One of the most significant paradigm shifts happening right now in the financial industry is the rapid growth of self-service channels (ATMs, online, and mobile). According to TowerGroup, a Corporate Executive Board company, the number of branch banking transactions is projected to decrease by almost 1 Billion over the next 2 years. Over that same time span, TowerGroup projects that transactions through self-service channels will increase by almost 14 Billion. This shift is being driven by changing demographic patterns and the adoption of new technologies. Younger consumers (ages 18–34) are more likely than their older cohorts to use online and mobile technologies in their day-to-day lives and are thus much more likely to prefer learning about, purchasing, and managing their financial products through mobile and online channels. As time passes, the percentage of consumers who prefer to interact with banks primarily through self-service channels is only going to increase. This is not to say that branch and phone banking will become extinct, but the volume and type of interactions that take place in these person-to-person channels will evolve as this new self-service paradigm takes hold.
Every financial institution is going to need a strategy for this new reality. How are they going to deal with the evolving customer interactions in their branches and call centers? How are they going to cross-sell products? How are they going to ensure a consistent customer experience across all of their channels?
I attended a session at the CardForum show in April that also discussed the topic of self-service channels. One of the panelists in that session, an executive at a top 5 US financial institution, pointed out a rarely discussed implication of the growth of self-service channels. She explained that the types of customer interactions happening in self-service channels at her institution tended to be relatively simple and straight forward—a consumer researching a credit card on the bank’s website or a current customer checking their account balance on their smartphone. The simplicity of these interactions is a perfect fit with speed and convenience of self-service channels.
The problem, according to this bank executive, is that all of the “easy” customer interactions are being filtered out through self-service channels. This means that the customer service representatives (CSRs) working in the bank’s branches and call centers are now dealing almost exclusively with difficult, complex customer interactions that could not be resolved through self-service channels—the upset customer who is looking to vent their frustrations face-to-face or the potential customer who can’t decide what product they want. These types of interactions tend to be “high stakes” because if they don’t go well, the customer’s negative experience usually translates into a hard dollar loss for the bank. Thus it is essential for “high stakes” scenarios, CSRs be willing and able to engage with the consumer and facilitate a successful interaction. The concern is that most CSRs are not trained to handle such complex interactions and the stress of dealing exclusively with these types of exchanges will lead to burned out CSRs and dissatisfied customers.
So how do financial institutions respond? The percentage of “high stakes” customer interactions happening in branches and call centers is only going to increase as more of the easy customer interactions are siphoned off by the growing utilization of self-service channels. How can banks empower their CSRs to be effective in this new, higher pressure environment? Leave a comment and let me know what you think.