Digital tools and channels are changing the banking game. While these innovations aren’t replacing regular bank branches, they’re forcing the retail banking space to rethink how deliver services within traditional brick-and-mortar locations.
According to McKinsey, branches remain an essential part of modern banks’ operations – even in the digital age – because they fulfil an essential customer-advisory function. As customer behaviours change and more and more new technologies are released, the branch as we know it won’t fall away, it’ll simply give way to the introduction of “smart branches”.
“Most customers now carry a bank in their pockets in the form of a smartphone and only visit an actual branch to get cash or, occasionally, advice,” writes McKinsey. “The bank branch as we know it, with tellers behind windows and bankers huddled in cubicles with desktop computers, needs reinvention.”
To understand how far we’ve come, where we are now and where the industry is headed, here’s a brief look at the banking branch’s past, present and future.
Banks of the past
Legacy branches are typically large, they lack the latest technology and their offerings are rather irrelevant in today’s ever-changing, technology-driven market. From a cost perspective, branches can sometimes account for as much as half of the operating costs at retail banks. And offering customers a consistent experience across all branches – whether they’re in a big city or a small, rural town – proves challenging.
Banks of the present
While many banks have started to introduce elements of the smart branch model, experts note that most are not extracting the full potential offered by tools and technologies in the digital age. Making branches “smart” isn’t only about installing new machines or buying different mobile gadgets. True smart branches are teller- and desk-free branch formats, they use advanced analytics to provide more personalised, data-driven experiences and have trained their staff to successfully support bank customers.
Banks of the future
“The branch of the future will be fuelled by technology with a personal touch.” This is according to Ray Wizbowski, CMO at Entrust Datacard.
Julie Godfrey, manager of finance solutions and innovation at Samsung Electronics America, believes that the future bank branch can be summed up in three main trends that have already made an impact across the retail space. These include:
- Equipping employees with new technologies
- Connecting with customers through personalisation
- Deploying new innovations quickly
Technology certainly isn’t rendering the traditional branch obsolete. In fact, the digital age holds the key to ensuring that branches stay relevant into the future. Banks looking to stay ahead must embrace the tools they need to succeed. Need help handling these increasingly complex environments? At Nebula, it’s our job to help our clients with all of their technology expense management needs. To find out more about what we do, complete the form below and we’ll be in touch.