Don’t Let Branches Wither on the Vine – Why Innovation Begins at Home

Don’t Let Branches Wither on the Vine – Why Innovation Begins at Home

Andrew Crowson

Managing Director at Cummins Allison

Views 761

Don’t Let Branches Wither on the Vine – Why Innovation Begins at Home

08.06.2017 06:45 am

Facing an increasingly competitive future, banks have been told time and time again of the need for innovation. Indeed, PwC’s 2016 “Retail Banking 2020: the future of the retail banking industry” report asserted that innovation would be the single most important factor driving sustainable top- and bottom-line growth in banking over the next five years. However, understanding the need for innovation is one thing: ensuring that it happens in the right places is another. Recently, much has been made of how technology is leading a digital revolution in banking, with innovation focused on mobile banking and new online services. But is this the whole story?

White heat of technology

There is no doubt that the online sphere has made significant advances in recent years. From the ability to review their balance online, customers can now access a huge number of banking services either from their laptops or mobile apps. We have also seen the rapid growth of online- and mobile-only challenger banks, whose numbers are likely to swell further when the UK’s Open Banking Revolution comes into effect in 2018.

Beyond the services themselves, there is also innovation in how banks use technology. With more online interactions with their customers, banks can amass vast quantities of data: which can then be analysed and used to improve services. For instance, by offering more of the services that customers favour, and personalizing their services so that customers will see information and offers that are most of interest to them.

Yet despite these advances, banks’ reputation for innovation is still stalled. Efma and Infosys Finacle’s October 2016  “Innovation in retail banking: The emergence of new banking business models” study showed that, while a majority (69%) of respondents believed banks are becoming more innovative, only a quarter rated their innovation performance as high. In order to counter this, banks must ensure that they are demonstrating innovation across the board. In particular, they need to focus on bank branches, which all too often are left to wither on the vine.

Home sweet home

While online banking might take precedence for consumers’ everyday needs, the fact remains that the local bank branch still performs a vital service for many customers. This doesn’t only include those customers who, for whatever reason, are unwilling to switch from banking in person to via a screen. There are still services that either cannot be completed online, or that are much more pleasant and effective to do face-to-face. For instance, paying in cash or cheques is still a need for many consumers, while anyone looking to arrange a mortgage, a sizeable loan or a pension will be much happier with an in-depth conversation with an accredited expert.

If banks ignore innovation at the branch level, then those branches will continue to fade away until they are just a memory, and many important aspects of banks’ services will be lost. Yet by pursuing innovation, banks can turn them into a home not only for current customers, but for future generations who will value the level of service that the local branch can provide.

Taking action

Broadly speaking, innovation in branches can be divided into two: the services on offer, and how those services are offered. If a bank offers specific services online, there should also be a way to access those services in branch, and vice versa. Essentially, a bank shouldn’t be splitting its customers into first- and second-class citizens – deciding whether to bank in person or online should be a matter of convenience instead of a stark either-or choice. Similarly, it should be simple to use online services to begin processes that may have to be completed in-branch, such as setting up meetings to discuss mortgages or life insurance.

Innovation should also focus on making in-branch services as smooth and painless for customers as possible. After all, one of the main attractions of online banking is its immediacy. If something as simple as making a deposit at a bank is a time-consuming process involving long queues, complex forms and endless questions, then consumers will stay away until they have no other choice. Instead, branches should automate as many processes as possible so that, for instance, depositing cash can be done quickly, efficiently and accurately without the need to take minutes or hours out of the day.

This not only provides a better customer experience, thanks to reduced wait times and more face-time with staff for those enquiries that demand it. It also frees up the bank’s own staff to deal with higher value-added activities such as cross-selling or working with new clients, with an ultimately positive effect on profitability and sales.

Choose your friends

Once a bank understands how innovation can change the in-branch experience, it can choose the right technology partners to support its ambitions.  Naturally, the organisation will be careful in its choice of vendor, considering matters such as cost, support and whether technology will allow it to maintain all of its compliance obligations. At the same time, it is important to consider the relationship with technology providers. For instance, a good technology partner will allow the bank to share feedback from customers and users, and ensure that its products and services are being designed and updated to support the bank’s and its customers’ needs. A poor one will argue that its responsibilities end with the product and the associated support contract.

Just as technology is making it easier than ever for customers to compare rates and features of different banks and simplify the process of transferring accounts, new or refined technology can go a long way toward helping branches remain relevant in the eyes of customers. As banks rethink their branch strategy, technology investment should be a critical part of the decision-making process.


Latest blogs

Simon Black Awaken Intelligence

Boom or Bust: How the Financial Services Sector is Coping

Covid-19 has had an impact across all industries and businesses are feeling the sting. However, is it equally devastating within every sector? As industry and individual concerns grow during the inevitable economic crisis, financial services are Read more »

n/a n/a

Tips on How to Successfully Trade CFDs

A CFD or contract for difference is a financial product that allows a trader to speculate on asset classed without owning a portion of the underlying asset. A CFD trade is not an investment but high-risk speculation that carries the risk of losing Read more »

Patrick McKinney and Joe Fuchs Wolters Kluwer Finance, Risk & Regulatory Reporting

Building an Integrated Data Management System: A Guide for Digital Banks

Digital banks and other FinTechs are emerging as more nimble competitors to established legacy banks. The digital banks that are on their way to becoming fully chartered have the opportunity to setup fully automated processes and systems without Read more »

n/a n/a

How COVID-19 Is Ushering In a New Era of Cashless Technology

  Image source:   Cashless technology isn't a completely fresh concept. People have been using credit cards for decades, and the market for fintech services has been Read more »

Jean Shin tyntec

Using WhatsApp for 2FA is the Future of Banking

From user authentication and password resets to transaction verification, two-factor authentication (2FA) offers basic but useful protection for consumers. The 2FA process typically sends an SMS sent to the customer with a one-time password (OTP). Read more »

Related Blogs

Rachael Gore Insurance Nexus

Innovation Beyond The Lab: How To Drive Company-Wide Change That Guarantees To Impact The Core Business (Webinar)

Reports are mounting of a widespread epidemic afflicting insurance companies worldwide. Symptoms include fledgling pilots, corporate inertia, and in the worst cases, a never-ending trajectory of business as usual. If you are experiencing any of the Read more »

Andrew Fray Interxion

A History of Transformation: Accelerating Innovation

In 2006, at a conference in San Jose, Google CEO Eric Schmidt marked the beginning of a new era with some prophetic words: “there is an emergent new model… I don’t think people have really understood how big this opportunity really is. It starts Read more »

Milos Dunjic TD Bank Group

Enabling the Pay-Per-Use Model

There is a fierce debate out there, about what’s better – subscription or pay-per-use/view model of services? Digital content providers, telcos and TV broadcasters mainly prefer subscription or licensing model as it allows them to better predict Read more »

Jürg Truniger Appway

The Future of Banking: Adopting Innovative Technology

In today’s world, nearly all financial institutions are in some stage of digital transformation. Technology, which has always been a part of every industry, also plays a big part in the banking industry’s ongoing digital transformation. When we look Read more »

Will Humphrey PSONA – part of the Communisis group

Virtual Reality and Augmented Reality: Form vs Function?

With technology rapidly evolving, different sectors are interested in understanding just what tech can do for them. Take Virtual Reality and Augmented Reality; as more and more VR headsets are sold worldwide – BI Business Intelligence predicts sales Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel