Video Transcript
Rokture Ramblings – Episode 15 – Digital or Branches?
Hello everyone, and welcome to Rokture Ramblings, where I discuss topics around digital
marketing, marketing technology, and marketing operations for the financial services industry.
It’s been a long time, but today’s topic is around a post that I had made on LinkedIn, and it had
to do with TD Bank recently closing a number of different branches, it made the national news.
And so I figured this is something that I should touch upon, because ultimately what’s happening
here is that there’s a lot of digital transformation that’s taking place. So today is, can digital
replace the brick and mortar branch? These are the subtopics that we’ll go over, which is what’s
missing in digital, security and trust, compliance and fraud, impact to community, what do
customers want, and then the future in terms of what that’s going to bring. So let’s start off
with what’s missing. Everybody for the most part understands that digital is very powerful,
very scalable, but ultimately there is something that’s
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missing from that experience. The first thing is that personalization is pretty much lacking
on a lot of digital transactions. It’s effective, it’s productive, it’s efficient, but it’s
not personalized. You don’t get that conversation that you do at the branch, and you don’t get
that sort of personal touch that is there if you are a familiar site to those branch employees.
The experiences on digital are also very generic too. They’re made for the sort of 80 -20, or
they use the 80 -20 rule, so they cater to the 80 % of the audience and what it is that they’re doing,
and not necessarily for your specific needs. Now, the great news is that AI can change that perception,
and it can really make digital a lot more effective and a lot more personalized. It’s just a matter
of making sure that financial institutions actually make use of that technology to drive those
types of experiences. But you do have to be careful because you have to seek a balance. Too much
personalization is a little bit
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creepy, and also on top of that, your personalization is only as good as the data sources that
you have. One example that I often see is that if somebody has their full name in their records
for the financial institution, you want to refer to them as the name that they prefer to be used.
Of course, that’s harder to capture, but it also tells them immediately that, oh, you’re just
pulling from some record out there because nobody calls me my full name.
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Next is around security and trust. The biggest risk to brand perception is some sort of security
intrusion. The moment that it’s all over the news that such and such financial institution
had records that were compromised, then there goes your brand’s value. That has to be protected
no matter what. The other problem, too, is that it’s not only an internal issue, but you have
to make sure to vet your third -party vendors. Even if it’s something that took place with a partner
or a vendor, if it’s associated with your brand name, then your brand will also suffer, and you’ll
have to suffer the consequences of that. Data hygiene and access to these data elements is critical.
You should only offer access to this type of confidential data on an as -needed basis. Make sure
that that is very tightly controlled. Also make sure that you have regular security assessments,
as that’s the only way to make sure that there’s very little risk in terms of your data getting
compromised. Institutions that I’ve
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worked in the past, we’ve actually had hacking parties or hacking activities to see who can
break in, and also that’s facilitated by a security company that specializes in that. That’s
probably something worth evaluating.
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Compliance and fraud are also concerns, too. When you get rid of that physical branch, all of
a sudden it becomes a lot easier for fraudsters to scale and attack the operations that you are
engaging in. Digital really is the easiest entry for fraud, because it’s oftentimes anonymous,
and also it opens up the entire world to be able to try to access your assets and try to break in.
Technology can help with this to uncover where there’s instances of fraud, but just make sure
that it’s not intrusive. You don’t want to penalize the good to try to keep out the evil, because
ultimately if you make it too intrusive, everybody will leave, and that doesn’t really put
you in a good position. But done right, this type of compliance and fraud monitoring can actually
reduce expenses and increase the brand value, as people will associate your brand with a brand
that is very compliant, very difficult to commit against in terms of fraud, and also that again,
there’s safety and trust and just a great perception
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of the brand when you have this in place.
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The impact to communities. When it comes to closing branches, oftentimes these decisions
are made just looking at a spreadsheet and not absolutely understanding and wondering, well,
what is it going to do to that local community? So make sure to consider the impact of those closures.
The key here is that a lot of, especially small businesses, they want to do business with a local
firm. And so with that, you want to make sure that when a branch does close, that you still maintain
some sort of local presence. And that will help to at least alleviate that concern and let them
understand that there are options in terms of being able to still conduct business, even though
it may not necessarily be at what we traditionally know as a branch. The other things too, is
to tailor offerings to suit clients and the region. So there are some regional differences.
Every town is different. Every business’s need is different. So if a branch is something that
is an integral part of that experience, maybe
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it’s time to reevaluate whether it’s worth closing it or not, or to come up with an alternative
that is suitable and not so compromised that it takes away from what those offerings might be.
But ultimately what you want to do though, in assessing whether the digital experience can
take the place of a branch experience, is to take a look at your customer preferences. So some
brands are better off keeping those branches. If the brand is really into personal service
and being there as a local community partner, it may be at your best interest to keep those branches.
The other thing too, is also depending on the level of sophistication or the level of complex
solutions that you’re offering. Those may require an in -person visit. So if it’s not a traditional
branch with tellers and transactions that take place, some sort of a meeting place needs to
be established to allow those discussions to take place because it almost always ends up being
a better experience when it’s face to face. And then
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finally, where are your customers? Are they doing business digitally? If they’re not, then
now is not a time to start forcing them to do so. But if they are, then maybe that is their preference.
Where do they prefer to do business? If you aren’t seeing a lot of foot traffic, is it because
of your branch location or is it because they prefer to do business digitally? So be where your
clients want you to be and your customers want you to be, and don’t force them because of expense
cutting measures that are taking place. So where does this leave us? There’s always going to
be a combination of physical and digital. There are so many different scenarios and circumstances
that it really makes sense to do what is best for your customers. And in some cases, that is going
to be a branch. And I also believe that there are instances where individuals use both physical
and digital in order to really be able to keep that relationship going with your institution.
So think strategically and not short
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term, as those expense reductions of eliminating those branches could have a damaging impact
on your brand as a whole. And then also within the entire organization, pre -flexibility, is
that something that with business evolving, technology evolving, everything’s going to
sort of be circular in terms of there may be instances where branches are out of style and out
of vogue, but then people will start to gravitate and crave that personal experience that you
can only get in person. So just read the market, read what your customers and clients are telling
you, and try to react and act accordingly. So with that, that’s my deeper dive into this topic.
As I mentioned, I did post this on LinkedIn. And so there you’ll see and also a blog entry on my
website. But this page here just has my contact information. So if you do want to discuss this
or any other topic that has to do with anything having to do with digital and within financial
services, then reach out to me. Look forward to speaking to
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you again. And hopefully we’ll make these a little bit more frequent and touch upon some other
subjects going forward. Thank you. Bye -bye.
