Future of the Branch: Re-inventing Branches

 Inviting, Innovative and Inspiring

Despite the growing preference for digital banking channels, branch banking is far from obsolete, with banks worldwide endeavouring to re-invent the branch experience to increase appeal and convenience for customers. Mindful of the value of digital engagement and the declining need for conventional branches, Polish mBank opted to combine digital marketing techniques with the familiarity of branch banking by opening smaller Light Branches, situated in areas yielding high foot traffic such as shopping malls. Rather than adjusting oversized branches or abandoning them completely, the new Light Branches take advantage of mBank’s online and mobile banking products, permitting the bank to both improve efficiency and scope of the sales network and to fulfil the expectations of the growing number of digital consumers. This overhaul of their branch network includes operating 40 Light Branches by 2018, 80 larger Advisory Centres housed in office buildings focused on advisory, cross-selling and business banking support while still making use of recent technologies including remote digital support, and 60 manned mall mKiosks designed for both private and corporate customers to make use of further bank offerings such as acquiring a loan, credit or debit card.

The key concept of the Light Branches is to use innovative digital engagement to attract customers to the quick and easy methods of opening new accounts, receiving a loan and cash handling to name a few, available both in branch and online.  The branch entrance features an interactive screen utilising Kinect technology, able to present discount offers to customers as they approach the screen. Inside, a touchscreen video wall makes browsing the banks products simple and engaging, further streamlined to the customer by video-camera age and gender identification offering targeted mDiscounts. Customer service stands dispersed throughout the branch featuring tablets allow customers to engage in key banking services. mBank has also deployed a central management system for the project, with all devices and interactive activities united on a single local network. This amalgamation of traditional branch banking with recent technology innovation presents a forward thinking attitude to branch banking sure to slow the process of branches becoming obsolete, as well as the importance of a centralised rather than siloed system, and has seen much success.  Just six months after opening, Light Branches were found to outperform traditional offices in sales, attain 200 visitors a day and increase efficiency while lowering floor space costs.  

The importance of integrating branch banking with digital services has also been acknowledged by digital banks, most notably Italy’s Chebanca!. Despite having begun as a digital-only bank, Chebanca! now operates 50 branches, in order to greater establish a sense of trust, branding and service that digital-only banks are not always capable of achieving. However, Chebanca!’s branches are far from traditional, with their self-service machines and appointment-only advice stations seemingly the only aspects found in a traditional bank branch. Though Chebanca! branches do feature teller stations to discuss opening accounts and other services, the staff pride themselves on not being bankers but experienced retail workers heavily focused on customer satisfaction. These branches also operate video stations, essentially advice stations that require no appointment, able to connect customers with video operators on large screens and make use of biometric recognition. These branches have been greatly beneficial for the bank, with the video stations alone enhancing customer relationships and increasing cross-sell and up-sell success rates. In areas featuring a branch, asset holdings are 2.5 times higher than in unbranched areas, 45% of new customers each month come from the branch, and 37% of all Chebanca! customers make use of the branches. This illustrates that there is still demand and value in branch banking, when tailored to reflect the needs and concerns of the customer.

Canadian bank Tangerine also sees the value in alternative branch banking, with its “Café” approach to branches featuring self-service kiosks, a coffee bar and children’s play area. The aim of such Cafés is to give customers of this largely online bank the opportunity to discuss their finances face-to-face, with associates who aid customers in learning to manage their money and accounts. Similar to the approach to branch banking held by Chebanca!, Tangerine’s “Café Associates” aren’t bank tellers, with no access to Client Files, while the Cafes themselves do not accept or carry cash. It is possible to access accounts online while in the Café using the iPads and computers while seeking help from the associates, and ABMs are available for deposits and withdrawals. The simplicity and breezy attitude of these branches aims to attract customers to an easy and mobile system of banking, with the branches seemingly acting primarily as means of gaining new customers rather than a key point of access for existing customers. This concept is also present in Tangerine’s Pop-Up Locations and mall Kiosks, offering a fast and easy way to open Tangerine accounts. While innovative technology such as scanning a driver’s license to fill out an account application form is key to the ease of access Tangerine presents, it’s unavoidable that the value of branch banking to attract new customers is still of great importance.

The role of non-traditional branch banking is also an intrinsic aspect of Vietnam’s first digital bank, Timo.  Timo, standing for “Time is Money”, aims to save its customers time and money by removing paperwork, queues, and the inconvenience of conventional branch banking. Timo’s sole branch operates in Ho Chi Minh City and is referred to as the “Timo Hangout”, where the primary aim is to encourage potential customers to open an account. However, the “hangout” operates more like a café than a bank, offering free wifi and complimentary drinks to potential members, as well as 50% off the bill for current Timo members. The hangout endeavours to showcase the bank’s different account and app options to customers, offering an introduction into the ease of online banking. The relaxed and casual setting targets Vietnam’s key demographic of millennials, in a country where the average age is just 30, aiming to sell a lifestyle rather than solely a superior product. Though Timo’s inability to operate purely online can be attributed to banking regulation in Vietnam requiring accounts to be opened in-branch, the informal, comfortable setting of a Timo hangout shows the importance of assurance and trust that can be best established face-to-face.

While Timo and Tangerine incorporate digital elements into their bank branches, operating with the primary aim of offering customers an easy way to open an account rather than encouraging repeat visits for banking support, The Bank of East Asia believes the branch to still be a valuable channel for regular visits from customers. Committing to offering an engaging and helpful branch experience, The Bank of East Asia focused on creating digital branches to offer a cohesive omni-channel experience while targeting the crucial demographic of young, tech-savvy customers. This wholly paperless branch system is brimming with innovative and engaging digitised banking services, including the touch-screen i-Counter that operates as a manned counter during the regular business hours, converting to i-Teller, BEA’s interactive service station, in the evening to connect customers with staff via video call to still enable the facilitation of transactions or loan applications. The digital branch also features the i-Window touch-screen system, showcasing information on investing products and offering easy electronic application for such products by incorporating electronic signatures and real-time audio recording, the i-Zone credit card self-application, and the i-Kit automatic form completion system dependant on OCR and digital signatures. These digital branches have reaped the benefits of operating as a smaller branch, such as a rapid branch renovation time and a reduced back-office area making them well suited to highly-trafficked mall locations. Their success in also rooted in their considerable customer appeal, with the digital branches seeing a 35% increase in deposits per customer and a 65% rise in mortgage drawdown compared to conventional BEA branches. Customer response to branch banking that feels modern and helpful is clear, illustrating how branches can continue to succeed and form a key part of the banking experience for the customer, simply by effectively targeting the needs and preferences of its customer base.