On the heels of a tumultuous spring that saw three of the four largest bank failures in U.S. history — Silicon Valley Bank and Signature Bank went under in March, followed by First Republic in May — many customers of smaller institutions quickly moved their deposits to “too big to fail” banks — and those financial institutions grew by acquisition, too.
As the banking crisis drags on, pressure is building on financial institutions to find new ways to compete for deposits in the changing market — and customer loyalty is more important than ever.
Despite the rise of digital banking, the brick-and-mortar branch is still a critical component in building customer loyalty. In fact, many conventional banks are putting increased emphasis on their physical branches as the prime differentiator for their services. A survey by Blend found that the vast majority of respondents are multi-channel customers, and the top reason surveyed customers gave for switching banks was actually the inconvenient location of their local branch.
Blurring the digital/physical line
However, the nature of these physical branches is changing. With digital transactions continuing to rise, customers have less of an everyday need to visit their bank and typically only do so to engage in more complex activities like taking out a loan or receiving financial consultations. These interactions are key; the banks that are poised for the greatest success in the coming years will be those that can provide a personalized service that blurs the line between the digital and physical.
Retail banking customer service has the difficult task of serving customers across the gamut of banking needs and across multiple channels. Banks typically employ different software tools for managing accounts, handling loan applications and getting insights into customer income, debt and credit. Furthermore, the platforms used for online services are often different from the ones used by in-branch staff.
When customers are multi-channeled but systems are siloed, service delivery is inevitably hindered. Not only does it take more time and effort to provide offers and recommendations to customers, but it also takes longer for employees to gain proficiency across the platforms. This can translate to less timely and personalized results for customers.
The omnichannel platform
By combining these discrete internal software tools into a unified, omnichannel platform, banks stand to gain a leg up on competitors through increased customer engagement. Removing complexity from the origination process helps focus bankers on the customer’s goals, rather than on navigating the system and data input. Automated workflows and verification services reduce the time to complete rigorous tasks including credit card applications and approving personal loans, and allow for more timely service and advice to be offered in person at branches.
As a bonus, streamlining with a single, intuitive software tool that can administer tasks typically siloed across multiple programs can also help soften the learning curve for onboarding new employees.
Ultimately, in this competitive era, institutions that master the art of seamless, intuitive and personalized banking experiences will be the ones to thrive through the downturn and beyond.
Nima Ghamsari is co-founder and chief executive of Blend, and chair of its board of directors. He leads the company’s corporate and product strategy, and in 2020 was included in Fortune’s 40 Under 40 list.
