With in-branch banking on a decline, many financial institutions are focusing on their mobile and self-service strategies. But neglecting face-to-face banking reduces these companies' chances of building meaningful relationships with customers, according to ANZ CTO, Patrick Maes.
In the US, banks have been on a drive to cut down the number of retail branches as a way to cut costs and respond to the growing mobile banking trend. Australian banks have also been on the same path in recent years, albeit at a slower pace.
Real estate and wages are not cheap in Australia and some banks, like the NAB, have chosen to downsize some of its branches and introduce more self-service capabilities for customers. ME Bank, for example, is trialling a number of self-service video conferencing kiosks.
But while Maes recognises that there is an "obsession in the market" with mobile and do-it-yourself banking, he warned that pushing customers out of branches can be a dangerous move.
"I hear a lot about banks wanting to push clients out of branches and onto self-service platforms," he said at the CeBit Australia 2013 Financial Tech conference in Sydney. "But you know what? From a cost perspective, it may be good, but not from an intimacy perspective.
"If you push clients away to self-service, intimacy will drop."
Self-service is great for transactional banking such as fund transfers, as well as preliminary product research, but customers will still crave expert advice face-to-face at a certain point.
"Once you get to a point when you really want to discuss a product or service, you need expert advice, and having that contact is very important," Maes said.
Westpac is another bank that recognises this point as well. Despite processing three times more transactions made online compared to ones made in person, Westpac thinks branch banking is still relevant and has continued to upgrade 1,300 retail outlets nationwide.
Self-service and in-branch banking complement each other, according to Maes. In fact, Maes believes self-service can actually facilitate customers taking up more products when they eventually head down to a retail branch since they would have already researched the products ahead of time.
"You can have a much richer conversation with your clients because they're already prepared for the discussion," Maes said.
In regard to mobile banking, he was cynical about financial institutions fixated on the creation of mobile apps.
"I'm not saying mobility isn't important, but it's much deeper than building mobile apps," Maes said. "Mobility is about providing your customer touch points which are completely interlinked."
This means keeping track of all customer transactions, be it through mobile phones or in-branch, so banks can understand and aggregate the context of each transaction.
"No single bank has accomplished this yet, but they are working on it," Maes said. "That's what we think multichannel mobility is about — giving context and having no differentiation on where the transaction is made."