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PCBB Banc Investment Daily February 14, 2013
Banc Investment Daily
February 14, 2013


According to a recent Pew Research study, the percentage of people who read e-books increased from 16% of all Americans ages 16 and older to 23%. At the same time, the number who read printed books in the previous 12 months fell. Reading between the lines, this is yet another example of why banks must find new ways to adapt to changing customer demands. Today's bank customers want many things and you have to be able to give them what they want to maintain customer relationships. At the top of the list is one-stop shopping, which is right up there with personalized service, access to expertise, quick and competent service, on-the-spot problem resolution, and being made to feel appreciated. The trick is to figure out how to give customers what they want, without a sharp jump in costs. To do this, bankers need to think outside the box. As we mentioned in a recent column, kiosks are an up-and-coming trend with banks. While some might consider them expensive to install, according to NCR Global Research, kiosk transactions cost about 75% less than teller transactions, so net-net over time you could come out ahead and give customers what they want. Choosing convenient locations like grocery stores, shopping malls and office buildings can also help effectively expand your bank's footprint. You can also put them in your branches, since NCR also reports that 43% of customers still prefer the branch over other channels. To create a bank of the future, you need to take a multi-channel approach. Let's face it, branches are expensive, but scrapping them entirely is not likely to deliver success either. It's more a matter of finding the right mix between clicks and bricks, an issue all banks have been struggling with for many years. To succeed, continually ask whether the branch network is being used effectively, monitor foot traffic and properly integrate branches with digital channels. Another way to improve here is to check to see whether your branches are focused on the right activities. Research from PWC finds 50% of customers prefer applying for a loan in a local branch, while only 21% prefer to research a credit card there. Understanding who is coming into your branch, why they are there, what their biases are likely to be and having trained staff to assist are important. If you want to push credit cards, know the research shows you are better off using your website (where 63% of customers prefer to search for card info) than a branch. Stories abound about how banks are notoriously slow to adapt to change. Regulation is often blamed, as both policies and procedures also weigh heavy. To help your bank break free, consider a study by Accenture. It found fast-growing companies (grew revenues by 6%+ last year) differ from slow growers in their attitudes toward customer behavior change. Fast growers are more likely to see more opportunity in behavior change than slow growers (88% versus 74%) and are more likely to invest in an effort to capture those opportunities. To move your bank to the fast track, use technology to your advantage and continuously observe and respond to changes in customer behavior to stay ahead. Analyze your own customer information and over time you might better understand them, so you can offer even more personalized service. Finally, be in position to mobilize quickly when trends become apparent. It is easy to wait for large competitors to test the waters, but that might not be advisable in all cases, so be open to change. To truly stay ahead of the curve, be a voracious reader, remain engaged with clients and periodically attend industry conferences to find out what is new and talk to peers. As you just read here today, the future right around the corner.