Alasdair Paterson speaks to Chris Popple, managing director of digital at RBS, and considers what will happen to old-fashioned bricks and mortar banks as a result of how new modes of communication are affecting customer interaction.
The way in which banks interact with their customers is changing radically.
The increased efficiency and cost reductions offered by digital channels as well as the rise in mobile banking, in particular, as a preferred method of communicating, there are now a variety of ways in which customers can be in contact with their banks.
"Customers are definitely communicating with us in different ways," says Chris Popple, managing director of digital at RBS. "Millions of customers still walk into one of our branches every year and we still have hundreds of thousands of calls each week, as well as a huge amount on mobile banking. Our average mobile banking user logs in 30 times a month - that's at least once a day."
Another significant change that banks, as well as businesses in other sectors, have had to face up to is that some forms of modern communication may no longer be private, with conversations taking place in the social sphere.
"Social - it's a big word, but it is now a growing expectation that we will do something and we will listen," says Popple. "There is anticipation that banks and business will listen to people. Sometimes [it's about] adding another channel and another touch point where we need to respond."
Contact, however, can be a two-way street, as demonstrated by RBS Group subisidiary Natwest, which has decided to be proactive rather than wait for customers to get in touch.
"There are over 3,000 conversations that we start up every week through Twitter and Facebook," explains Popple. "Most of these conversations are different and personal to each customer. They are not a customer calling us and seeking advice or an answer to a problem; they are announcing to their friends, to the world, the Twittersphere, that they are unhappy about something - maybe they lost their card, etc. What we do is look for that and proactively offer help.
"We think it's really working. We get extremely good feedback - over 90% of people we contact in this way say that they would strongly recommend us as a bank based on that interaction and through that channel.
"What is important is having a mechanism to deliver information to you when you need it. What we want to do with those channels in financial services is open ourselves up to pushing information out," he adds.
Anticipating customers' needs
These new technologies, coupled with new levels of data, enable financial organisations to begin to win back the consumer's trust. For example, RBS will warn a customer via a text message that they're about to go overdrawn so that they can avoid bank charges.
"The feedback has been tremendous - customers love it," says Popple. "We want our customers to behave well. We want them to be successful with their finances."
It's a sentiment that reflects a new trend across the whole of financial services in Europe as banks look to be successful off the back of their customers' success rather than their failings.
To help foster closer relationships, Popple says RBS is investing in such areas as service-oriented prompts that enable staff to establish a context for each customer, particularly those that visit the branch or contact it via telephone, so that the customer doesn't have to repeat information the bank already holds and the bank can offer relevant advice.
Popple says that while he doesn't want to appear pompous, he believes that banking should be in the top five most important things that matter to people.
"We're passionate about actually understanding what people need and then building a service and product that meets that," he explains. "I talk to people who have been here decades, people in branch that have been there 20 to 30 years, and they love the idea that we can get back to the attitude we had 30 to 40 years ago, when it was a feeling that you were making an impact on people, when [banking] was simply local.
"Now we can have that impact through the phone, though digital, so I know what we really want to be doing is making a difference to people every day."
Digital and physical: not mutually exclusive
Of course, increasing automation, coupled with news reports of huge lay-offs within retail banking, raises the question of what role people will actually play. Popple, however, says that staff will always be required.
"We will always need people in that way, particularly on the phone," he says. "But this can also extend to people that help digital. It's really important to understand that mobile banking and online banking, or our Facebook page, are complementing, not in competition with, our other channels, so, for instance, we have numerous people in our centres now who have moved from answering phone calls to answering web chats."
As well as the potential impact on staff, the advent of digital has also called into question the future of the physical branch. Popple, though, believes the two will coexist, although the branches will see some physical alterations.
"The physical layout within the branch is going to change," he states, gesturing out the window to one of Natwest's new flagship branches in central London. "I think the branch [will open] the space up, so it's much more inviting for a personal banker to help you.
"I think there will be fewer and fewer cash transactions and cheque clearings happening in this channel, so we'll see... a change in the physical branch to be more suited to our customers."
RBS has more than 2,000 branches, and hopes to open more ATMs areas where there is high demand, such as train stations. So, for now, while digital banking becomes increasingly influential, it seems that this bank at least will remain a physical presence in our lives.