Bank branches: shrink or grow?
Both ‘shrink’ or ‘grow’ retail strategies for bank branches can be enabled by digital media solutions
With banking increasingly moving online, I am seeing banks choosing between two distinct branch strategies. One strategy focuses on cost reduction by minimising the number and size of bank branches, the other strategy focuses on creating more value within the branch as well as driving more transactions online. Both strategies can be enabled and enhanced by different digital media solutions.
The way banks are servicing their customers is changing massively, not just because simple transactions are moving online – increasing property and staffing costs are causing banks to reassess the role of the branch. And there is increasing pressure to address this issue as the number of customers visiting branches is decreasing. Banks such as ING Direct and Ubank are delivering many of their core banking services ‘online only’ allowing them to compete effectively on price and convenience.
At the other end of the spectrum, SNS Bank in The Netherlands has increased their network of branches from 143 to 210 and is treating their branches like retail stores, but where the sales of their products – ie, fulfilment – happens online.
Banks adopting the cost reduction strategy are pushing as many transactions as possible to web and mobile and are teaching their customers to adopt a self-service approach. The branch then becomes a place for handling high value and complex transactions and discussions, such as home loans or business loan advice.
Digital signage is a powerful tool for supporting the cost reduction strategy. Digital signage can partly perform the role of staff in terms of communication – directions, news, education and latest offers. Offers can be targeted by branch location, time of day, or the demographics of customers and can be distributed centrally using a content management system – normally cloud-based. Self-service technologies, eg, touchscreen kiosks, can reduce the reliance on ‘human’ staff by processing transactions or acting as a digital concierge. Video conferencing can be used to access experts such as lenders who are centrally located (offsite) thereby leveraging their expertise across multiple locations.
The value strategy creates an attractive destination for customers and delivers an engaging, high value experience. The value strategy still promotes fulfilment of low value transactions online but attempts to provide differentiation and ‘stickiness’ in store through customer education and recommendation of financial solutions for significant life milestones such as house buying, wedding financing or retirement planning. The branch becomes a high touch experience rather than a place for transaction processing.
Digital signage can be used to create ambience, reinforce branding but goes a lot further in supporting the value branch strategy. Education is a key element, so digital signage can be used to promote events, briefings, consultations, and workshops and interactive touchscreens can be used for scheduling events and managing bookings. And totally opposite to the cost reduction approach, banks adopting the value strategy actively encourage customers to come into the branch – both for high value or complex transactions, and for advice and education.
Visitor management applications, either self service or supporting a ‘human concierge’ can be used to help customers get the most out of their branch visit by managing arrival, setting up meetings with experts and advisors, managing queues and allowing customers to enjoy a coffee or engage with information, tools and content in the branch while they are waiting.
By adding a camera and smart software to a digital screen, the age and gender of customers can be determined with good accuracy which means messages and offers can be tailored, for example, according to a particular life stage.
Whether banks adopt a cost reduction or value strategy, banks still want to optimise their customer’s experience whether that means efficiency or value.
I am fortunate to work with a number of leading Australian banks and digital signage and digital media are a core part of their branch planning.