Do bank branches still matter?

REMEMBER your bank branch? That nice brick building where they're storing your cash and waiting for you to never visit? Here's the paradox of branch banking. On the one hand: Over 80% of a retail banking customer's interactions take place through self service channels. On the other hand: A majority (you read that right) of retail banking customers visit a branch at least once every six months.

Both those numbers sound high to me. Self-service's incredible penetration makes more sense if we remember that the 80% figure includes not only sexy stuff like mobile checkscan but basic self-serve such as ATMs and checking your balance through an IVR (voice-based auto-attendant).

Admit it: You actually have visited a bank branch recently. But what about that other number? Have you visited your branch within the last six months? Statistically speaking, you probably have; both of these paradoxical figures are from Richele Messick at Wells Fargo, who seems like a smart and straight-shooting cookie (letting the chips fall where they may), and I have no reason to think she pulled them out of her imagination.

So, apparently bank branches still matter. Do they matter because banks' online and mobile and kiosk-based solutions are poor, or incomplete?

I don't think that's the heart of it. The banking industry, like the airlines, has done a pretty good job developing their self-service tools, in part because they've been working on it for a long time.

I think when you get down to the appeal of the bank branch, at the heart of it, really, is the heart of it: the desire of human beings to get some reassurance and interaction from other knowledgeable and attentive human beings.

Let's take a look at that though, because it's not as 100% simple an equation as it might sound. Here's the simple, understandable part: Customers 'tell us they want to be able to have the option to meet with our team members, particularly when conducting more complex business, or seeking financial advice," says Ms. Messick.

There seems to be an anchoring phenomenon, some part of human nature, or at least human expectations, that associates things like applying for a mortgage, asking for financial advice, and the like with a particular locale, and particular human beings residing at that particular locale. Home being the place where if you have to go there they have to take you and all that, I guess it's a sense of home, for your money or/and your indebtedness.

And banks, including Wells Fargo, have been embracing and trying to capitalize on this desire, now that they've discovered it. Wells' new Neighborhood Store format branches are smaller branches built into and near buildings where their customers are already shopping and doing their daily activities. Robin Beers, also at Wells, is a banking SVP with an organizational-psych background and an unusual sense of perspective. Beers did an internal study regarding banking channels not long ago and the results uphold my warmth theory, but with some twists.

Robin's not primarily a retail banker, and she didn't have any preconceived notions that we need or don't need branches. What she found is that people were, in effect, and often, in reality, "coming into the branch to learn about online banking."

Well, they wanted to add warmth to something they were looking to explore and thought might be a bit cold. And they thought the branch was the place that knowledge-mixed-withwarmth would be stored.

Ironically, that kind of expertise wasn't in the branches. It was online in the FAQs and so forth, not to mention the community-based peer to peer answers that are starting to define the more technical aspects of customer support for some companies and industries.

So you have a psychological imperative: customers who expert a particular experience in your branches, yet your channelmeisters have determined that this isn't the right channel for what they're looking for.

Customers expect omnichannel while you're multi-channel

It's a good lesson in the omnichannel future that customers seem to be getting to a lot faster than businesses are. That the location, channel, etc. of a company channel don't matter to a customer; they expect to get what they expect to get where and when they happen to be doing (or trying to do) business.

So, what can a bank do about that? Well, they can train, train, train. But these are banking professionals who've already have absorbed, or at least been forced to sit through, an extraordinary amount of training. And banking products change far more quickly than they used to. So training alone isn't a solution. It has to be coupled with internal database tools that can augment the personal knowledge of the banker at the branch, as well as easy availability of self-service within the branch, where it makes sense.

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