By Karen Wheeler, Vice President and Country Manager UK, Affinion
It was revealed last month that Hull will lose its the last remaining Co-op bank, with the branch scheduled to close in May. But Hull is no anomaly; the plans follow the closure of a record 800 UK bank branches in 2017, and at least 300 more are planned for this year.
Closures are part of a widespread trend that’s sweeping the nation. Research in January found that online banking is now the primary method of banking for UK consumers, overtaking in-branch visits for the first time. Therefore, it’s no surprise that as consumers increasingly choose to bank online and via their smartphones, Britain’s banks are having to adapt or close their branches at a rapid rate.
With a host of research available to back up the decline of in-branch visits and increasing competition from fintechs and low interest impacting providers’ profits, closures are only a natural reaction. So then, what can traditional banks do to increase customer engagement, and consequently loyalty, in this changing landscape?
It’s time to nail personalisation
For banks, every moment of interaction is a chance to impress customers and make them aware of other areas in which they can add value, which can ultimately drive long-lasting engagement. Just because they have less face-time doesn’t mean there should be no personal touch. A recent report found that a number of banks are missing out due to a lack of personalisation. It found that67% of consumers would be more likely to take out a loan or credit card with their current bank if they received personalised advice, with 68% saying that their relationship is purely a ‘transactional’ one.
Clearly then, personalisation presents an opportunity for banks to increase customer engagement and improve the customer experience in a world with fewer physical branches. Challengers like Monzo are already doing this well – the mobile-only bank uses data on its customers’ spending habits to offer them financial advice, ultimately helping them to save money, budget responsibly and find better deals. For example, in the past, its data showed nearly 30,000 of its customers used their cards for transport in London – so Monzo advised them they could save money if they invested in a year-long travel card.
Digital bank Atom is also leading the charge. In a clear sign that it wants to offer customers something different, it acquired software company Grasp, which specialises in games and virtual reality development, to improve its digital platforms. Atom’s app lets customers personalise the app experience by choosing a logo, name and colours. By allowing them to adapt the interface to suit their personal preferences, the banking experience becomes truly unique and improves customer engagement and experience.
At the heart of modern customer engagement lies data driven marketing and personalisation, and banks should learn from its challengers. No longer is it enough to just know your customer’s birthday. The next stage for customer engagement is to know the ages of their children, their favourite sports teams, where they like to go on holiday, how active they are on social media. Only then can banks offer rewards and experiences that are truly built for them.
Providing a seamless experience across multiple channels should be at the core of all banks’ customer engagement strategies. A customer needs to feel confident that their needs will be met by their chosen provider, whether it’s through interacting with a person or reaching out online.
While the role of face-to-face in the customer engagement journey is dwindling thanks to bank closures, it should by no means be non-existent. A personal touch is hugely important, and the option should be there for those customers that desire or need it.
In rural communities like Hornsea, where the nearest branch could be over 12 miles away come June, banks are experimenting with face-to-face alternatives to offer the desired customer experience. A popular alternative that a number of providers have invested in are mobile bank vans. The NatWest Mobile Branch Banking service currently operates 5 days a week and publishes a weekly timetable, with its vans visiting a number of different townsto engage with customers.
The vans can accept deposits, cash withdrawals and bill payments, while all vehicles have on-board customer phone facilities. RBS has also started employing “community bankers”, with an estimated 55 now existing across the UK. With closures imminent we can expect methods like these to ramp up, with banks investing in an appropriate mix offace-to-face alternatives to sit alongside online banking in those areas that need it.
Ultimately, banks need to make sure they’re interacting with their customers at relevant, opportune moments and in the correct ways to drive engagement. While face-to-face interaction should always remain an option, it is vital that providers begin to explore other methods of customer engagement. Personalisation is key for success and by building and offering experiences that are both personal and outside their normal remit, banks can demonstrate their importance in new ways and add real value beyond what their customers typically expect.