By Richard Broadbent, General Manager, Banking, Wincor Nixdorf UK/I
When I started my working life in a city centre branch in the early 90’s, the branch staff intimately knew the life stories of virtually everyone who walked through the door. It seems quite strange with the advancement in technology and subsequent availability of data, that over the intervening 20 years or so, that my bank (and I am sure I am not unique here), seems to know less about its customers than ever before.
Given this, it is really surprising that research undertaken more than two years’ shows that in excess of 40% of UK banking customers want to return to old fashioned banking with a personalised service. This desire for your bank to ‘know you’ is putting bricks and mortar branches right back at the heart of branch strategy.
Financial institutions still appear encumbered with complex legacy systems that make it hard for them to create a truly intimate experience for customers, but this should not stop banks striving to achieve this as they look to transform their branch networks. So, what are the key things that banks need to consider to not only improve the in-branch experience now, but plan for three, five and even 10 years’ time?
The many faces of transformation
The first thing to acknowledge is that transformation means different things to different people. For some, transformation is all about the economic viability of the channel, for others it’s about creating a new and unique customer experience. Either way, the explosive adoption of digital banking coupled with the desire for a personalised in-branch service is driving the need for banks to create fully integrated, cross-channel services that enable seamless customer journeys regardless of the channel used.
Banks have begun this integration process, for example by automating routine tasks and services in-branch and by adopting mobile phone capability such as NFC and QR codes to improve cross channel experience. Making best use of self-service capability is driving more efficient branch processes and provides the opportunity for staff to focus on providing a higher level of consultation and personalised services to customers.
However for many financial institutions, a combination of factors drives branch transformation plans. Most will aim to improve efficiency in-branch, using technology to enhance operational processes and improve both staff and cash journeys. Alongside this delivering a new, more effective customer experience is also vital, ensuring customers receive the services they want in a fast, efficient and intuitive way.
This may mean that the traditional branch network is adapted to offer different services in different locations in order to best match the needs of the customer. For example, a pop-up branch in a retail location can offer a truly convenient service, allowing customers to complete a variety of transactions in one place, assisted by video tellers where appropriate to maintain the vital human touch. For flag ship branches the focus is more likely to be placed on sales and service, providing customers with one-to-one advice alongside convenient self-service technology.
Faced with the challenge of accommodating the needs of a variety of customers with different demands, it is clear that financial institutions need to make better use of the customer data that is available to them.
In-branch, this data can be leveraged to replicate the coveted ‘old fashion’ personalised service through self-service technology. ATMs and other self-service devices are fully capable of using customer data and preferences to create unique personalised services for customers, displaying for example, personalised home pages and targeted content, along with more routine elements such as transaction preferences. Similarly in-branch staff should have access to relevant and timely information about the customers they are serving via a roaming service device such as a tablet computer.
The branch of the future
Given that our historically low interest rates look set to continue for the time being, banks are being driven to differentiate more and more through customer experience. Digital has been and will continue to be a driving force in that regard, particularly for new and emerging brands, but ubiquity of service can make differentiation harder to achieve and even harder to sustain. The branch however, provides a real opportunity for change.
So, what will retail banks look like over the coming years? In the shorter term, financial institutions will continue to lay the grounds for their branch transformation plans, with a clear focus on securing long term loyalty by delivering exemplary customer experiences. With a new look and feel that takes the best from retail and banking combined, we expect banks to trial new services, invest in new technology and become more flexible in their operational approach.
Self-service will continue to remain a key theme as financial institutions consider how to streamline services in order to not only provide convenience for the customer, but also deliver long overdue process efficiencies. Alongside this the competitive landscape within banking will continue to thrive, driving change within the industry and forcing organisations to evolve at a pace not seen before.
Branch transformation is by no means a new concept but many organisations have yet to implement their full rollout plans for change. After plentiful discussion and planning, the next 12 to 24 months will start to see a move towards implementation. We are likely to see a clear shift in many customer and cash journeys throughout the industry, with the benefits of branch transformation starting to flow through to customers and financial institutions alike.
How will the industry look beyond this? The truth is it’s difficult to predict given the rate of transformation we are currently seeing. However the demands by consumers for choice, convenience and personalisation looks set to continue which, along with improving operational efficiency, will dictate the future investment plans of the industry. The important thing for today’s financial institutions is to ensure that they make best use of the tools at their disposal and futureproof technology to enable the changes that are an inevitable part of the continued evolution of banking transformation.
 Harris Interactive – April and May 2014; 2,000 Respondents; 18 years and older