Branch Transformation: Back to the Future - The Role of the Retail Banker

Every two years Bangor University in the UK hosts the George Rae Memorial Lecture. To many of you the name may not be familiar, but Rae was a best-selling author of his day.  He may not have reached the levels of Mark Twain’s ‘Adventures of Huckleberry Finn’ that year, but ‘The Country Banker’ required a second edition just a few weeks after its April 1885 publication.  Indeed, early copies are still in great demand and I regret that my own (bought in Hay on Wye many years ago) is a second edition and not a first.

What made it so popular?  Rae drew on his forty years of experience to demonstrate the principles of banking or, in his words, ‘to exhibit the machinery of banking in operation’.  To the modern day banker some of the topics will seem strangely familiar, as the book highlights such areas as ‘knowing the customer’, ‘prudent lending’, the need for ‘courteous civility’ in providing service and even, at the micro-level,  giving the customer a helping hand in dealing with complex forms.  Has retail banking really changed that much?  How relevant are Rae’s messages to modern day branch bankers and how does new technology enable them to apply these principles?  

Of course the world was different then and the branch was at the core of all customer relations.  The technology we now take for granted was in its infancy. In 1885 there were just 13,000 telephones in the UK and the first phone box was to appear a year later.  Meanwhile a ‘multiplying calculator’ had just entered mass production.  Of course they thought about technology and the future.  HG Wells, ten years later was to paint a less than optimistic portrait in ‘The Time Machine’.    

So what of branch strategy? It’s interesting to note that Rae saw opening a branch as a means of attracting and retaining business rather than short term profit.  Not that different from the ‘convenience’ argument that applies today. Consumers now have choice as to which banking channel to use – they are able to control how they interact with their bank.  How do you anticipate customer demand?  Investment in technology is critical but your people are just as important in ensuring the best in class service customers expect.    

In this context is the branch a thing of the past?  If not, what do customers expect from it?  In the UK there remain over 9,000 branches and recent research shows that three quarters of UK customers believe branches will still exist in 2025.  What they do expect is shorter queues, access to more experts and a more personalised service.  New technologies can help in all these respects.  In particular, accelerating cash interaction helps empower customer interaction.  In itself that’s not enough.  With the focus on customer service there are implications for recruitment and training.  What you need are highly skilled individuals imbued with basic banking principles.  

Any bids on a second edition George Rae?