Branch Banking Positioning

Branch Banking Positioning

Branch Banking Respositioning Discussion

Consumer behavior and their expectations have been changed because of recent global economic crises and revolution in technology; it has compelled financial institutions to reposition themselves in marketplace (Sexton, 2012). Positioning is a concept in marketing that is generally understood to mean “the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category.” The aim of the repositioning is to bring all aspects of institutional business in line with the target market needs, values, preferences and behavior (Hooley et al, 2009).

Consumers make sort of assumptions and compromises while choosing financial institutions/banks. The image of the branch banking as a whole has suffered with the customer loyalty and their perception about retail branch banking. Many positions held in branch banking are becoming outdated and irrelevant. Although there is a huge success of internet banking but customers around globe still want to access the branch and their branch staffs in many scenarios and situations (americanbanker.com, 2011). It is crucial for banks to provide both online and branch banking services in order to achieve overall customer satisfaction. Given below figure shows the US banking channel evolution onwards from 1980 (Delloite, 2008)

Figure1

Above figure shows that growing popularity of internet banking in US and the continued importance of bank branches in addition to the emerging role of mobile banking illustrate the increasing diversity of customers' channel preferences. Customers are becoming increasingly keen to select when, and how, they use different channels. However, this is not just about local preferences. Many customers choose one channel on one day and a different one the next, depending on their specific needs at the time. Analysis of the survey results also shows that customers of different ages have different channel preferences for different interactions. For example, when seeking advice on banking products and services, people under the age of 25 only marginally prefer using a branch instead of the internet (33% compared to internet 29%), while those between the ages of 35 and 54 clearly prefer branches (44% compared to internet 27%). Among customers aged 55 and over, the preference for branch-based advice is even stronger (58% compared to 21% for the internet) (Banking Survey, 2012).

US Age segmentation showing customer's preferred channels for different banking activities

Figure 2

This is especially true when it comes to complex transactions, which customers in all markets prefer to perform in branches. The picture is more varied for advice on products or services. Branches are considered first choice in most markets, but customers in USA, Europe, and Australia prefer to seek advice via an internet service, and call centers.

Banks were supposed to reposition the branch in the eyes of the customer with different services for each customer segment. From a 2012 perspective the advice seems overly simple, asking banks to provide necessary skills to deliver customer solutions, provide bundles to solve needs more holistically, provide flexibility to fulfill local needs and to use the branch ...