Community Banks Must Balance High Touch with Self-Service Banking Technology

by | Apr 19, 2021

Community Banks: High Touch Branch Interactions Or Self-service Banking Technology?

Community banks have built businesses around a strong physical presence in the communities they serve. This model relies heavily on in-branch services, personal relationships between bank managers and customers, and broader involvement in the community based on sponsorships and support for local initiatives.

Two forces are threatening the viability of this ‘high-touch branch interaction’ model and thus driving the need for self-service banking technology.

1. The acceleration of digital transformation in financial services and adoption of digital banking, has brought an array of financial services options to customers, no matter where their location.

What was once a geographically narrow competitive environment based on location, is now an open playing field.

2. This business model may satisfy the more mature customers, but it is less suited to the younger generation, who want the convenience of anywhere, anytime, self-service banking.

And it is the younger people that financial institutions need to attract to secure future viability.

Competition for share of wallet is fierce in the financial sector

Community banks face competition from many fronts. While big banks such as Wells Fargo and Bank of America may not have brick-and-mortar branches in smaller towns and local communities, the reach of their digital banking products negates the physical distance – making a lack of in-branch services less of a factor when choosing where to bank.

This is especially true for younger customers.

In fact, as cited in Forbes.com, now that big banks are digitally accessible, as much as 44% of millennials consider Bank of America, JPMorgan Chase, or Wells Fargo to be their primary bank.  

Then there are the major digital technology brands – Apple, Amazon, Google – who make considerable investments into launching new digital products and expanding their market share. They already have millions of users and are well-positioned to extend existing services to offer banking and payment products to their base.

Let’s not forget about the digital-only banks like Moven Bank and Bank Mobile, which have taken full advantage of the digital technology wave and built strong businesses without any brick-and-mortar locations. These banks are snapping up younger customers who have no need for physical interactions with their financial services providers.

With this level of competition, the one thing community banks cannot do – is nothing.  

Bank branches still have a vital role to play

It would be remiss to suggest that community banks should plan to go fully digital. There is a key role for in-branch services to play, and brick-and-mortar will continue to be a vital part of the customer service strategy.

The most important goal to keep in mind is to offer a range of engagement options and allow customers to select the channels that most suit their preferences. It is true that younger generations tend to be more digitally minded, however, research has shown people of all ages are now more willing, especially post-COVID, to adopt digital channels so they can do their shopping, banking, and bill payments online.

Providing a selection of engagement options is a necessity, and it is important to understand that customers may prefer digital channels to manage their transactional banking requirements. However, when in need of financial advice, they prefer a face-to-face conversation with a trusted advisor.

It is also important to understand that customer channel preferences are evolving.

research report from Keypoint Intelligence says nearly three-quarters of respondents wanted to decide which channels their providers should use to communicate with them.  

Find the balance between high touch branch interaction and self-service banking technology

To compete in the future, community banks must retain their local advantage, while still evolving alongside the digital requirements of their customers. This requires a balance between high-touch services and digital technology that enables customers to self-serve.

When developing a strategy for digital transformation, organizations must keep the customer at the center of all design decisions across product and processes, and of course, communication.

Having an omnichannel communication strategy that enables customers to choose how they want to engage, is vital for community banks. Fortunately, there are platforms that are built around this customer-centric approach and can support a modern, omnichannel communication strategy.

Investing in a platform for omnichannel communications does not require a large capital outlay, expensive consulting fees or extended projects. To compete with large banks and big tech, community banks need to build their digital capabilities but also have a strategy to market these services to customers and prospects.

A customer communications management (CCM) platform is an essential part of providing the kind of omnichannel experience that customers now expect.

It makes sense to partner with a technology company that understands the unique challenges of community banks and can provide a customer communication management solution that supports the requirements specific to this type of financial services provider.

Doxim’s CCM platform for financial services enables banks to deliver omnichannel communications that engage customers throughout the entire lifecycle.

Looking to enhance your bank’s digital experience with self-service banking technology? TALK TO A CCM EXPERT TODAY

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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