Bank branch transformation is becoming increasingly important as smartphones and digital banking change how consumers interact with financial institutions. Activities that once required a visit to a physical location can increasingly be handled through mobile and online channels, forcing banks to reconsider the purpose of their branch networks.
Rather than disappearing, branches have an opportunity to evolve into locations that complement digital channels and provide services customers cannot easily obtain elsewhere. This requires financial institutions to integrate branches into a broader channel strategy while shifting their focus from routine transactions toward advice, sales, and financial wellness.
The constant change in how we go about our daily lives is constant, albeit incremental, mostly, but when we notice, it appears that the world is gone upside down. In many ways, that is what is happening to financial institutions. The model they had been operating within had been changing, but then a techno-societal shift of smartphones created a “leap’ forward in the previously march of progress. Responding to this shift is how banks physical points of presence will make the adjustment. From Bank Tech:
Today, the branch must seamlessly integrate with other channels and locations to not only meet the needs of customers who value services, but drive new sales. Whether that means redesigning branches to facilitate sales conversations, or offering ancillary services that have little resemblance to traditional banking, the companies that embrace a redefinition of their branch network will quickly rise to the top.
Much in in way that many of us do not practice or perform gymnastics at our favorite local gymnasium (gym) that we visit with our own level of frequency, so is the bank becoming much more of a facilitation point to engage in financially oriented activities that take a much broader view than simply “banking”. The bank branches will need to recast themselves as locations with the primary purpose of promoting and practicing financial wellness, much as the modern gym is a place to pursue physical fitness. We at Mercator Advisory Group will be tracking the compressed evolutionary conditions in effect in consumer banking channels with our Customer Interaction Advisory Service. We invite you to join us.
The evolution of consumer banking does not necessarily mean the end of the physical branch. Instead, bank branch transformation could redefine what these locations provide and how they contribute to the overall customer relationship.
As routine transactions migrate to digital channels, branches can become places where customers receive advice, discuss more complicated financial needs, and pursue broader financial goals. Financial institutions that successfully connect these physical experiences with mobile, online, and other channels may be better positioned to make their branches valuable components of a modern banking relationship.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
