The Customer At The Centre Of Britain's High Street Banking Conundrum

Every bank and building society is working on a plan for its high street presence. An arduous task given the future of high street banking is somewhat unclear. What is certain, however, is the trend toward a more distributed, multi-channel banking model – mobile apps will continue to become more powerful, self-service devices will offer more functionality, and customer preferences will continue to evolve.

Just think about it for a moment, less than two decades ago, customers were in-branch only. Now, in an age of hyper-personalisation, customers want to engage with your financial institution on their own terms, regardless of location.

Or do they?

If the press is correct, then the one thing that seems to be lacking most in high street banking strategies is a plan to alleviate customer concerns about branch closures – customers are genuinely "frightened" by the prospect of being left without a proper bank.

So how do you demonstrate to your clients that scaling back high street branches is an essential element in a program of adapting and improving? And, how do you ensure that your services are more accessible and trustworthy, in the absence of a physical branch?

The latest RBS public notification (27th May 2018) announced that branches were being closed and RBS have said that “the closures were in response to the increasing numbers of customers using mobile and online banking.”

The first quarter of this year saw branch transactions down 7%, the use of cheques and cash machines both down by 17% while downloads of the bank's digital app rose sharply. The Scottish Affairs Committee stated that the closures would remove "vital services relied upon by businesses and disproportionately affect vulnerable customers". Committee chairman Pete Wishart said: "The loss of a permanent bank, and the services it provides, cannot be replicated by the occasional visit of a mobile bank or community banker.”

The plan from RBS seems clear enough: reduce their physical presence in favour of mobile banking. But what about customer confidence and preference? Not all customers trust the mobile infrastructure provided by RBS and financial services institutions, and there are those customers who prefer to visit a branch.

Some banks are adopting innovative approaches to branch closures. For popular physical services, where branches are closing, Lloyds Bank has an arrangement with the Post Office as an alternative. While this provides an option to customers who favour the in-branch experience over emerging online channels, it doesn't necessarily address the fear around not having a physical branch in their neighbourhood.

No doubt, branch closures should be expected right now – high street banking is a costly channel, and businesses need to address how they offer services. However, even in the wake of closures, many banks still do not provide fully integrated digital services, with some institutions still requiring a physical visit to complete a transaction.

In fact, how many financial institutions currently offer customers the ability to start an application online and move in-branch?

I know, the difficulty associated with delivering a seamless service typically comes down to legacy banking systems. Getting everything working together necessitates costly, often complex integration projects. Projects requiring board approval, where boards are looking to cut costs, not introduce new expensive programs of work.

However, the message from customers is clear: they expect personalised service delivered in a way they trust – they do not want to be dictated to by a prehistoric process with lots of steps and data entry. Therefore, creating a customer-centric strategy is critical, regardless of the high street conundrum.

If closing down branches is essential, then you need to create reliable, integrated alternatives. Give your customer all of the services they consume, and more, improve them by:

  • Creating a true omnichannel experience, making moving between channels seamless
  • Channel consistency – offer the same excellent service across all channels
  • Leverage solutions that can pull your systems together that can cope with future channels that don’t exist yet
  • Make sure you can adapt the customer experience to adopt changing conditions
  • Regularly review your data, as a whole – business intelligence is key
  • Make sure your platform can win the public over, even when you are closing branches.

If your top issue is legacy solutions and integration, then a single view of the customer is the ideal platform to hide your complex processes – and create a flexible platform that will not only focus on your customers’ demands but also on the tricky subject of branch closures.