I was talking with some friends and realised suddenly that we had not talked about 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, and yet a few years ago everyone was talking 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 branch 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 a 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.
Here it is:
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 amongst 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 – we have 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 USA just launched a branch of the future whilst mainstream USA is talking about millennials leaving bank branches for apps:
Banks do not believe the branch is fading, but that it needs to be reinvented. Its role in the mix is still important. Whatever agent provocateurs say, branches are not dead. In fact, various surveys show that millennials still choose the number one criteria for bank selection is a branch nearby, with their second biggest influence being recommendation by friend or family.
So if there is going to still be a branch in the future, why have we stopped talking about the branch of the future. Well maybe some haven’t. For example, Lloyds in the UK recently announced large-scale branch closures whilst, at the same time, talking 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 is not a sales centre, an advisory centre or a transaction centre. It is none of these. Branches were transaction centres for cheque and cash processing, but as paper deposits disappear to digital transactions the need for a transaction centre is diminished. Branches are often discussed in branch of the future projects as being sales and advisory centres, but that 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 realise is that they will have redesigned their entire organisation 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 the front line personnel. This means that when customers meet front line staff, they are as informed as the employee. So 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 is not sales or advice, but a feeling that they are treasured and wanted. It is a reassurance that their investments are safe and that the bank can be met in a face-to-face situation to ensure that it is 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 centre of the bank’s ecosystem;
- Building the right customer experience, with digital at the core;
- Connecting branches tightly with digital experiences; and
- Transforming branches into community centres.
These are all well illustrated by this walk around the launch of the Virgin Money lounges:
So the branch is not dead and the future branch is reinventing the physical customer experience to provide reassurance and consistency with their user experience online.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...