Taking It to the Bank

changewaves.socialtechnologies.com

From Social Technologies’ ChangeWaves

Image: Social TechnologiesOver the weekend I had my first positive experience with an automated self-checkout at a grocery store. No starting over, no need for the self-checkout's human helper to pay a visit; the machine accepted cash and distributed change as it should. Perfect. So the use of automation for customer service was something I’d been mulling when I read this story about the proliferation of bank branches in Washington, DC. Apparently, the driver for this is customer service:

In the 1990s, a period of mergers in the financial industry, many banks promoted online services and closed branches. But industry studies showed that customers wanted personal contact when managing their money, and banks began opening more branches in a surge fueled by new players such as Commerce, which models itself as a retail store.

This was surprising for a number of reasons: bank are not known for their service, when tended to feature long lines and bored tellers; ATMs have had the ability to perform most banking services since the mid-1980s; and the rise of the Internet has been transformative for the banking and finance industry, allowing customers to go beyond the convenience of ATMs to conduct almost any transaction from the convenience of their desks. Except for opening an account, closing an account, or securing a loan, there is almost no need to go into a bank (and even these services are increasingly offered online).

Many industries would love to harness the cost, convenience, and time savings that the Internet enables, but due to the vagaries of their business sector they cannot. Finance and banking have been able to exploit these savings, only to be undone by user-fueled nostalgia for customer service that, frankly, has never been that great. But the idea of the banker as a pillar of the community and someone one should know, even if he or she behaves like Mr. Potter, is apparently ingrained in the American consumer psyche, along with the “family farm.”

This raises a number of questions for retailers in the digital age: what does this mean for retail in the future? Are there other businesses that will be unable to reduce costs and increase convenience via the Internet because consumer tradition dictates face-to-face contact? To what extent does human contact trump convenience and why? And conversely, where do retailers draw the line between offering human contact and seizing the advantages the Internet provides?

Now, if you’ll excuse me, I’ve got to transfer funds into my checking account. Done!