What is the future for Retail Branch Banking..?

As an ex branch & retail banker but also a colleague of Alan Goodrich in a previous life, I hate to say it but I, once again, find myself agreeing with an American, Michael regarding the future of branches!

Just because we have all new sorts of new technology and channels available or which will eventually become available to us, we must not forget that we are still human. We both have a need and enjoy meeting with others to discuss all sorts of things including our financial problems, questions and perhaps even innovative ideas. Some of this can be satisfied on the computer or mobile screen but it would be a sad world if these became the sole points of contact. Clearly we need a bank before we have all these tools and services but equally today we cannot envisage a bank existing or surviving without them. 

Banks are notoriously slow at being innovative but the message regarding the change from Retail Banking to Bank Retailing is starting to get through with the branch definitely still being the corner stone as Michael says or even maybe the centre. We have seen innovate products such as Richard Branson’s ‘one account’ , internet mortgages and deposits as well as, perhaps, securities and investment management facilitation but there is still a long way to go to bring these services and products to the masses in the same way that they are currently available and cherished by private banking or wealth management clients.

Automation will play a big part in all this but so will the new branch when fully adapted in the same way as the music shops are adapting to the fact that you can buy or listen to their products  on the internet after you have gone home. Many banking products will become more seamlessly attached to other products such as finance and insurance for the purchase of a car, house or holiday (clients may even not be aware that there is a bank involved).  

One of the major functions of the branch will indeed be to educate and advise the masses as this cannot only be done online or within the confines of one’s home office. Those of us that are financially savvy forget what a strange world it can be to those who may not even be really interested or, for example, only know the bad side of being involved with a credit card as opposed to cash. I am thinking of the students in my family or my wife who prefers financial business to be handled by others!

Whilst only just touching on this subject, it is therefore my belief that although the branch will change completely from the empty, echoing banking hall I once knew in the 1970’s it is here to stay and may even make somewhat of a ‘come back’ as part the western worlds financial make up. Must go, as believe it or not, I have just been automatically sent a new cheque book – therein lies another story!!

As an ex online banker and current SME, Corporate banker I strongly support the idea of combination of banking channels. Online is still, hence the fuzz of web 2.0, one way communication channel and suitable for transactions (payments, transactions, loan agreements, funds, etc). Branches are better for consulting customers, if and only if all the employees have skills to advice.

After building one of the best online bank services for Nordic countries, I have seen for branches to become consultative units. Branches should give advices, teach, cross sell, and foremost LISTEN what customers are telling. Most of the new productive ideas comes from customers. As I have seen in brances, if you meet your customer only once a year for 15 minutes, you have a difficult task to sell all of your offerings at once. And when online banking is still on the web 1.0 phase, customers do not find new offerings, when they have bills to pay.  

Clive, glad to hear from you! Even if you choose to agree with an American ;-)

Michael, you seem to suggest that the future of retail branch banking is to move away from retail banking products and services to become; wealth managers, travel agents, estate agents, insurance brokers, etc... all of which already exist in abundance!

Anyway, have fun watching what investment bankers do to earn their crust at: http://www.youtube.com/watch?v=SJ_qK4g6ntM

Enjoy! :-)

 

I am pleased to have joined this network and to be in touch also Alan. Thanks for the link to the different ‘youtube’ videos - you see ‘Playmate’ there are always ways of attracting people down to the branch to discuss investments or whatever!! 

Seriously though, we know that many retail banks already have travel agent, estate agent & insurance broker arms but have so far (to their own admission) not been too great at integrating and selling such products. We must not forget that the first remit of a Retail Bank is to provide essential services to the masses so we should not try to turn them all into “wealth management centres” in my view.  

Clearly we are all in business for a profit but don’t let’s fall into the trap of the investment bankers in that other 'youtube' clip. Know your market and talk to your customers. Help them to fairly manage and grow their assets even from small and modest beginnings. Remember also that the money in this market is in the aggregate number of clients not the size of each individual’s wealth which is where Chris Skinners argument comes again to the forefront.  

We could never improve services, products and financial savvy for the masses without IT (specifically IP). The perpetual argument about who is running the show, who understands what or who should be up there first simply hinders progress. Openness, yes frankness but also diplomacy and compromise are the ways forward. It seems that many in IT have understood this and are improving programs through sharing and open architecture as well a general appreciation that the big bang is not necessarily the best method but more natural progression through SOA (specific Service Orientated Architecture).  

After all, whilst recognising that a little stress gets us all moving; does the human race always have to be in such a rush? Although it may frustrate some, a well considered evolving approach has always been the natural way ahead. 

Seasons Greetings to all.