But as Charlene Li, CEO of Altimeter Group points out in her book The Engaged Leader, while a handshake will never lose its value, it's no longer enough to sustain relationships in a fast-moving, digital world.
Marketers have to work out how banks, with their enormous expertise, can be part of a customer's trusted social network so they add real value and can engage with the customer as they are making decisions.
There are many opportunities to be part of these networks. KPMG says creating and delivering valuable content and a strong user experience will be vital to growing engagement and conversion.
Investing in search-engine optimisation, search-engine marketing and social media will become more important in driving discovery. Leveraging social media in creative ways could give a bank a real advantage.
Young customers want more information in order to be able to take a wise decision about what to do with their finances. About 65 per cent of them say they want financial education and assistance.
Another recent report by Accenture, the Digital Disruption of Banks , found similar themes in Canada, where digital, personalised financial advice integrates banks into the centre of customers' financial lives.
WHERE THEY ARE
The right kind of innovation can translate to success. North American retail bank TD Bank set up branded social sites to help consumers build financial literacy, positioning the bank as a trusted adviser and facilitator while letting their experts out from behind the wall. This helps them demonstrate transparent engagement and credibility by displaying the personal profiles of TD experts involved in answering questions.
That's the opportunity for banks: meeting customers where they are – not where you want them to be or where they used to be - and being part of their trusted networks offering the type of experience and advice they want in an open transparent way.
Morgan Stanley was heralded as an innovator when it encouraged 6,500 advisers to use pre-approved content to engage through social media with customers. It learned the hard way this does not work.
The pre-approved tweets received strong criticism for being packaged and inauthentic. Now the group knows its highly trained professional advisers can be trusted to work out how to write tweets that won't get its highly regulated bank in trouble.
There is opportunity for banks to respond to customer inquiries that come in via social channels and resolve issues and complaints in a way that can be public and positive for the brand and can facilitate a sales process.
A report from social analytics firm Simply Measured found dedicated customer-service Twitter handles increased 19 per cent from 2014 among the top 100 global brands. Of those, 43 per cent have a dedicated customer service handle, recognising that Twitter is a reliable way to address customer issues swiftly and effectively.
Social media is also a valuable way to garner insights for future product development to stay ahead of competitors that will be vital given half the respondents in the KPMG report expected technology giants and start-ups to spark innovation in the banking industry.
The biggest challenge for financial institutions is to get social media right. Entering people's social networks is a privilege and marketers should resist dressing up sales content in order to penetrate people's social media network.
A few large companies have experienced the wrath of the social world after enthusiastic staff sent the same content to the same influencers leading to spam complaints.
Financial institutions need to be careful how they advertise on social networks as the good citizens of the world understood the 'deal' on TV and radio: advertising pays for the free content they watch. In the social world, people are creating the content, so what's the deal with the ads interrupting the flow of conversation?
Many financial services companies have large dedicated teams working out how to get it right. Some companies (including ANZ) are building newsrooms in order to bring in content creation and distribution expertise as well as setting up content "Centres of Excellence" to ensure editorial best practice as they recognise serious storytelling is at the core of social engagement.
What do you think? Is it just the young who want digital and social banks? Do we want our banks to be better at providing advice? What else do you want from the bank of the future?
KPMG: Banking on the Future covered more than 1400 KPMG employees across Australia aged between 18 and 30.