The Challenges of Online Branching

Old Bank Branch

Over the last couple of years I have been asked by a variety of credit unions to assist with online branch initiatives, to address concerns regarding online branch strategy, and to help define differences between member expectations in physical versus online branch environments. In this article I will highlight three of the most important challenges facing credit unions trying to develop online branching strategy even while maintaining a physical branch network.

Challenge 1: Physical Branches Facilitate Human Connections, Online Branches Facilitate Digital Connections 

A physical branch is typically geared to connecting people to people, while the online branch is geared to connecting people to digital services. This is a challenge for any credit union that defines their “people” as the most important element of their competitive advantage.

As more consumers move to self-service via online channels and ATMs, the opportunity for consumers to interact with that critical element of competitive advantage – the people – diminishes greatly if no means exist to connect people to people in the online branch.

Given the trends, if the interaction between staff and members is the only measure of competitive advantage, then credit unions with no discernible advantage outside of personal interaction will be decidedly disadvantaged online. Consumers will be left to judge the value of the credit union solely on the merits of its digital services. In the case described above, this means judgement based on a factor other than what is most important to the credit union itself.

Challenge 2: Physical Branches Support Product, Online Branches Require Tech Support

Consumers coming into a physical branch typically have common needs, generally broken down into assistance with the following:

  • Processing a transaction related to an existing product or service;
  • Solving product or service problem (PIN change, fees, statement errors, etc.);
  • Obtaining a new product or service.

Rarely do consumers come into a physical branch with a request for support related to usage of the branch itself.

Within the online branch, however, consumers not only seek to satisfy the needs outlined above, but they also often seek support for using the online branch itself. The variety of desktop computer web browsers and mobile browsers, the processing power of computers and devices, even the basic computer skill of members all combine to add a complex “fourth need” of technical support that online branches must accommodate (but that physical branches rarely encounter).

Challenge 3: Physical Branch Personnel Require Training, Online Branches Require… What, Exactly?

The staff in a physical branch setting, particularly front line staff, receive training to support the member needs they will most likely encounter on a daily basis. For example, they are trained to use the systems required for transaction processing. They are trained to help members solve problems. They are trained to take applications for products and services and/or to sell products and services to members.

With regard to an online branch, usually either the marketing department or the IT department “owns” the online branch. The training that employees receive in either of these departments is probably nothing like the service-oriented training that staff working in a physical branch receive. Marketing staff, for example, are likely being trained on topics such as maximizing marketing ROI, crafting brand messages, compliance in messaging. IT is likely being trained on such topics as maintaining system security, managing system upgrades, or how to utilize virtualization.

In the case of physical branch staff training and the training of those with online branch responsibility, few training efforts provide the kind of broad training necessary to construct, manage and support a complete, member-focused online branch.

Do solutions exist?

Fortunately, there are solutions to these unique challenges, though most are not inexpensive or simple to implement.

Solution 1: Build Your Competitive Advantage Into the Online Branch

For credit unions that maintain that their people (or the service the people deliver to members) are the core foundation of the brand and value proposition, then that experience should be built into the virtual branch. That means offering opportunities for staff/member interaction within the online branch itself using tools such as chat, integrated support ticket systems, and perhaps even video.

Take the online-only “bank” Simple as an example of integrating consumer connections. Simple certainly offers one-click access to knowledge base articles to allow for user self-service, but the company also prominently displays an online support option within its home banking platform that allows users to connect to staff in order to obtain more personalized assistance (Simple calls these interactions “conversations”). I’ll add that from personal experience, staff interactions, word choice, and style match up with the presentation of content in other areas of the Simple site.

For many credit unions, similar features are often hidden, if offered at all. To connect to a person within the virtual branch often requires some effort to even locate the option online. This would certainly NOT be the case in a physical branch (unless yours is the kind of branch where staff hide under desks and behind curtains whenever members walk in the door).

If you desire for members to connect to your staff, then make that option highly visible and easily accessible – and maybe even take it a step further and personalize the interaction through using actual staff member names rather than presenting support resource as nameless/faceless automatons.

Of course, if you find that integrating staff in the way you envision is impossible or difficult to manage, then you will need to consider whether you have the right value proposition for an online environment. If this is the case, solving the issue requires engaging in critically important strategic discussion with focus on such topics as whether you should have distinct, channel-oriented value propositions, separate channel branding, or even whether you should change the value proposition for the entire organization.

Solution 2: Beef Up Your Tech Support Capabilities

If a member called or walked into one of your physical branches and asked for assistance learning how to use their smart phone, chances are your staff would politely decline to help. But what if that assistance was necessary to ensure a member’s successful connection to the online branch? Would you expect your staff to work with the member? More than likely.

Credit union staff, whether accessed in person in a physical branch, via phone or via online channels, will encounter growing requests for tech support in addition to regular support for credit union product and services. The question is whether they are up to the challenge.

I can think back to my own experience in this area, well before the advent of the home banking channels we know today, to illustrate the importance of developing tech support knowledge within your staff. Years ago I was a credit union call center staff member. One day I received a call from a member standing in front of one of our ATMs. It so happened to be different than the model in our main office. I had never used that particular machine … in fact, had never even seen the machine. The member had a most basic question about some physical machine feature and I couldn’t answer the question, and sadly neither could any of my call center colleagues, though each of us could discuss, in-depth, the benefits of our ATM program.

A successful online branch requires that the staff behind the scenes know how to use the credit union’s own technology and are equipped to troubleshoot and solve the basic problems members will encounter when using online branch-specific technology.

Solution 3: Choose Online Branch Owners Wisely and Train Accordingly

In the physical world it would be unthinkable to place the branch network under the direction of the marketing or IT department, yet online branches often fall under the direction of one or the other (and in some cases ownership is split between the two). A successful, responsive online branch needs but one owner, tasked with managing a successful virtual branch and given the authority to leverage the resources of marketing and IT, just as those responsible for the physical branch network are.

With established ownership, the online branch will be better able to grow in response to the needs of member-users rather than live within the limiting mandates of marketing or IT. Furthermore, with such ownership focused on member needs and online branch experiences, the specific knowledge and skills required for staff to support the online branch will become readily apparent, with the likely response of ownership being the development and execution of staff training more relevant to the online branch service environment.

Where to go from here?

Some argue that physical branches will go away entirely while others see online initiatives as little but a support to existing physical branches. Regardless of the future of physical branch networks, the fact remains that members are using online branches in greater numbers now than ever before, accessing online branches through a variety of devices, and regularly raising their expectations with regard to online branch service capabilities and quality. To treat an online branch as anything less than a branch undermines the member experience, and, ultimately, leads to failed expectations.

Addressing the three challenges above is but a first step in the direction of building an online branch that is at least as good at serving members as the many well-trained staffers waiting patiently behind countertops for the next member to walk in and ask for help.


Photo Credit: “The Old Bank, Stratford-upon-Avon” by brianac37 is licensed under CC BY 2.0

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