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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