Branch transformation: Optimizing customer experiences

Closing, rationalising and redistributing branch estates is a standard feature of retail banking strategy now. The cost of bricks and mortar operations is high, staff need constant remote or on site management to perform, and consumers are now highly unpredictable in their choice of delivery channels, given the increasing capability of digital channels.

Deloittes showed US banks shutting 1500 branches in 2014, and this is a growing trend, however Cap Gemini 2015 & McKinsey’s 2014 research shows that the branch experience remains the most crucial method to succeeding at profitable sales and relationship building, across all demographics, and all products.

A recent Accenture study revealed 78 per cent of US consumers believe they will maintain or increase their number of branch visits over the next five years. Furthermore, 43 per cent of people claimed they would simply switch to another local branch if their existing one closed. However, is it fair to say that banks must maintain a physical presence on the street? Or rather – do they need to acknowledge that their customers buy from highly knowledgeable, trained staff – and that a ‘differentiated consumer experience’ is much more than comfy couches, cool looking art and the growing list of hi-tech in-store “toys”?

Financial institutions need to go beyond the glamour, and see that if they can deliver the face to face, knowledgeable staff experience to their consumers when, where and how they want – this is what it takes to bring the branch proposition into the 21st century, meet their customer’s constantly evolving demands and crucially, deliver revenue growth. FI’s must therefore embark on Branch Channel Transformation, which allows them to efficiently deliver staff to customers virtually where needed, but armed with the technology to execute meaningfully at that point of contact – otherwise we may just as well continue to use the call centre for the next 100 years, and return to the ‘home visit reps’ of the past.

Reinvigorating the branch Channel

According to Accenture, effective transformation strategies can reduce the cost of building and operating a branch by 33 and 25 per cent, respectively. However, retail bankers deeply involved in day to day branch operations, can see the same results from excellent staff and asset management, so what are the crucial elements in a successful transformation project? Here are some of the considerations that businesses should take into account.

Creating Agile Branches: FIs have increasingly excellent data collection, analytics, and prediction capability to inform them on where to distribute their branches, how to staff them, and kind of service, transaction and sales experience to offer where they can derive the best staff cost: sales revenue ratios. The speed at which consumers move and change their channel preferences though needs more integrated thinking than this – there is only so much business that can be done with bricks and mortar, as the explosion in call centres taught us many decades ago now….

Mapping Consumer Journeys: A broader understanding of the ways in which customers interact with banking services is also important. Individuals may begin researching for a product on their desktop computer, switch to a mobile while they’re on the move and then visit a branch to ask advice. All good right? No. this is the perfect world where the branch ‘experience’ opens 9—5, and the customer faithfully attends within the ‘bank’s hours’. Predicting the mix of channels needed to make the customer go from ‘impulse’ to ‘action’ means taking the banker out of this comfort zone, and finding ways to deliver person to person interaction on any device, that the customer needs to use – after all, it’s their valuable business that the FI is chasing, not the other way round…

Advanced customer engagement platforms: Moving towards more self-service technologies in branch and off site brings considerable advantages in the efficient operation, of consumer friendly transaction service offers. However, their propagation is what has disenfranchised many customers and created loyalty gaps in established banking relationships. Assisted Service software technology is reversing this trend and taking branch banking omnichannel, through video driven, remote control equipped ATMs, Kiosks, tablets, and mobiles, enabling consumers to use the 24/7 anywhere benefits of self service, but allowing the FI to efficiently deliver a member of staff to the customer when they need them, and remote control the endpoint to deliver what the customer would get if they were physically face to face with their banker.

Silo reduction: One of the biggest impediments to bank transformation are departmental silos. Each channel often has different internal processes, legacy systems and data management infrastructures, bringing significant challenges when FIs need to build a comprehensive omnichannel approach.

Train and develop staff: Employees need the qualifications, skills and confidence to deliver the FI’s new vision to customers, on whatever channel and technology they use to do that going forward.

Banks clearly have several obstacles to overcome when trying to optimize their branch proposition. Consumers want anywhere, anytime services, and FIs need to leverage the latest technology and omnichannel strategies to deliver on these demands.

In short? Branch banking hasn’t changed – it is still about making the best use of assets, to enable staff do what they have always been managed to do – interact with, secure loyalty from and sell to, customers. And technology is making it easier than ever to do that.

Written by Martin Shires

Martin Shires is a global evangelist for branch transformation strategy, based out of NCR’s R&D center in Dundee, UK. Martin has held a number of senior regional management roles in European retail banking.

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