Will More Digital Make Banking Better and Make the Personal Banker Obsolete?

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Phoenix Marketing International releases the Banking Channel Optimization Report revealing stronger digital penetration in banking, but continued reliance on one-to-one service.

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Sales and relationship management carry unique complex nuances that can’t be automated – three out of four accounts are opened at the branch and nine out of 10 customer issues are solved at the branch or via a phone discussion

Digital banking seems to be poised for unparalleled growth. Chase recently announced that it will reduce 5% of its branches but will invest further in digital channels. Both USAA and Capital One recently re-affirmed their commitment to digital channels, with USAA just announcing it has added facial and voice recognition to its mobile banking offering, and Capital One touting how mobile, with its portability, real-time and integration qualities, will further displace traditional banking.

Phoenix Marketing International, a leading market research firm, recently released its Banking Channel Optimization Report that revealed strong digital channel penetration in the marketplace. Of 107 million households, nine out of ten now use online banking and four out of ten use mobile banking. In addition, six out of ten banking transactions are now conducted through digital channels up 15% in less than 5 years. For more information on the Banking Channel Optimization Report please click here.

Everyone is now asking, “Will digital take over traditional banking?”

“Not so,” says Augusto Medelius, VP Global Channels at Phoenix. “Sound banking is about efficiency, sales and growing profitable customer relationships. Digital channels do well in those basic, automatable transactions such as checking your account balance or paying that monthly utility bill – that’s the efficiency part. Sales and relationship management carry unique complex nuances that can’t be automated – three out of four accounts are opened at the branch and nine out of 10 customer issues are solved at the branch or via a phone discussion.”

Moreover “engaging and building relationships and driving top consideration for new products and services is essential,” Medelius asserts. “Being the primary household financial institution matters versus the non-primary institution. The primary one is eight times more likely to house the main checking account, and is two times more likely to have branches nearby, be used for everyday activities, considered for simple and complex needs, and used for personal and business banking.”

How digital banking fares vs. traditional channels

The Phoenix research shows that 50% of major national and super-regional bank customers consider those institutions as primary. Medelius adds, “At specialty FIs, which emphasize digital, only 25% or less of customers consider those institutions as primary. This reveals that, at this moment, being too focused on digital can put you at a disadvantage."

There are a number of considerations that go into choosing a bank or keeping it as primary including fees, ATMs, branches, digital options, etc. But what is most valued is personnel competence that helps to conclusively address needs, and drive thriving, lasting relationships with consumers (including small business owners). The research reveals that too much automation hinders this, placing unwanted barriers between bankers and customers. Banks must stage automation and human roles in smart ways to respond to the various happenings, both mundane and complex that customers undergo throughout their financial lifecycles.

Phoenix Marketing International’s Banking Channel Optimization Monitor was designed to help financial institutions gain critical perspective to confront today’s challenges and deepen customer relationships. The report is a major market research effort that studies the banking consumer, builds key segment profiles, defines the customer experience financial institutions must enable, the roles delivery channels must fulfill, what to leverage and how to optimize banking performance. The scope of this effort (4,200 consumer interviews, complemented by 900 financial institution interviews) was designed to deliver essential, actionable insights to advance financial institution performance. For more information on Phoenix Marketing International and the company’s expertise in the financial services marketplace please click here.

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Kristin Johnson
Phoenix Marketing International
+1 845-876-8228 Ext: 308
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