Is Application Design the Key to the Future Branch Transformation?

Christian Ball, Head of Retail – Atlantic Region, GFT

The high street retail bank has been under threat for a number of years, but rather than disappear for good, the impact of digital transformation will continue to change the nature and business model of branch banking.

The branch banking model is on the cusp of change and banks will need to adapt by defining, developing and testing new use cases for their proposed new models. Each bank will define its own model dependent upon on various criteria such as: its DNA, target socioeconomic segment(s), and its geographical and cultural location. The change will affect the nature and function of the branch itself and will involve integrating the bank’s customer interaction model across channels to ensure a smooth and coherent user experience in all customer segments.

The growth in digital banking has accelerated the decline of ‘traditional’ bricks and mortar banks, as more customers choose to bank online rather than visit their bank branch. The numbers forecast for branch visits over next five years help support those claims that the physical branch is a ‘dead’ prospect. However, this assumption is being challenged. More evidence shows that the need for face-to-face customer engagement alongside a physical location to facilitate services remains important feature for customers.

In its 2016 case study, BT Global Services revealed the following:

• Up to 45% of customers ‘expect’ to have an in-branch wait for banking services and advice. 81% believe free wifi access would benefit their experience and 75% expressed positive interest toward online appointment booking.

• Customers favoured instant gratification services with 84% positively responding to branches that offered immediate issue of new debit and credit cards. Similarly, 67% would prefer to remotely deposit cheques than use postal or in branch services.

• Assisted self-service channels satisfy the customer desire to operate independently and to interact for advice and support when needed. 51% would like more staff who can advise on products and 69% would be more confident if that advice was also accessible through human interaction on the website. Tablet access to jointly research products with branch staff would appeal to 63%

In light of these statistics, there is little doubt that the ‘branch’ is here to stay for the foreseeable future. The challenge facing banks will be in how they design and develop an effective strategy (and use cases) for new branch models. These will require a detailed analysis of the three pillars underpinning the branch: accessibility, interaction and space.

The impact of these changes must be analysed and monitored to ensure the appropriate adjustments are made. These will enable financial institutions to adopt the new model quickly and efficiently; even the most gradual changes can sometimes lead to Application Design errors that require adjustment. The monitoring of these changes is supported by a new Branch Dashboard that will measure four different types of indicator:

• Counting: measure traffic in the general environs of the branch (clients walking past the branch, entering the branch, executing transactions)

• Performance: measure transactions compared with traffic

• Feedback: measure client satisfaction after visiting the branch

• Health: measure the accessibility of the branch, either with respect to human resources or technical devices

The process of branch adaptation means that it is highly likely that the physical appearance of bank branches will change considerably in terms of their design and the way in which customers are served. The role of the branch is changing but it would be a mistake to assume it is now redundant. The evidence available points to a desire across all segments for some human interaction and engagement. The key is in providing informed touch points efficiently and quickly in an environment that reflects customer expectations more in tune with an assisted sale and self-directed experience.

Customer experience is at the heart of future branch banking. The branch will be the channel used by financial institutions for all physical interactions with existing and future customers. Branches will continue to offer a personalised service to customers who request it but they will also equip customers with the ability to perform transactions themselves that were previously undertaken by bank employees.