What wandering elephants can teach us about changing customer behaviors.
In summer 2021, live stream drone footage of a herd of 15 elephants wandering over 300 miles from their home near the China/Laos border captured the public’s attention. Nearly 14 months after their journey started, they were finally on their way home.
While no one has a definite answer for what inspired the elephants’ journey, scientists suspect the elephants likely left their home due to human disturbances which reduced the availability of food and water. Over time, the elephant population has doubled, but their habitat has shrunk dramatically in that same span. The buffer zones between elephants and humans are disappearing and more and more wildlife areas are becoming urbanized.
The public delighted in observing the elephant antics, but scientists are hoping the escapade raises awareness of the environmental problems caused by the nation’s pollution.
Our changing environment is often the catalyst to adapting behaviors. The COVID-19 pandemic has caused people to adapt in many ways – banking behaviors included.
Branch closures related to pandemic restrictions naturally led to a 30% decline in-branch visits. In a sense, the habitat was changing, but unlike the elephants who left their home, customers hunkered down and rarely left. Out of necessity, customers embraced the convenience of digital channels for their transactional banking needs, leading to a 55% increase in usage in online and mobile banking by March 2021 (JD Power). Bank of America reported an increase of their mobile banking app of 117%!
These days, like those elephants who are slowly making their way back home, customers are returning to the branch. And while there has been a slight recovery, teller transactions remain more than 20% below 2019 levels (Novantas).
It’s time for your financial institution to meet customers where they are. During the pandemic, 15% of customers tried digital for the first time (BAI), and more than 80% planned to maintain the same level of digital banking usage, even after branches fully resumed in-person banking.
That’s not to say the branch is on its way out – in fact, research indicates a hybrid banking model blending in-person and digital tools will be the most effective at meeting a new set of customers’ needs, which have also evolved during the pandemic. But an evolution must take place.
Customers are gaining comfort executing day-to-day transactions via the digital channels, but when it comes to more complex matters, they prefer visiting a branch to work with someone in-person.
Investing in digital technology has been a priority for quite some time, and on the heels of such upheaval in so many areas of life, that remains true. But FIs must be careful not to simply invest in new technology just to match the industry’s expectations of convenience; that will only lead to a commoditization of those attributes associated with digital channels. Instead, FIs must evolve their channel strategy to meet the changing needs of customers; blending the convenience afforded by digital channels with opportunities for customers to engage empathetic, service-oriented humans who can listen, understand, and connect financial solutions to customer needs.
Though their habitats have changed over time, the elephants’ needs remain the same: food, water, and a safe environment. Similarly, customer needs haven’t changed radically since the banking industry began over 200 years ago: they want easy access to their money, some form of relationship with their bank, and trust and personalization. It’s how those needs are met that must evolve to thrive.
