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Tech Versus Touch in Retail Financial Services: Finding the Right Balance

Posted by Val Srinivas, Banking & Securities research leader, Deloitte Services LP, on September 3, 2014

A few months ago, I had no choice but to visit my local bank to resolve a problem with a check deposit. I had tried using the mobile app from home, but, for some reason, it was not able to recognize the check. At the branch, when it was my turn to be served, the teller instructed me to use the  "PIN pad" (the device that sits on teller windows) to complete my transaction.

As I was interacting with this technology, the teller was attempting to engage me in a friendly chat about the weather or some other pleasantry. But instead of appreciating this rapport-building effort, I found this behavior a bit annoying. I just wanted to finish the job at hand without any further hassle and move on to my next chore for the day.

I did not ruminate on this incident and had almost forgotten it until recently, when I came across an article in the Journal of Marketing on the role of technology in interpersonal service interactions.1

Tech is a social barrier
According to the authors of this paper, technology acts as a barrier in service interactions, and it can either increase or decrease customer satisfaction depending on whether  "rapport" by service staff is present. There is no universal definition of rapport, but in this research it is considered to include courtesy, responsiveness, knowledge and a  "warm welcome" by the service staff; essentially the things we expect service professionals to practice in building strong customer relationships.

Using data from a J.D. Power survey and a research experiment, the authors show that when the service provider (say, a bank teller, as in my example) is engaging in rapport-building efforts, frontline technology — such as self-service kiosks, point-of-sale terminals, scanners, and tablets — prevents  "the customer from responding in kind" and decreases service encounter evaluations. But when service staff are not practicing rapport-building successfully, technology acts as a social barrier  "allowing customers to retreat from the relatively unpleasant service interaction," and increasing satisfaction.

In other words, technology  "erodes the positive effects of a pleasant encounter," but in unpleasant encounters, technology  "offsets … the negative effects."2

This finding might seem counter-intuitive at first — why would technology diminish the perceived value of rapport in service exchanges instead of enhancing it? But it does make sense when you think about it. Whether at a kiosk or scanner and even when involving routine transactions, any self-service technology requires customers to apply their cognitive resources. And this effort, required by the technology, acts as a barrier in the employee-customer social intercourse, and can diminish the effects of both positive and negative employee behaviors.

Touch plus tech, not always the best
I would assert that most people assume, as I did until I read this paper, that the combination of tech and touch (i.e., courteous, responsive, and knowledgeable staff) is always better than tech or touch alone.

But as the paper from the Journal of Marketing shows, it is not that simple; the interaction effect of frontline technology with the behavior of service staff on customer experience is in fact quite complex. I wonder how many professionals who design technology-infused service environments appreciate this fact, especially in financial services.

Furthermore, this issue is becoming more critical as technology interfaces — such as self-service kiosks, point-of-sale terminals, scanners and tablets — become ubiquitous. Think of all the places where such technology has become commonplace: airports, hotels, retail stores, health centers and, increasingly, bank branches and other financial centers.

The right tech-touch
In my mind, this study's findings raise a number of questions: What is the right balance between tech and touch in delivering financial services? How do you manage customer experience when both technology and service staff are present? How do you train the service delivery staff to know when to engage in rapport, and when not, in technology-infused service environments?

As consumers expect more frontline technology in service environments and there is increased pressure to reduce operating costs through such technologies, finding the right answers to these questions becomes important. And no doubt, paying greater attention to how tech and touch interact and how you train service staff to behave in these environments will become more vital in the future.

What is your opinion? What other insights does the research I cited provide for financial services firms in the design of service delivery environments?

1Michael Giebelhausen, Stacey G. Robinson, Nancy J. Sirianni, and Michael K. Brady, “Touch Versus Tech: When Technology Functions as a Barrier or a Benefit to Service Encounters,” Journal of Marketing Vol. 78, No. 4 (July 2014): 113-124.
2This research did not consider the impact of rapport-building efforts directly connected to the technology use (such as courtesy, responsiveness, and knowledge related to the technology), but it is possible that such behaviors on the part of service staff do not have the same effects as the more general rapport-building actions unrelated to the technology.

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