The challenges facing retail banks today are multifaceted. Digital and mobile channels are driving changes in consumer behavior, enabling new forms of customer experience and interaction. Numerous fintech players with their innovative service platforms are also challenging banks by luring customers, especially so called ‘digital natives’, away from traditional bank channels. And the declining frequency of customer visits to branches as well as falling profit margins are putting pressure on branch network operations.
Still, banks are in an excellent competitive position; they have a large customer base, consumer trust and in-depth financial know-how. To protect and grow their customer base and keep costs under control, however, banks must create new cross-channel experiences with an integrated physical branch network and improve channel productivity through well-managed technology and processes.
- Three dimensions of change for branch networks
- Operational excellence for the branch network
- Branch Lifecycle Management
Connected channels and branches
Branch network transformation will continue to evolve. Banks have to pursue a ‘connected channel and branch’ strategy, which involves taking a bigger step towards automation and digitalization. The branch, self-service, online and mobile channels need to be brought together with the help of modern ICT service delivery, including virtualization, cloud computing and data analytics. Current customer and staff interactions in branches have to transform to digital processes-enabled interactions. Sales and marketing data should be interconnected so that banks can automatically follow up on customer requests regardless of the channel. By evaluating (big) data across channels, banks can use the information to increase customer dialogue, provide context marketing and develop further financial service products. This drives branch sales and leads to improved efficiency, such as reduced waiting times and more customer and staff satisfaction.
Being interconnected and fully managed, the branch of tomorrow becomes the strategic bridge between the bank’s physical and digital presence. It is taking shape today thanks to innovative retail banks that view physical presence as a valuable, differentiating asset in an increasingly digitized industry.
* VP Global Outsourcing and Managed Services and Head of Banking Software
** Business Development Manager, Wincor Nixdorf