The Customer Effect

Striking the right balance between branch and mobile banking

  • Mobile interactions incur a cost of about 10 cents, a small fraction of the $4 cost of a teller or call-agent interaction.
  • U.S. banks would save $11 billion annually if customers’ branch and call-center use declined to the Dutch level.
close

Email a Friend

Striking the right balance between branch and mobile banking
The common mode of thinking pits mobile banking against the traditional bank branch as a zero sum game. Though consumers do appreciate the ease of use and convenience of mobile banking, for the most part, they like to know the branch is there. Mobile banking is a top strategic priority for most banks, not just because of the good customer response, but also because of the cost reduction associated with it. Each mobile interaction incurs a variable cost of about 10 cents, a small fraction of the $4 cost of a teller or call-agent interaction, according to Customer Loyalty in Retail Banking 2016, a recently published report by Bain and Co. When comparing the two, both on price and customer satisfaction, mobile is a clear winner. However,  the off-the-cuff conclusion, to gradually shut down most branches, is a false one. In most countries surveyed, shutting down branches was accompanied with some sort of negative business outcome. Many customer either switched banks after their branch closed or didn’t switch but started using products of other banks. screenshot-www-bain-com-2016-12-12-09-52-53 How can banks ensure access to tellers while keeping costs down? Some European banks might have the answer. The Netherlands was one of the first countries to adopt mobile banking and Dutch banks began to reconfigure their branch networks a decade ago. Dutch banks have not completely eliminated the traditional branch, though headcounts are way downs. Instead, they changed the nature of the branch. ING, for example, has side counters in bookstores and tobacco shops. SNS has franchise arrangements with insurance agents and others. Most customers still have access to a banker in walking or biking distance, but in a streamlined, low-cost format. Bain and Co. estimate that the 25 U.S. banks would save $11.4 billion annually in aggregate if customers’ branch and call-center use declined to the Dutch level, and the banks reduced headcount accordingly. These findings are especially important for small or regional banks which might be struggling in an environment of high capital requirements and low interest rates and are looking to cut costs.

0 comments on “Striking the right balance between branch and mobile banking”

Sponsored, The Customer Effect

Voice of the Customer: How “active listening” drives meaningful consumer engagement

  • Successful bankers act on feedback from their customers in relation to in-person or digital experiences, as consumers hold the key to improving how financial institutions conduct day-to-day business.
  • Today’s consumers have very little patience for financial institutions that do not place them at the center of the customer journey. Ignoring feedback from critical customer journey key points can drastically impede customer acquisition and retention.
Argo | January 19, 2023
Banking, Sponsored, The Customer Effect

How one bank is successfully building deeper customer relationships through digital customer engagement

  • Despite the gains in convenience and capability that digital channels offer, bankers and their customers are missing the relationship aspect of banking. People still want to connect with people.
  • Banks are now shifting their thinking beyond simple “digital transformation” toward “digital customer engagement” and how to leverage the digital channel to support more meaningful customer interactions.
Agent IQ | January 03, 2023
The Customer Effect

The financial state and widening inclusion gap of the LGBTQ+ community

  • A major portion of LGBTQ+ people is currently underserved by traditional financial institutions.
  • The queer community urges the sector to be more inclusive in the marketing and provision of its products and services.
Sara Khairi | December 16, 2022
Sponsored, The Customer Effect

Mobile banking outlook for 2023: Why push notifications are more important than ever

  • Mobile banking usage is quickly growing in popularity as account holders are afforded 24/7 access to their finances and enhanced ease of use.
  • Push notifications enable financial providers to take advantage of this surge by driving account holders to their mobile banking apps and increasing customer engagement.
Larky | December 02, 2022
Sponsored by Visa, The Customer Effect

Holiday travel is around the corner — is it time for a customer experience refresh?

  • New research finds 41% of U.S. adults are planning to travel this holiday season.
  • Nearly three years since the onset of the pandemic, 40% of surveyed travelers reported changing their travel behaviors.
Visa | November 14, 2022
More Articles