and transferring funds. They expect to be able to use mobile for every financial need, only going online or to the branch as a last resort.

Consumers don't think of banking in terms of separate channels. They may start an activity such as opening a new account on a smartphone, but then go online or into the branch for next steps. People increasingly expect that all previous activity will be seamlessly captured in real time across every channel – and that they'll be able to monitor and manage their finances with meaningful, actionable alerts. That kind of integration and capability requires continual investment in mobile technology. Financial institutions should be thinking about customer acquisition and relationship-building strategies that don't involve someone walking into the branch.

3. Data Analytics

Until recently, only the most progressive financial institutions fully leveraged data to influence revenue, customer acquisition and cost efficiency, often building much of their capability from scratch. Leading technology providers are now scaling analytics solutions so that financial institutions of any size can more readily target offers, promotions and services to consumers based on their preferences, past actions and predicted activity.

And when data is coupled with mobile delivery, financial institutions can present the right offer at the right time, such as a loan offer when a customer is researching a vehicle purchase online or walking through a dealership. Especially for financial institutions without large-scale in-house data expertise, enlisting the help of a technology provider can lower up-front technology and implementation costs and provide the necessary expertise to understand and create business value from the data.

Staying Relevant in the Face of Change

Financial institutions spend a lot of time cultivating their brand to retain and grow the next generation of banking customers. Those that succeed stay ahead of consumer expectations for speed, design and innovation in part by making changes in the branch, effectively serving the growing number of mobile users and harnessing the power of data analytics. To stay relevant in the face of such change, maintaining the status quo is not an option.

Visit The Point to learn more about what's next in financial services, including trends in digital banking, lending, risk and fraud, and wealth management.