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With everyone talking about adopting virtual branches lately…

Posted by David Peterson on Tue, Apr 09, 2013 @ 14:04 PM

Think you have a true virtual branch?  Maybe not, read on …

If I defined a “branch” as being:

  • A place where customers could perform basic banking transactions

  • Staffed by trained professionals

  • Had all of the equipment and services needed

  • Had its own budget

  • Had a senior manager overseeing its success

Would your current online offering fit this definition of a virtual branch? 

I find that most financial institutions have a limited view of what the virtual branch is and what it can (or should) be.  As I have conversations with bank and credit union professionals about the virtual branch, I am amazed by comments that lead me to believe that there is a great deal of myths and misconceptions about what the virtual branch is and can be.  In this series of blog posts, my goal will be  to examine these myths and dispel them, using verifiable facts and data and adding my own color and opinions to each component of this series.  It is my hope that as you examine all of the evidence that you would not leave the discussion unaffected. 

You may decide to ignore the truths of what the virtual branch has become, but this  will not change the fact that this method of access  has (or soon will be) your largest branch, by both number of primary customers/members and financially.  The question is whether you will strategically address it as your largest branch or continue to view the virtual branch (I’ll refer to it as VB throughout the rest these posts) as just a tactical operational expense.

The types of myths I will address in this series will cover subjects like:

  • Our end users do not desire the VB as their primary channel

  • Devices such as smartphones and tablets are channels (Spoiler note: your customer is the channel!)

  • I can’t charge for any online banking or mobile activity

  • Only young people are interested in online banking

  • Online/Mobile banking is just an operational expense

  • I should abandon online and concentrate on a mobile only strategy

  • End users don’t care about a consistent user experience

  • My customers/members do not expect our institution to offer the same experience as Apple, Google and Facebook

  • My customers/members don’t use smartphones and tablets very much if at all

  • A compelling user experience will not engage the end user to do more with our institution online

  • We do not need to treat our online banking as we do a branch, it’s completely different

  • We have plenty of time to offer more advanced services in our community, we are not competing against larger regional FIs

While not comprehensive, this list will give you an idea of the subjects that this series will cover.  So stay tuned and setup a reminder to check this blog often so you can see the latest post.  And whether you agree or not, send me a reply. I am particularly interested in those that would challenge my assertions, .  Perhaps you will change my mind on an issue or I might wind up changing yours, either way, I welcome the conversation.

David Peterson serves Q2ebanking as Executive Vice President, Strategy & Innovation, and is Chairman of GACHA, a nonprofit payments association located in Atlanta, Georgia.

Tags: Virtual Branch, Online Banking, Branch Banking, Customer Experience