Andrew Haslip - Datamonitor Financial Services - Shifts in consumer behaviours redefining the branch experience

Shifts in Consumer Behaviours: redefining the branch

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By Andrew Haslip June 2014

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Agenda

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Australians’ use of the branch

How behaviours are changing

What needs to be retained in branch service

Who is providing this already

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Methodology Financial Services Consumer Insight Survey Coverage

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2013 sample: 29,000 consumers worldwide, 2,000 in Australia

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Overview The branch as an enduring channel of comfort

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Use is down Costs are up Importance remains

42% still think a branch is important, if only for emergencies 21% still want branch staff to explain the more complex financial products

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Overview Current distribution of banking has swung in favour of digital channels

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Mobile will overtake the call centre

in 2014

Source: Datamonitor Financial FSCI Survey

91%

93%

52%

51%

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Overview Common banking tasks are performed online or increasingly on the phone

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Source: Datamonitor Financial FSCI Survey

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Overview With most Australians comfortable without it

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Source: Datamonitor Financial FSCI Survey

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Overview Leaving banks with costly and little used channels

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Average banking transaction costs in the US

Source: CEB TowerGroup (2012)

ADI points of presence, branches

Source: APRA

$3.91/trans

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

The branch as a starting point

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Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Customer acquisitionConsumers still see the branch as the place to start a banking relationship

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57%  of  Australians  would  not  consider  a  bank  without  physical  branches  if  switching  banks

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Customer acquisitionOver time the branch has held up as the channel for becoming the MFI

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Datamonitor  Financial  Services  Consumer  Insight  Survey  2012-­‐13  

Transaction  account  opening  in  Australia  

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Customer acquisitionME Bank is putting the bank to work, maximizing convenience

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

• ME Bank workplace banking kiosk launched in February 2013 !

• Combines face-to-face and digital banking and addresses the difficulty many people have finding time to go to their bank !

• Part of its strategy to quadruple its client base to 1m

Source: Datamonitor Financial FSCI Survey

Source: ME Bank website

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

The branch as a source of advice

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AdviceThe branch endures for non-transactional banking

14Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Branch  staff  are  the  gate  keepers  

of  the  bank  

Source: Datamonitor Financial FSCI Survey

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

AdviceNAB teller staff offer advice• Focus on providing financial advice not transactional services via

branch • Greater investments in staff gives more opportunity to cross-sell

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Source: Datamonitor Financial FSCI Survey

AdviceBlueShore Financial goes mass affluent with ‘Financial Spas’

16Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

• Simple Canadian credit union reinvents its branches as ‘spas’ to target more affluent consumers

• Changes banking from dentist check up to premium spa days

Consistent  above  system  deposit  growth  

10%  in  2012

Increase  in  business  volume  despite  no  net  

gain  in  40,000  client  base

Assets  reached  $3bn  in  2013  up  from  $2bn  in  

2009  

Source: https://www.blueshorefinancial.com/

AdviceVideo conferencing is bringing expertise to remote communities and clients

• Defence Bank’s customers to talk face-to-face with a banking consultant from their home at a time convenient to them

• Targeted at 20 and 30 year olds to get them to establish a ‘personal’ banking relationship even when they don’t have access to a branch

• Designed to facilitate higher value discussions on loans and planning • ANZ Wealth Presence also operates along similar lines

17Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

http://www.defencebank.com.au/video-­‐call-­‐centre-­‐launch-­‐media-­‐release

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

The branch as a branding tool

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BrandingFlagship branches used to position the bank

• CUA flagship branch opened in Brisbane with more emphasis on advice than transaction

• NAB opens a ‘smart store’ in Melbourne • BNP Paribas’s flagship Opera branch targets expats • Chase Bank in the US, opened an innovation branch, similar to a

flagship branch but designed to test new ideas • Emphasis on engaging customer in innovation

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30%  of  Australians  view  their  bank  as    

forward  looking  and  innovative  

Almost  20%  of  switchers  look  for  a  new  bank  that  is  innovative  

Retention Acquisition  

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

BrandingFrank by OCBC seeks to reengage the youth with banking and branches

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• Brand dedicated to the youth segment • Uses branch design and location to engage • Focus on segment specific products • Branches showcase products evoking typical retail store !!

• 3x University locations • 2x mall outlet

Source: http://www.frankbyocbc.com/

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Branches need to be integrated

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Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Channel integrationCustomers are multi-channel and so should be the sales process

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Channels  used  by  Australians  in  arranging  loans

Aussies aren’t looking for

channel choice as much as multiple points of contact

Source: Datamonitor Financial FSCI Survey

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Support start/stop and partial customer journeys

Channel integrationOffering customers the ability to complete their journey over multiple channels, with the branch supporting

Source: http://www.avoka.com/

Having the branch integrated with other channels will sell more products and services, reduce abandonment rates, and improve the customer experience.

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product. 23

Mobil23%

48%8%

1%

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

The Future

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Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Future There is hope as Aussies are generally happy with their branch

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Datamonitor  Financial  Services  Consumer  Insight  Survey    

Future Coles Financial takes another step forward

26Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

Classic  affinity    

Full compet

itor

1997 Credit card

2002 12 products

2007 Tesco compare

2008 Buy out of JV

2010 1st Bank product

2011 1st bond

2012 Offer mortgages

Deposits

Underwritten by Westfarmers

BankHome Loans

Source: Tesco Bank website

• ADI status one more step along a well trodden road • Other markets have proven the market potential (US, UK, Canada) • Key Strength is its store network

Consumer Attitudes to the Branch © Datamonitor. This report is a licensed product.

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