The online and in-branch experience are interdependent

Despite what many assume, nothing says that these changes will be permanent. In fact, while branch activities fell sharply in 2020 due to the lockdown, they were up 20% in 2021. Many customers quickly returned once restrictions were lifted.

It is true that digital sales are increasing (40% in 2021), but total sales are down 10% globally. According to the authors, the increase in digital sales is attributed more to the decline in branch sales than to actual digital earnings.

Improve the digital offer

Although a large part of customers (75%) would like to use the digital channel for certain operations such as opening an account, only between 30 and 35% of customers show a real preference for doing so, and only 15% of these accounts are opened digitally. So there are differences between actual behavior and consumer preference.

Some banks are more successful than others in meeting customer needs in this regard. For example, when it comes to personal loans, UK banks have achieved a digital sales penetration rate of 86%, more than double that of their North American counterparts.

So to be successful, banks must create online and mobile journeys that appeal to frequent users and seduce those who are hesitant to get started, those whom McKinsey calls “digital skeptics.” They should create advanced features to increase engagement.

What to do with physical channels?

Financial institutions must also rethink their physical channels, mainly branches and contact centers.

In fact, 28% of customers continue to prefer branch services, a proportion that rises to almost 50% for sensitive or complex situations such as fraud and advice on financial difficulties. Nearly one-third of branch users say their reasons for preferring in-person service are social considerations, such as meeting a teller they know and having access to the experience.

To ensure that their distribution model meets customer needs effectively and efficiently, banks must take a holistic approach to harness the full potential of all of their distribution channels. To do this, they need to improve their command of data, analytics, and technology.

The moment is therefore “phygital”, a marketing approach that wants the physical branch to open up to digital and, on the contrary, where the digital channel offers customers a more “physical” experience.

This study is based on the McKinsey database, which is based on information provided over the past five years by more than 250 major institutions located in more than 50 countries and a survey of 60,000 consumers in 28 countries.

Dennis Alvarado

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