Should FIs Focus on Digital or Branch Service Offerings? New Report Suggests a Holistic Approach
By W.B. King
After polling 575 consumers across the U.S. about whether they prefer banking online or in the branch, Agent IQ, in partnership with Worldwide Business Research (WBR) and Future Branches, found that while the pandemic decreased branch visits, customers desire a hybrid banking experience.
“Many consumers still prefer the in-branch experience for certain types of transactions and interactions with their financial institutions,” the report, “Banking from Anywhere: Consumer Perspectives on Mobile, Remote, and In-Person Banking," stated. “Many banks and credit unions are also adopting new digital capabilities within branches themselves, including virtual consultations and virtual branch concepts.”
Those surveyed were between 18 and 60 years old, with 55% being female and the balance being male. Fifty-four percent earned an annual income of $25,000 to $99,999, and 74% banked with traditional banks and 26% at credit unions.
“Fifty-nine percent visit one of their financial institutions’ physical branches at least once per month, including 26% who visit at least once per week,” the report stated. “Forty-seven percent say the pandemic changed the way they prefer to do their banking. 55% will not change their banking habits over the next three years, but 40% will do more online banking and less in-person banking.”
The following eight banking options were preferred via digital banking: transferring money between accounts (84%); making bill or loan payments (83%); applying for credit cards (73%); conducting account maintenance, such as changing personal information (67%); wiring money (63%); depositing checks (58%); applying for other types of accounts (e.g., CD, investment) (54%); and applying for loans (53%).
Respondents performed the following three actions in the branch opposed to online: seeking consultations or financial advice (68%); opening or closing an account (55%); and resolving service issues (52%).
Digital Relationship Banking
The report found that while digital banking statistics are on the uptick, 73% of respondents want in-person “proactive financial advice” from their banking institution. To this end, the California-based Agent IQ, which purports that “digital relationship banking” doesn’t exist in the market, now offers a new platform, Lynq, that was designed to help FIs create personal relationships that can “provide proactive and supporting service anytime, anywhere."
Slaven Bilac, CEO and co-founder of Agent IQ, explained the product, which is being utilized by many FIs, including BMO Financial Group, has been on the market since 2022.
The artificial intelligence (AI)-augmented platform, noted Bilac, blends “the best of both human emotion and empathy with the speed and efficiency of computer intelligence.” This approach allows customers to ask account and banking-related questions via its chatbot, he said. If a customer prefers to speak with a banker one-on-one, they can immediately request it and ask the same questions as they would in person.
With assets of $1.14 trillion, the Toronto, Canada-based BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and services to 12 million customers and conducts business through three operating groups: personal and commercial banking, BMO wealth management and BMO capital markets.
“Our partnership with Agent IQ and its innovative Lynq platform is another example of BMO’s digital first strategy that is focused on building a digitally-enabled, future-ready bank that drives progress for our customers, unlocks the power of our people and delivers loyalty, growth and efficiency,” stated Brianna Elsass, head of U.S. Digital Channels at BMO. “Through this partnership, we’ve created a digital communication experience that empowers our customers with expediency and control, while allowing them to connect with a banker of their choice anywhere at any time.”
Kaustubh Srivastava, lead technology officer of Digital Banking at BMO, further explained that the platform also allows BMO’s personal and business banking customers to choose “their preferred banker through Lynq who then becomes their single point of contact within the bank.” This representative then connects the customer with subject matter experts based on their questions, such as loans, credit cards and retirement planning.
“The ability to communicate with our customers in a digital environment is vital to meeting their needs,” noted Srivastava. “Thanks to our collaboration with Agent IQ, our customers are able to digitally communicate directly with a BMO banker, ensuring timely questions are addressed to meet their unique banking needs.”
Hybrid Banking Approach Explored at Upcoming ‘Future Branches’ Conference
With most survey respondents saying that their FI provides “comparable” in-person and online experiences, there is still room for improvement. Sixty-three percent responded that their FI is decent but not exceptional, with 23% saying their FI is ahead of the curve. Thirteen percent said their FI needs improvement or falls short, and 3% said its FI is “not innovative at all.”
When asked if their FI provides the same level of service digitally as it does in person, 61% said services were equal, with 20% saying its in-person service was better. The balance claimed the opposite.
“Achieving this status requires a synchronized approach to both online and in-person banking,” the report stated. “Many institutions have discovered that the two modes don’t have to be mutually exclusive. They can complement each other, and customers can get the same level of service on either channel.”
Banks, credit unions and FIs, the report continued, must ensure customers receive the same level of attention, whether online or in-person. “This will require a holistic approach to customer experience design, which enables the company’s digital capabilities to inform its in-person experience, and vice versa.”
The reports encourages FIs to continually investigate what a hybrid model might look like at their institution. To assist in this effort, Future Branches, the organization that puts on both Future Digital Finance and Future Stores events, will offer a two-day networking conference exploring how FIs can capitalize on existing physical spaces by considering new technologies, retraining associates and reimagining branch operations. The event will take place Nov. 28-30, 2023 at the JW Marriott in Austin, Texas.
“Provide customers with more remote capabilities regarding their accounts but ensure they can always connect with a person to resolve issues. The respondents don’t want to lose the types of in-person experiences that have become standard in banking,” the report offered. “Leverage virtual consultations and virtual banking services. The respondents have indicated that they have an interest in these capabilities, and they’d like to use them as part of a remote banking experience.”