Nobody thinks millennials go to branches, but 51 million times last month somebody came to a teller line and 75 million times last month somebody came to an ATM.
As we’ve tracked the rise of digital disruption in the banking sector, there’s one issue that mirrors the same disruption in the retail sector - how to strike the balance between the offline and the online worlds. In the retail sector, it’s a problem that has seen established brands selling off their real estate. In the banking sector, it’s a challenge that has seen branch closures everywhere.
But the reality is that there is a role for the bank branch, albeit one that needs to be re-evaluated and adjusted. In order to get to that new role though, the first thing that banks need to do is to shake off some of the assumptions about that Holiest of Grails, the Millennial Customer, and how to meet his/her digital-only needs.
That’s why the above quote from Mary Mack, Head of Community Banking at Wells Fargo, comes as such a breath of fresh air. She’s speaking from experience:
I have millennials in my house too. And they seem to only use a phone to do anything. But if you think about the way our customers use branches today, that’s why we’re looking at smaller footprint. There may be engagement opportunities. If you go into a branch, I believe, you’re looking for something of value. You’re looking for somebody to understand something that maybe a little bit more complex. Our customers come into our branch not to get a product, they come in because they want to buy a car or they want to buy their first home, or they want to repair their credit and they need some help doing it.
So the way I think about branches are that [there are] team members who can help customers understand what it is they’re trying to do. They’re not as interested in loans, deposits and mortgages. They are interested in homes, and cars, and rebuilding credit. So that’s where we start and our team members in the branch helps solve those problem. Now, to the extent that we can solve those digitally, we want to do that and we’ll be responsive with the network to what our customers told their name.
But millennials do like branches, she adds:
What’s interesting about it, if you look at things like the experience scores…So we track the experience of customers who’ve been into our branch most recently. We survey 100,000 -125,000 customers a month, about 1.6 million a year. [Customers] return surveys on the experience of the branch and the millennial scores have tracked just slightly higher even than our average score. So [there is a] very positive response and rebound from our millennial customers and the uses of the branch.
That’s important to know as Wells Fargo is all about improving the overall customer experience and it’s clear that the brank network is as important here as a fancy mobile app. Mack says:
Our own data even today tells us, that customers who have a great experience in our branch are most likely to be our most loyal customers. The real difference is [around] likelihood to recommend. There are a couple of different questions that drive the loyalty numbers opposed to satisfaction, but the one that makes a big difference is the likelihood to recommend. And we know that those most loyal customers have higher balance growth, higher -- and ultimately higher revenue growth of our own customers.
All of which leads to a simple conclusion:
Customer experience is giving our customers as they come into our branches, a reason to stay and then ultimately a reason to grow with Wells Fargo.
Digital meets branch
None of this is to say that there shouldn’t be a focus on digital or innovative technology, but the bigger issue is how these integrate with the branches to create a holistic customer experience. Mack points to Wells Fargo’s Payments Virtual Solutions Innovation (PVSI) team which is driving out new digital initiatives built around the customer experience:
[PVSI] is focused on all the ways we interact with our customers. We rolled out a Facebook chat bot and [other] ways to reach our customers where they are. What we want to do is use all the means that we might have to interact with customers to make sure where they are. Convenience sure has been redefined. Convenience used to mean a branch on every corner. We certainly still had a lot of branches. They’re very valuable to us. But [convenience now] means to all of us in every aspect of our lives, it's different, it's really that easy to use and those are the things that we’re investing in.
So PVSI continues to introduce more digital options and these are deployed in branch in response to customer needs and behaviors. Technology is particularly useful in smaller branches, says Mack:
As we think about very small footprints, then how do we use different technologies in branch? Assisted service ATMs in some of our busiest branches will take up to about 25% of the standard teller volume and we can put an assisted service ATM in the branch. It's an ATM that does something a little different from our typical ATMs. It can distribute ones and fives in different denominations, but also has the ability for a team member in our branch to have an iPad and know that you might need help.
If you’re in the middle of a transaction and need help, we can be responsive to that. But it also helps us in terms of taking a standard volume of transactions off of our teller line and reducing costs that way. Paperless in our branches, the only reason we have paper in a branch today is if we have a systems outage and we had to rely on it, but we don’t use [paper].
The other side of all this is of course the Wells Fargo branch staff themselves and their response to adopting and using new technologies. Mack says there’s a millennial angle here as well:
A lot of the team members that we hire into the branches are millennials, so they get it. They understand what digital means to them and what digital means going forward. So what we know is that one of the best ways to bring a new customer and create a primary relationship, a customer who begins to think about and use us as their primary institution is to introduce digital. So one of the things we’re doing is thinking about all of the digital and mobile enhancements that we might create in PVSI and how do we use this in the branch.
A case in point is the introduction of the Snappy App, she says:
[This has] the ability to authenticate via what essentially is a selfie. They’re in pilot now with that. They’re building it so that we’ll be able to do it in the branches. As we roll it out, that’s a great way to introduce our customers immediately to digital opportunities and on-board them so that it can be more convenient to be a customer at Wells Fargo. Our team members are really excited about that.
We will go into pilot in the third quarter with digital advocates in every branch. , Everybody in our branches is already conversing in our digital capabilities. But one person in our branch needs to be on point to be the fast learner, to make sure that the branches keeps up with what’s happening at a pretty rapid pace in our innovations side of things.
At the end of the day, it’s all about the customer and Mack would like to see one idea discarded - the distinction between digital and non-digital customers:
We need to remove any tension in that. Customers think of themselves as customers, not as perhaps as am I digital or am I branc?. It's just that the branches are there for the convenience of a digital customer and vice versa. I believe that our customers don’t think of themselves as a branch customer or a mobile customer or a contractor customer, they’re our customers.
As we bring all of that together, then you can more seamlessly interact the way you would as an individual. Once they come into our branches, I want to introduce them to our mobile opportunities right now because I know that they’re more engaged, they are more likely to become primary because we’ve just made it easier.
A lot of common sense here. Abandoning the fetishistic pursuit of the nebulous theoretical Millennial Customer is a great first step for any organisation looking to build a solid and successful omni-channel strategy.