Mercator Blog

Rewards and Better Interest Rates Are U.S. Consumers' Top Reasons for Switching Banks
Date: February 1, 2017
Karen Augustine
Manager, Primary Data Services
Consumers use an ever-growing array of banking touchpoints to transact and communicate with their financial institutions, although most still rely on face-to-face contact with branch personnel. For banks and credit unions, the branch remains the hub for strengthening the customer relationship beyond transactions. Customers increasingly expect their financial institution (FI) to offer them more than payments services. They expect better and faster communication using a variety of channels at their convenience for seamless delivery of financial products, services, and advice focused on their needs. Meeting those expectations requires FIs to be omnichannel retail banking institutions with a personalized approach to customer interaction. Not only do consumers want their financial institutions to know them better, but they seek help to improve their financial situation and they expect to be rewarded for their loyalty.

Even as they close some branches to reduce costs, FIs must reshape their remaining local branches to support more personalized financial services and advice, enabling customers to communicate through multiple channels without restating or reentering information. The branch is key to drawing in new customers, communicating with existing customers, and cross-selling products and services. As customers increasingly find it more convenient to conduct transactions digitally than face to face, the branch is becoming more important as a center for financial advice, problem solving, and supporting customer goals. Consumers expect digital features to be incorporated into the branches, which will change the nature and the feel of branches in the future. Despite increased use of self-service channels, however, branches remain the center of most retail customers’ banking world, where they can interact with knowledgeable personnel on important issues that cannot be resolved as easily through self-service methods. Many FIs still require consumers to visit a branch to complete account-opening paperwork or speak with subject matter experts.

Today’s customers demand an integrated channel experience with a variety of banking options, including the branch. The branch will remain essential because consumers prefer personal interaction at the branch and visit their branch for advice, customer service, and to obtain a wide range of financial services including investments, private banking, and wealth management.

The report, Omnichannel and Branch Banking: Remember and Reward Your Customers, focuses on the importance of branch banking compared to other channels, frustrations with the cross-platform issues, delays or improper targeting, interest in greater personalization, the range of financial services used by customers, the breadth of relationship with their primary financial institution, criteria used to select primary FIs and reasons for switching, their account opening experiences, as well as their interest in more personalized service upon entering a branch. The survey data analysis highlights ways that financial institutions can modernize the branch experience and provide the advice and support that customers demand.