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As financial institutions struggle to emerge from the economic effects of Covid-19, one thing has become very evident: as much as there is enthusiasm for digitisation in banking, there is an equal appetite for human connection. The challenge now is how best to find the right balance of digital vs physical banking channels in a post-Covid environment.
The pandemic clearly exposed the fragility of consumers and staff members alike and the critical need for empathic “hearts and minds” discussions. Even before Covid, banks locally and globally had been wrestling with how best to balance their digital solutions with traditional physical locations.
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There is no doubt that digitisation has a huge role to play in helping banks become more process and cost efficient, but consumers are basically social animals and desire social connections and interactions which can best be provided in a brick and mortar branch, albeit a slightly different branch to those of days past. Customers are “time poor” so there is still a distinct need to digitise, but, as much as we can automate for administrative transactions, when it comes to purchase decisions, consumers generally opt for input from real people.
The results of the 2020 SA Customer Satisfaction Index report bear testimony to this, with African Bank ranked first for the second year in a row for its branch and contact centre channels.
A 2019 global study on consumer insights, conducted by market researcher Censuswide, showed that more than 80% of respondents said that they would want to talk to a human being for a complex or sensitive interaction. And an overwhelming 88% had visited a branch within the last year. These percentages are similar to the experiences locally where more than 80% of all customers still elected to go into a branch to conclude anything “needs-based” during 2020. In fact, at African Bank, 76% of all loans, 93% of MyWorld bank accounts, 83% of investment accounts and 97% of funeral policies were opened by customers in a branch as opposed to online.
This points to the fact that banks need to intertwine the age-old value of trust and connection with new technology to improve the lives of their customers. Today it is more about how one can bring one’s digital infrastructure into the physical and also how one can flex one’s physical infrastructure to become more portable through pop-ups and mobile bus/mini bus and so on. Taking banking to the people is critical, particularly in South Africa. It is also an exciting opportunity to collaborate and partner with other retailers or financial technologists to meet ongoing consumer demand.
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It seems fair to say that the success in the banking industry in 2021 will rely on choice. Banks must adapt to consumers’ needs while making sure all groups of society remain included. The obvious route will be through solutions that bridge the digital and physical worlds of banking. Covid definitely hastened the rate of digital adoption in South Africa and showed how nearly every aspect of banking could be performed remotely.
It is hard to predict the future with any certainty right now, but a choice between digital or bricks and mortar for the future of banking is a false dichotomy. Clearly, there is room for both. We need to remember that one of the most important ingredients in the future of any successful bank will remain the warmth and empathy of human beings.
Timothy is African Bank’s channel executive
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