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Perhaps ironically, the need for banks and financial services to move with the times and catch up with other sectors in terms of digitisation features equally prominently in the news. So with such conflicting needs from their consumers, where should the banks’ focus be – online or on the High Street?

Digital banking

There seems little doubt that millenials are more likely to use online banking, with 75% of 25-34 year olds preferring to use a mobile app than a branch. Many of the high street banks have reflected this shift in the customer journey with the development of their digital offering; Barclays’ ‘Digital Eagles’ scheme, the introduction of voice recognition as a security measure and the increase in the number of mobile-only banks such as Atom and First Direct, are all the result of a movement towards a more digital user experience. But what about the 18% of customers in this age range that prefer to visit a branch, or the 36% of those aged over 55?

What’s keeping people in branch?

The UK’s first full-service internet bank, Smile, launched almost 20 years ago, yet it seems that a complete dissolution of the high-street branch is still a long way off. And, what’s more, there are many consumers that don’t want to see the back of their local branch. Research from the Social Market Foundation identified that when customers are making more significant and long-term financial decisions, such as taking out a mortgage, 50% of people visit a branch. In addition, only a third of UK consumers would consider using a bank which had no branches as their main financial services provider and a staggering 60% of traditional banking products are still being sold in branch.

Marketing’s role in fintech acceptance

If consumers aren’t yet entirely comfortable with the idea of making important purchases through a faceless digital platform, it’s up to marketing to play a key role. The transition to a fully digital banking landscape must consider the importance of customer service – and while most consumers are happy to complete day-to-day tasks such as checking balances through an online portal or app, there are many that are unwilling to take big financial decisions without the face-to-face contact offered by a visit to their local branch. For a bank to successfully operate solely online, it needs to be able to offer an online interface and interaction that can replicate and potentially even enhance face-to-face conversation.

It could be argued that it’s the role of marketing to educate consumers in the benefits and security associated with banking online. And while many banks already adopt certain promotional tactics, such as offering superior interest rates for online saving accounts and special deals for online access accounts, to encourage the uptake of their digital services, the statistics tell their own story. Customers aren’t yet ready to take the step into a fully digital banking experience. To change this behaviour, consumers need to know that the service they will get from an online bank will be equal to, or even better than, their in-branch experience.

Ironically, while banks are closing their branches by the dozen and decreasing their presence on the High Street, the biggest online retailer in the world, Amazon, is looking to do the opposite with the opening of six bookstores by the end of 2017 and the trialling of their first Amazon Go grocery store.  The question that immediately springs to mind is why? According to Antony Ritch at WIRED Retail 2016, the reason is simple. It’s because it’s what the customer wants.

So, what does this all mean for the banks? Personally, I think it will be a long time before we see a high street with no banks. Instead, they’ll need to embrace an integrated approach to communicating with customers. There is no ‘one size fits all’ approach in any marketing campaign, and the banking sector is no different. At JJ, our experience working with a number of large financial services clients tells us that banks need to focus on delivering the best possible customer service – both digitally and in branch. Successful consumer communications are all about delivering the relevant message at the right time through the right medium, whether that be through in branch collateral, email, online or even customer events.

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