SAN JOSE, Calif.-A new study from Cisco offers some new insights into consumer-and credit union member-thinking on service delivery.
One of the study's authors also believes credit unions are making a mistake with at least one service delivery strategy.
The study, "Winning Strategies for Omnichannel Banking" was released by Cisco's Internet Business Solutions Group, and suggests that whereas the current multichannel approach "encourage(s) customers to use the least expensive channel ... omnichannel banking provides a consistent experience across channels to provide customers with seamless access to financial products and services."
The authors of the study surveyed more than 5,000 consumers across the globe, including bank customers and CU members in both developed and developing countries.
The authors say the four pillars of omnichannel banking are branch, mobile, social and video. The study found that while consumers have demonstrated interest in more high-tech channels, 37% of CU members who are digital channel users are still frequent branch visitors (two or more visits per month). Yet the study also found that 31% of CU members would move their business if their credit union went entirely virtual. When including bank customers, 29% of U.S. respondents said they would switch FIs in that situation.
Not Abandoning The Branch
"Even those who are really interested in virtual banking models are not necessarily abandoning the branch," said Philip Farah, director of financial services practice at Cisco and a co-author of the study. "The respondents who were the most tech-savvy and adopters of technology and virtual channels were also, on average, the highest users of the branch."
While the report found that credit union members are more satisfied with their banking relationships than bank customers, it also revealed that CU members are slightly less interested in new ways of interacting with their FI. The technologies credit union members indicated the greatest level of interest include "specialty branches" and virtual banking.
The study also found that only 1% of CU members are currently ready to combine social media and banking, primarily due to concerns over privacy and lack of control. While credit unions often feel pressure to implement social media strategies as an appeal to potential Gen Y members, Cisco found that those consumers are more interested in financial incentives for referring a friend, along with financial games and competitions.
The authors cited video as another area of omnichannel banking with great potential, pointing out that in-branch video conferencing can be used to provide high-quality financial advice to consumers while also reducing staffing costs at individual branches.
The Foreseeable Future
Jorgen Ericsson, a co-author of the study and VP of financial services practice at Cisco, noted that eventually consumers won't need to go to the branch for video conferencing and will be able to do so from their own homes. "But we definitely think that for the foreseeable future, the banch has a role to play in terms of advisory capabilities where you meet up with someone face-to-face or over an HD video solution that you can put up in the branch."
Farah stressed that omnichannel isn't about one channel versus another, but rather about integrating multiple channels to allow consumers ease of use and the ability to choose which channel best suits their needs on an individual basis.
He added that while the levels of dissatisfaction varied, the study found that consumers in developing and developed countries were dissatisfied with their banking options. "Where many (financial institutions) are making, in my mind, the wrong decision of going to fully automated, almost airport kiosk-style branch, and ignoring the thirst of the consumer for more personalized service."