Branches play key role as digital banking rise equates to higher customer dissatisfaction

Here’s another installment in our periodic Q&A series highlighting women founders and leaders in the fintech space. These interviews share valuable viewpoints on what it takes to bring a range of talent and skills to this fast-changing industry. And they explore business opportunities on the horizon for financial services providers and their technology partners.

Kimberly Clay is co-founder and director of marketing research at Bancography, a Birmingham, Ala.- based financial services consulting firm that delivers insight, software tools and marketing research to U.S. banks and credit unions to support their branch, product and brand positioning strategies.

Clay recently issued a new white paper “The Brand Truth” that provides methods, best practices and case studies to help financial institutions evaluate and strengthen their brands. Download for free at https://bancography.com/the-brand-truth/

Prior to launching Bancography, Clay managed the banking division for a top 50 global marketing research firm and led the marketing research department for AmSouth Bank, a $43 billion institution, now Regions Financial Corp.

We know the branch is not “dead” even in a digital world, but certainly branches have evolved. How do today’s best-in-class branches function? Or is it short-sighted to think that is summed up in a single answer, and instead is regional and purpose dependent?

The role of the branch is changing as in-branch transaction volume lessens. Even as routine transaction demand migrates to the digital channels, the physical branch remains the primary channel for the account opening event, especially for the more profitable small business segment and for the more sophisticated consumer products.

The fall in volume of the routine in-branch transaction has merely shifted to the multitude of unstaffed channels such as the ATMs, online and mobile. The popularity and dependence of the digital channels is growing significantly annually, which has increased and expanded the overall banking experience. Consumers have embraced digital and electronic channels as another mode for transacting, like the adoption of the ATM in the 1980s.

These touchpoints are vital in the customer experience; yet their technological evolution seems to have outpaced their primary support channel which is the call center. When the consumer or business has trouble with one of the digital channels, they immediately contact the call center. More than one-quarter of inbound calls are from customers seeking digital help. The agents have morphed from remote tellers to universal bankers that must be technologically savvy.

With the growth of digital reliance, customer dissatisfaction is on the rise. It is crucial in the new account opening process for the customer to understand how to set up and navigate online and mobile banking. Too often this is not the case, and the customer blames the banker and institution for a poor system or inadequate employee training.

Just in the last few years, digital channel problems or issues have begun to affect loyalty which will eventually fuel attrition. A dysfunctional ATM is not correlated to disloyalty, but perceived issues with digital will. Some institutions have poor platforms as they merely wanted to check a box in that they have these offerings. However, this does not work well.

Consumers grow technologically savvier by the day; thus, expect ease of use and speed. Marketers are very excited about opportunities with the younger demographics (Generation Z and Millennials). They must make sure that their current platforms will meet their demands. The younger demographic defines convenience in the number of clicks to conduct a transaction.  This begins with designing a quality user experience. They want financial products and services that are more streamlined and intuitive. Designing mobile banking applications isn’t as simple as providing users with a way to check account balances.

Is there a 2025 data-driven marketing trend that is top of mind?

One significant data-driven marketing trend anticipated for 2025 is the increased use of artificial intelligence (AI) and machine learning (ML). It is dominating every conference agenda currently.  Financial institutions are looking to leverage advanced analytics to gain deeper insights into customer preferences. This is what CRM systems were built to do years ago with next-most-likely product modeling and other predictive analytic tools. Marketing has successfully used these tools in the past, so this is just another evolution in data interpretation. We must remember that unlike other industries, purchase propensity in banking by demographic or life stage has not and will not change.

Marketers also hope that AI and ML will help personalize the customer experience for daily transactions and routine banking, which it will. But consumers desire an in-person dialogue with a banker when purchasing the more profitable and sophisticated products.

With your marketing background inside the bank and now consulting, can you share perspective on the maturation of DEI strategies. Just as these policies got traction, new risks emerged with “woke/anti-woke” tension that can have ramifications for shareholders, hiring, younger customers, older customers. What is sound policy to make sure that customers and employees feel represented? 

A successful branch will have loyal customers who trust the staff.  A branch connecting with its customers and community will reap the benefits of cross-sell and referrals.  This is best achieved with some of the staff demographically resembling the market they serve. This does not necessarily mean they should reside in the area, rather, a respectable proportion should look like their clients. For example, a branch serving a mature market might lose respect or trust if too many are the age of the customers’ great grandchildren. A 60-year-old probably is not going to be too receptive to financial advice from a recent college graduate. A branch in a Hispanic neighborhood needs more than bi-lingual employees, some should be of Hispanic heritage. Representation extends to LGBTQ+ markets also. Customers and the employees should feel comfortable. Both groups want to be seen, respected and understood.

Some of our more successful clients have a point person in marketing working with human resources when staffing the branches. Marketing provides HR with the demographic profiles of a branch’s drawing radius or market. The cohesiveness between departments also helps sales strategies and marketing.

Kimberly Clay is Co-Founder and Director of Marketing Research at Bancography.

Check out these additional BAI Banking Strategies Q&As with women fintech leaders.

Kim Snyder of KlariVis: “Data-first strategies strengthen relationship banking and help smaller banks compete”

Lee Farabough of Core10’s Monarch: “Why creativity is a banking-talent attribute”

Shelby Austin of Arteria AI: “AI’s key role in uncovering hidden value in document and data automation”