The Bank Branch of the Future?

DPA Insights

It’s a Work in Progress

By Steve Mueller, Director of Commercial Operations

“The reports of my death have been greatly exaggerated.” ― Mark Twain
“Most of our assumptions have outlived their uselessness.” ― Marshall McLuhan

Remember a few years back when the banking industry was convinced that technological advances meant the end of the brick-and-mortar branch?

While it’s true that the ratio of branches-to-population appears to have plateaued in the US, experts such as McKinsey, FDIC and Celent predict that the branch channel will likely remain a fixture in our financial landscape. Why? Branches are still where virtually all of the selling takes place. According to a recent Celent survey, improving sales results is the number one strategic priority overall for financial institutions.The Bank Branch of the Future? It’s a work in progress.

The Branch of the Future

According to recent trend reports, the branch of the future will be smaller, more efficient and more automated. With fewer staff overall, Universal Bankers will handle everything from transactions and new accounts to loans and mortgages. The branch of the future will be designed for longer but less frequent customer visits.

While this future-style branch won’t appear overnight (because a lot depends on customer demographics, the competition and the economy), changes are a-comin’.

Here in Connecticut, the Hartford Business Journal reports that even smaller banks are rapidly connecting with customers through as many digital and mobile channels as they can.

Getting There from Here

The branch is not dead, but it does have a bad flu. Customer traffic is down. Transaction volume is down. Check writing volume is down. Yet labor costs and operating costs continue to rise. Something’s gotta give.

Self-service technology, cash recycling, teller capture and mobile banking are spreading fast. However, it is imperative that these new remote service technologies be well conceived, intuitively designed,  thoroughly tested and backed up by live customer service so they give customers a reason to remain loyal customers whether they frequent the branch or not.

Financial blogger Chris Skinner points to Apple’s overwhelming success at designing a retail environment that has moved beyond selling products or providing services to building a sense of community around their brand.

Unfortunately, today’s brick-and-mortar bank is designed to protect hard currency, not foster shared experiences. But in the new world of remote banking there is virtually no cash to protect. The shared sense of community that Apple stores have achieved is what Skinner suggests banks need to create.

Banking’s Challenge

How can banks make their branches both more efficient at providing service and more effective at generating sales? Will a new generation of bank branches emerge to serve a generation that engages through apps and social media on laptops, tablets and smart phones?

What’s YOUR Vision?

Many banks have already begun the journey to make the branch of the future their branch of right now. How do you think this working out so far? How should banks tackle the challenge of increasing sales in a brick-and-mortar environment? How should they modify their branch’s design, layout, flow, staffing and services to create an interactive sense of community? We welcome your insights, stories and opinions in the comments box below.

Daniel Penn Associates Director of Commercial Operations Steve Mueller provides adept analysis of work and information flow, assesses management and work procedures and develops staffing and resource models for corporations, financial institutions and health care organizations.

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