Branch Transformation: The Age of Information

Trying to predict what the bank of the future will look like is an almost impossible task as there is no definitive single answer. What can be said with some degree of certainty is that there is a revolution taking place within financial services.

The expectation of customers are rapidly changing as a result of technology; this naturally is now having an impact on the future role and function of retail bank branches. How banks address these points will vary and will depend largely on their own unique history and DNA. Factors under their consideration will include socioeconomic segment(s), and geographical and cultural locations. The forthcoming changes will require the integration of the bank’s customer interaction model across different channels, to ensure a smooth and coherent user experience in all customer segments.

All evidence points to the fact that the decline of ‘traditional’ bricks and mortar banks has been accelerated by the rise of digital banking in the UK and across the globe. More customers are choosing to bank online or use a mobile app rather than visit high street branches. The fall in absolute numbers has in some instances been as much as 50%. Forecasts for the next 5 years indicate that this decrease in branch visits will continue.

In its 2016 case study, BT Global Services revealed the following:

• Up to 45% of customers ‘expect’ to have an in-branch wait for banking services and advice. 81% believe free wifi access would benefit their experience and 75% expressed positive interest toward online appointment booking

• Customers favoured instant gratification services with 84% positively responding to branches that offered immediate issue of new debit and credit cards. Similarly, 67% would prefer to remotely deposit cheques than use postal or in branch services

• Assisted self-service channels satisfy the customer desire to operate independently and to interact for advice and support when needed. 51% would like more staff who can advise on products and 69% would be more confident if that advice was also accessible through human interaction on the website. Tablet access to jointly research products with branch staff would appeal to 63% 

In light of these statistics, there is little doubt that the ‘branch’ is here to stay for the foreseeable future. The challenge facing banks will be in how they design and develop an effective strategy (use cases) for new branch models. These will require a detailed analysis of the three pillars underpinning the branch: accessibility, interaction and space.

The impact of the changes must be analysed and monitored in order to make the appropriate adjustments that will enable financial institutions to adopt the new model quickly and smoothly; even the most gradual changes can sometimes lead to Application Design errors that require adjustment. The four key indicators that should be measured during these changes would be:

• Counting: measures traffic in the general environs of the branch (clients walking past the branch, entering the branch, executing transactions,)
• Performance: measures transactions compared with traffic
• Feedback: measure client satisfaction after visiting the branch
• Health: measure the accessibility of the branch, either with respect to human resources or technical devices

The process of branch adaption means the physical appearance of bank branches will most likely change considerably, both in terms of their Application Design and the ways in which customers are served. Branches will not be disappearing as there is clear evidence that points to the continued desire across all customer segments for face to face human interaction.

What should change is the idea of what a branch should be and can do. At the heart of this change is the redefined customer experience enabled by evolved technology and informed by the relentless drive for applied customer data. In short, taking its guiding principles of frictionless convenience and transplanting them back to the physical world.