I was talking with some friends and realized suddenly that we hadn’t talked about bank branches or branch automation for a long time. In fact (and this was the dawning), we haven’t talked about ‘branch of the future’ for a long time.
Branch of the future – it’s almost laughable writing that down today, yet a few years ago everyone was talking about branch of the future. Most vendors – particularly those who provide branch automation – were showcasing branch-of-the-future systems, prototypes and demonstration rooms. This led to lots of banks experimenting with technology and shelling out megabucks to launch their flagship branches of the future. In some ways, it became a sign of how innovative the bank was, and for some, not having a branch of the future was a sign of lack of leadership. You just had to have one. For example, just four years ago, Barclays launched a ‘branch of the future’ in Piccadilly Circus:
Three years ago, Sberbank spent millions on a new branch of the future showcased in Moscow:
This followed various other branch-of-the-future projects from Citibank, among others.
So for a while (in fact, for most of the last decade), I would regularly come across branch-of-the-future projects. Then it was replaced with another discussion about ‘what future for branches?’. That discussion began a decade ago too, but was loudly pooh-poohed by most. I don’t really want to get into the do we or don’t we need branches discussion, because we’ve had that one too often, but I do find it interesting that the branch of the future is no longer being discussed.
On Googling ‘branch of the future’ and looking at the most recent results, there are still some branch-of-the-future projects going on out there. For example, PNC in the US just launched a branch of the future, while mainstream US is talking about millennials leaving bank branches for apps:
Banks don’t believe the branch is fading, but they do believe it needs reinventing; its role in the mix is still important. Whatever agent provocateurs say, branches are not dead. In fact, various surveys show that millennials still say the No 1 criteria for bank selection is a nearby branch, with their second biggest influence being a recommendation from friends or family.
So if there’s going to still be a branch in the future, why have we stopped talking about the branch of the future? Perhaps some people haven’t. For example, Lloyds in the UK recently announced large-scale branch closures while at the same time talked about large-scale branch openings. What’s going on? It’s all part of the revamp of the physical bank branch experience. Gone are the queues, tellers and glass partitions between the customers and the customer service agents, and in are the open floors with bright lights, soft music and coffee smells.
I agree with some of these themes, but the biggest theme for me is to realize that ‘branch’ isn’t a sales center, an advisory center or a transaction center. It’s none of these. Branches were transaction centers for cheque and cash processing, but as paper deposits disappear to digital transactions, the need for a transaction center is diminished. Branches are often discussed in branch-of-the-future projects as being sales and advisory centers, but this assumes customers want to be sold to, and more importantly how can you give me advice that I trust when you’re selling to me?
No, branches are none of these things in the future. What a bank must realize is that they will have redesigned their entire organization to sit on the internet. All access to information is through APIs, apps and analytics, and customers are demanding as much access to these information services as frontline personnel. This means that when customers meet frontline staff, they are as informed as the employee. What do they want from the employee?, from the physical interaction?, from the future branch experience?
My contention is that the humans, buildings and stores are sitting on top of a consistent digital infrastructure where customers are as informed as staff, so what they want when they have a future physical experience is a reassurance of trust that isn’t sales or advice, but a feeling that they are treasured and wanted. It’s a reassurance that their investments are safe and that the bank can be met in a face-to-face situation to ensure that it’s safe, along with other key comfort factors. For example, in a worthwhile read from Manish Grover, there are several key areas to considering how the branch fits into the future structure of the bank, including:
- investing in the customer first
- placing the customer at the center of the bank’s ecosystem
- building the right customer experience, with digital at the core
- connecting branches tightly with digital experiences
- transforming branches into community centers.
These are all well illustrated by this walk around the launch of the Virgin Money lounges:
So the branch isn’t dead, and the future branch is reinventing the physical customer experience to provide reassurance and consistency with their user experience online.
– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. You can read the original article here. Main image: ‘Virgin Money Manchester Lounge‘ by VirginMoney from United Kingdom – Virgin Money Manchester Lounge. Licensed under CC BY 2.0 via Commons.