The Bold War

Let’s Get Physical

Visiting some places can give you the unique feeling of taking a step back in time. The grand architecture and artistry of Rome allows any visitor to immediately immerse themselves in the most powerful empire of modern history. In Havana, you can be transported back to 1950s Americana quicker than you can say ‘vintage Chevrolet’. I now get the same feeling when I walk into my local bank branch. Everything from the staff, processes, technology and even the decor are from a bygone era. Branches can no longer be treated as a factory for executing financial transactions. As retailers struggle to keep their high street stores open, branches will need to adapt or face the same sad fate.

When branches were first opened they had a clear purpose. They were the only way you could access a banks services. They were large, prestigious and furnished immaculately to reflect their secure stature. Over the 20th century branch numbers expanded rapidly to cater for a growing population and workforce. Over the same period the general population got busy being busy. New technology arrived and this resulted in a variety of options being available to consumers. The introduction of ATM’s, EFTPOS and the rapid rise of digital and mobile banking has resulted in a large gap between the original purpose of the branch and the modern needs of consumers. Joe Public now has less time (and less desire) to conduct financial transactions in person. More importantly they also have more convenient alternatives.

The role of the branch needs to change significantly to reflect this movement in consumer behaviour. Branches should no longer be treated as the shop front for branch services only. The branch needs to become a window for the services of the entire bank. As transactions continue to move to online channels, the branch needs to become less about execution and more about communication. Moving from an execution channel to a communication channel is complicated. Everything in a branch today is geared towards transactions. When you enter the branch you are not greeted, but forced to take a spot on the factory conveyer belt. If you need to inquire about a transaction, you need to contact the call centre from the branch, because this is what the layout and process dictates.

To move away from this ‘factory banking’ mentality, banks will need to conduct a complete cultural overhaul. Banks will need to start recruiting a new type of branch staff. New staff will need to be confident and able to create dialog with customers. With a need to proactively engage customers, rather than reactively execute, some staff will be caught out. Employees that only are only interested in branch services will get lost in the blur between the digital and physical bank environment. Banks will need to downsize their branch portfolio, and then re-hire, and re-train their branch workforce to drive forward this cultural shift. Whilst branches will continue to execute transactions for customers that prefer a more personal experience, communication needs to be at the core of the new service.

For the banks that have the boldness to change, new and exciting opportunities will open up for them. They can now transform more broadly to become a local community communication hub. They can assist in establishing new ventures, supporting small businesses and improving the financial literacy of their community. Education seminars can be run on the financial topics of the day and to demystify important economic trends. Seminars could range from top mortgage tips, to an overview of negative gearing. Start-ups could receive special assistance in developing business cases and seeking investment. New technology will also drive forward a new experience in the branch. Collaboration tools that facilitate networking and access to shared space should become mandatory. Free Wi-Fi, touch screen displays and tablets could all be provided to add to the new set up. These new customer journeys and technologies could also lead to fresh revenue streams for the bank.

For the banks that don’t adapt, traditional and non-traditional competitors will continue to impact. Once a customer’s transactions are all conducted via alternative channels, they will rarely have the need to visit a branch. This reduction in foot traffic will lead to most bank branches looking like ghost towns unless they evolve and offer alternative services. If banks don’t move to this new model to counter the reduction in branch volumes, they might as well pack up their branches and implement a mobile sales force. It is important that a branch serves a purpose beyond being the banking choice of pensioners. It will need to differentiate itself now or risk being swallowed up in the future.


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