Sean Farrell

By: Sean Farrell on September 22nd, 2020

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Urban Vs. Rural Banking

Service | Customer Service | Staffing | Thought Leadership

At QDS, we form partnerships with our customers. As a business partner, we want to help you make decisions that will best serve your clients. Our suggestions for these best practices vary based on the market your FI occupies and what clients are looking for in rural versus urban environments.

Here, we will break down the differences between rural and urban consumer behaviors, so you can make the best decisions for your FI based on your clientele. Clients look for convenience and functionality from their FIs. What varies is what that looks like in each market.

Behavior Trends Among Rural Banking Clients

In rural environments, clients typically have fewer options in FIs, so they trust their FI to have full service and the ability to handle a wide variety of transactions in their branches. Rural clients want their FIs to be a one-stop-shop for all their financial needs, especially if their only other option is to seek out another FI that could be miles out of their way.

They tend to place a lot of value on the relationships with an FI’s staff and want to know their financier. Rural clients also place a high value in being known by their institution.

Rural FIs may have a smaller talent pool in their markets, so investing in their employees’ training to ensure the staff is capable of handling a multitude of functions can become paramount to success. Retention of quality talent becomes a key differentiator in rural markets, as quality staff may not be quickly replaced in some markets.

Behavior Trends Among Urban Clients

Urban clients are primarily looking for a high level of efficiency in their FIs. They tend to be more concerned how quickly FIs can complete transactions and how frictionless the experience is. They tend to place value in having a seamless experience with short wait times. They are also more inclined to use self-service options when given the opportunity.

When urban clients choose to interact with staff, they expect the employees available to be knowledgeable. As interactions in urban branches are limited, the quality of the interactions becomes increasingly important.

Urban clients are typically comfortable engaging with the digital channels, but when a complex need or advice is required, they have high expectations that staff can provide valuable insight for their financial journey.

Challenges In Rural Versus Urban Markets

In a rural market, the biggest challenges tend to revolve around a lack of density in the market. Rural clients have less options in where they choose to handle their finances and are more likely to be frustrated if things go wrong at their select FI, as branch density tends to be more sparse.

Rural FIs must closely consider their market share and the ROI in the technology they implement in their branches. They should invest wisely in their properties and implement the technologies that will best meet their clients’ needs.

A high market share is not an excuse for poor customer or member experience. Rural markets are especially driven by uptime as there are often not other immediate choices if an ATM were to be down. Managed Services can be of high value in rural markets to increase uptime and allow maximum user availability.

In an urban market, most challenges tend to revolve around meeting clients’ needs through a wide array of channels. Urban consumers expect branches to operate well both in-person and digitally. Urban FIs should consider optimizing an “omnichannel” experience, meaning an FI’s digital and branch experiences should reflect one another.

All of these channels should work well with each other so a client can start and complete transactions independently and/or with staff’s assistance. It becomes important that all of you integrate your technologies into the same system and that they have access to the same information to provide less friction for conducting business.

Best Solutions To Implement In These Markets

When considering rural areas, advanced technology might not be the first thing that comes to mind, but FIs in rural markets can greatly benefit from implementing new technology. FIs in areas with a large population of farmers and labor workers should consider expanding their hours of operation to accommodate busy work schedules and give clients freedom to handle finances outside of traditional business hours. These markets also tend to be very cash heavy and experience higher peaks of volume based on laborer banking.

Allowing remote and mobile deposit captures will also offer the client more convenient means with which to handle their transactions. Rural markets tend to handle many cash transactions, so retail cash capture programs could be essential for this client base and reduce the strain on branches to have to process the cash in-house.

Urban FIs will likely operate best with high levels of automation. As branches in these areas tend to handle high transaction volumes, automation solutions can easily handle the majority of mundane transactions, freeing up staff’s time to work with the clients through meaningful interactions. Specifically, TCRs are a reliable way to automate tellers’ work and increase security in an FI’s branches.

Self-servicing machines can handle transactions quickly and give clients choices in how they handle their transactions and also allow for staff to assist if needed for a more complex need.

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About Sean Farrell

Sean has been in the business since 2003 and always aims to be an expert on whatever solutions QDS is providing. Sean has grown into a thought leader in the space through research and company growth. Sean holds strongly to his Christian faith and uses those principles to guide the business.