Mercator Blog

Get Ready for an Exciting Year in Banking
Date: January 6, 2015
Ed O'Brien
Director, Banking Channels Advisory Service
Banks, credit unions, and other financial institutions (FIs) are gearing up for continued changes in the way they interact and engage with banking customers in 2015. Banking is at an inflection point where full service, self-service, and assisted service are all used to meet—and hopefully exceed—customer expectations.

This inflection point offers opportunities for FIs to differentiate themselves with extraordinary customer service by leveraging technology without increasing their sales and operational costs.
Not only are bank customers’ and credit union members’ expectations for service heightened by their experiences in retailing – particularly omnichannel retailing with such firms as Apple and Nordstrom—but their increased use of mobile devices ups the ante tremendously for customer service.

While they continue to alter the number and configurations of their branches, many FIs are progressing from multichannel to omnichannel banking. This evolution involves reconfiguring branches with mini-branch, traditional, and flagship branch designs and channels systems that include a real-time, 360-degree view of customer transactions and behaviors.

For 2015, we at Mercator Advisory Group anticipate further strides toward an omnichannel banking environment. The evolution toward omnichannel banking is a logical extension of omnichannel retailing, where customers can experience a synchronized and coordinated experience no matter whether they are in a branch, store, or shopping online or with a smartphone.

We see FIs continuing to evaluate the number and type of branches needed in various markets, as well as the number and capabilities of tellers and branch personnel, reassess the fundamental role of these associates. As they reclassify these roles, a mix of sales and service training will be key to promoting cross- and up-sell opportunities and moving the needle on overall customer satisfaction, even while the volume of branch-based transactions continues to decline.

We also anticipate further expansion of self-service banking to better serve customers and members by deploying more kiosks and tablets along with “intelligent deposit” ATMs and digital banking as desirable options for customers and members. We expect increasing convergence of ATMs and mobile banking with production versions of ATM “prestaging” of transactions (also known as cardless cash withdrawal or mobile cash access) and increased use of ATMs and mobile banking for P2P (person-to-person or peer-to-peer) funds transfers and other capabilities.

EMV ATM compliance will be top-of-mind for most FIs in 2015 as they wrestle with understanding various networks’ the timetables and technical requirements for compliance and try to understand the ramifications of their actions (or inactions). FIs must determine their course of action regarding the liability shifts being created by the networks and decide when and how they will incorporate solutions for deadlines pending for American Express, Discover, MasterCard, and Visa.

In many ways, we see 2015 as being the year of the customer. Some projects that were important but were unfunded or underfunded over the past few years are now moving forward, largely because of increased funding for critical, customer-centric projects. Many FIs are increasing spending for such initiatives because of the compelling business cases being made to woo new banking customers as part of a core strategy to deepen relationships and offer a truly outstanding customer experience.