A Cisco survey, released through its Internet Business Solutions Group,  of 5,300 consumers across eight developed- and emerging countries (US, UK, Canada, Germany, France, Brazil, China and Mexico) shows consumer preferences for branches, mobile, video and social.

The 5 key findings:

  1. Branch and virtual are complementary.
  2. Interest in virtual channels is growing.
  3. There is little interest in banking via social channels.
  4. Mobile will become the dominant channel.
  5. There is high interest in video banking.

Branch and Virtual are Complementary Services

Cisco tested nine different potential future banking concepts to gauge consumer interest, including such offline branch include The two that showed the greatest potential were a brick-and-mortar specialty branch (including financial education, notary services, tax preparation, insurance products and realty services) and a purely virtual branch. The findings show that the death of the branch has been greatly exaggerated.

  • The most avid adopters of virtual channels — tech-savvy consumers — are also among the most frequent branch visitors.
  • 22% of respondents said they would switch financial institutions rather than adopt all-virtual channels if their bank eliminated branches.
  • The main obstacles that might prevent consumers to adopt a purely virtual branch include:
    • 24%: concerns about security of information
    • 21%: lack of a personal touch
    • 16%: potential difficulties using all-online channels to resolve customer service issues.

Interest in Virtual Channels Is Growing

  • 38% of North American respondents expressed a high degree of interest in virtual banking.

Little Interest in Banking Through Social Channels

An overwhelming number of customers are reluctant to mix banking with social activities.

  • Only 1% of consumers in developed countries and 8% in emerging markets indicated an interest in using social channels to conduct banking transactions.
  • A key reason for their reluctance is concern about privacy and lack of control over personal information.
  • 50% expressed a high degree of interest in using social platforms (presumably Facebook) for person-to-person payments.
  • 31% were intrigued by the idea of banks analyzing one’s social network as a factor in determining credit worthiness.

Mobile to Become the Dominant Channel

Cisco predicts that by 2014, mobile will overtake desktop computers as the primary access point in banking. The segment most strongly in favor of mobile banking is younger customers, with an average age of 33. While these respondents clearly have a preference for mobile banking, it’s important to note that they do not want it to replace other channels. They visit branches 2.6 times a month on average, compared to 2.3 times across all respondents, and are very supportive of using multiple services in an omnichannel environment.

The most interesting mobility features:

  • 22%: real-time expense tracking and money management.
  • 21%: remote deposit by taking a picture of a check.
  • 18%: using mobile phone as a payment mechanism.

High Interest in Video Banking

Consumers expressed interest in the ability to interact with their banker via video — 47% in developed countries and 78% in emerging markets. 23% of consumers in developed countries and 43% in emerging markets saw the use of video conferencing with remote experts as a way to enhance the quality of advice in situations where access to quality expertise is a concern.

BMO has deployed a video banking solution (provided by Cisco) in 120 of its Canadian branches. RBS Citizens is testing a similar system in 17 of its branches. BofA has been toying with the technology in experimental concept stores since around 2010.

Concerns About Data But Banks Most Trusted

Significant concerns about privacy, security, and identity theft were prevalent among all consumers, and not limited to banking. Cisco suggests banks could play a new role in the digital age, acting as infomediaries — a trusted steward of consumers’ online personal information “a secure data bank.” The majority of consumers consider banks best qualified to act as stewards over their digital information. Their preferences in terms of who is best qualified to act as stewards over their digital information:

  • 42%: banks
  • 19%: government
  • 6%: telcos.
  •  4%: social media sites.

Snap! principle of the evolution of banking channels:

Branch and virtual are complementary. Build on the strengths of each.

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