Retail Banking Branches: The Forgotten Credit Card Marketing Channel

by Ken Paterson 0

With the publication of our most recentCustomerMonitor Survey Series Report, Consumers and Retail BankingChannels: Old Channels Never Die, I am again reminded of the powerof a physical distribution channel. Yes, they are by definition oldfashioned, heavy on cash handling, and probably suffering from aslow decline in frequency of visits as electronic channels siphonoff some activity. But electronic channels are incremental, andhave not replaced branches by a long shot. When a customer reallyneeds a problem fixed or requires the visual reassurance ofphysically handling cash or a check transaction, nothing beats aface-to-face transaction. Literally.

According to our consumer survey, the most preferred communicationchannels with FIs are first going in to a branch and speaking witha teller, followed by speaking with a CSR. And satisfaction withthese two face-to-face “channels” within the branch surpasses allother communication methods. As most business and sales peopleknow, sometimes the personal touch is simply necessary-maybe nottechnically-but certainly to close (or save) the deal. And so itgoes with retail banking customers.

Visiting a branch to open an account of any type is a relativelyinfrequent occurrence, especially compared with cash or checkhandling. And certainly electronic channels including the Web andcall centers have become critical channels for credit cardorigination. But branches are still mentioned as a channel forcredit applications at rates comparable to electronicchannels.

Historically, credit card origination has migrated to non-branchchannels able to reach mass prospect groups with carefully crafted,targeted, controlled, and disclosed offers. It can be cumbersome totrain branch staff in taking credit card applications, handlingcompliance concerns, and delivering instant approvals (ordeclines). And of course, silo-driven politics can disrupt thecooperation of retail banking and consumer creditorganizations.

But consumers go to branches for complex tasks and tasks requiringa high degree of trust and validation-sounds consistent with acredit card application. Indeed, leading issuers like Chase andWells Fargo have made efforts to better integrate the branchchannel for credit card apps, especially for small business creditcards. As retail banks continue to work to rationalize the expenseof branches, leveraging the branch as a credit card originationchannel can provide an additional branch revenue stream (or costallocation destination).

Consumers, even young consumers, care about branches. Credit cardmarketers should too.