Members Want It All

Ron Shevlin, research director of Cornerstone Advisors, noted in the report that executives are asking the wrong question in regard to whether the great digital transition is making the branch obsolete.

Instead, the key question for executives to ask and answer should be, “What does it mean for consumers’ wants and needs for human interaction?” Shevlin wrote in the study titled, “The ­Human + Digital Challenge in Banking: Consumers Want Both.”

Digital banking has delivered many benefits for members, and as technology improves it will continue to provide even more advantages. Ironically enough, however, digital banking has essentially bolstered the importance of branches in serving members, including millennials and Gen Zers.

A key finding of the Backbase report was that the pandemic actually changed consumers’ channel behaviors.

The research found three in 10 consumers interact more frequently with their primary checking or spending account because of the pandemic, while less than two in 10 consumers interact with it less frequently. For consumers who interacted less frequently, most of them reduced their number of branch visits. But among millennials who said they interact more frequently with their primary checking or spending account, 42% increased their use of the branch or the phone.

The reason: Of the consumers who opened a new account between 2018 and 2021, 37% of all consumers, 37% of millennials and 38% of Gen Zers said they contacted a credit union/bank employee because they thought it would be faster and easier to get an answer to their questions. What’s more, 36% of all consumers, and 40% of millennials and Gen Zers, said they couldn’t find the information online or on a mobile app, and 23% of all consumers surveyed, including 33% of millennials and 24% of Gen Zers, said they tried to get the information but the financial institution did not support what they asked or needed to do.

A recent report from Engageware, a software provider in Tewksbury, Mass., cited research that found 35% of banking customers say it is not easy to find even simple answers on their ­financial institution’s website or mobile app.

“In the aggregate, customers may have higher standards for a seamless digital experience, but it’s important to remember that customers will need a level of support to successfully adopt said technologies in addition to also having unique needs and desired levels of online, phone, or, face-to-face engagement,” the report noted.

Engageware CEO Bill Clark said individual positive member transactional experiences are important, but the sum of those transactions conducted through the credit union’s website, app, ATM, contact center and branch is what builds a total positive engagement with members – and leads to long-term relationships and a competitive advantage in the marketplace. Engageware’s survey of financial professionals showed that while 49% of banking professionals indicated that digital is the top priority channel for customer engagement in 2022, nearly 40% say serving all channels of interaction (digital, the branch and the contact center) are equally important.

In addition to making digital technology improvements, Clark recommended financial institutions invest in employee training and resources, such as a centralized and customized knowledge base that can help staff quickly deliver accurate information to members.

Credit unions such as the $2.5 billion Chartway Federal Credit Union in Virginia Beach, Va., and the $6.7 billion Michigan State University Federal Credit Union in East Lansing have been upgrading their digital platforms to continuously improve member experience and engagement. But they also know that no matter how good digital banking becomes, branches will always play an important strategic role, particularly in serving members who need personal guidance or advice to resolve complex financial challenges or achieve financial goals.

“We’re looking to redesign our branches to make them more friendly to our members, and a big piece of that is absolutely going to be digital and how we can have more conversations with members as opposed to lining everybody up in a cue,” Rob Keatts, Chartway’s chief strategy and information officer, said. “When members interact with us, they can start something online, transition to video banking, and if they have to come into a branch, we are going to know why. That’s where we are going, by allowing our members to interact with us whenever and wherever they want and providing a consistent experience.”

Ben Maxim, vice president of strategy and innovations at MSUFCU, said the branches are important because they build member trust and loyalty. During the pandemic, the credit union opened two new branches with smaller footprints in Traverse City, Mich., and they continue to perform well. The credit union operates 24 branches.

“[Members] figured out how digital fit into their lives, and what they could do on digital and what they then would still do in the branches,” Maxim said. “And that really kind of opened the door for more digital consumption for our members and really for us to continue and further improve the experience across the board as [members] move from starting something on a digital channel and completing it with the call center, live chat or in person in the branch.”

Chartway EVP and COO Kim Little noted that digital banking tools are great if members know how to use them. But if members are on a self-learning curve, they may get frustrated and decide video banking, for example, may not be for them.

When the credit union rolled out its branch ITMs, Little said it took some “concierage-ing,” with employees standing outside branches to incentivize members to try ITMs.

“We had a nice adoption of that, and the same with video banking,” she said. “We’ve had video banking in market for two years and have some really loyal users and great net promoter scores coming back from that solution. Again, it’s [developing] that digital confidence [among members]. Once you show someone how to do it, they never go back. So we are developing ways to show people how to use the digital technology, particularly through our branches and contact centers.”

Chartway also is upgrading its search functions and options on its digital platforms to make it easier for members to find the information they need.

“As we roll out our new website, we are also looking at deploying more technology, so if someone can’t find what they’re looking for, they can instantly have a conversation with a live person,” he said. “We’re looking at integrating that so that chat can turn into a phone call or a video session if necessary.”

Later this year, Chartway will be taking the conversational artificial intelligence bot that it uses for telephone banking and applying it to the website. The natural language bot is expected to improve the site’s search capabilities.

“So if you search for a home loan or want to buy a house, the AI bot is going to understand that you are searching for a mortgage,” he said. “And instead of showing search results of 20 articles and figuring out which one has the information you are looking for, the bot will show you only two articles, and hopefully one of them will answer your questions. We know we’ve got to get better at getting the right answers to [members].”

MSUFCU started working on a digital overhaul project last year, and began executing it this year to develop self-serving digital channels to make it easier for members to find information.

“One of the main drivers of that is our [AI] chatbox [Fran] that we added,” Maxim said. “Just like we navigate the internet by going to Google … we want our chatbox Fran to be where you come and ask Fran whatever you are looking for and Fran will help you either do the action or find where you can do the action on digital, so you have one place to go versus trying to figure it out yourself.”

Chatbox Fran has a 99% accuracy rate in answering members’ questions or finding the information they want. But to achieve that high accuracy rate, Maxim said the credit union made one employee a full-time AI content manager to review member conversations to ensure they are getting accurate answers.