To create the bank of the future, you may have to abandon the present. If we’re honest, we acknowledge that when banking customers come to a branch, it’s usually because they don’t have another choice. They show up when their business requires a physical presence: signing documents, small businesses making daily deposits, or purchasing a cashier’s check.
These customers and transactions don’t generate much revenue for the bank. And yet branches are the most expensive channel to run, given real estate and personnel costs. Bankers know that, in their current state, their branch networks aren’t sustainable. But does that mean that the branch has no place in driving profitable relationships with customers? It is my opinion that the branch still has a critical role in driving revenue for the bank – they just need to appear and function differently.
We see data that says customers still believe the branch is an important channel…even if they don’t visit often. This trend though is likely to decrease as technology and functionality drives more and more business to the online and mobile channels. Almost a third of accounts are being applied for over the online channel. But if we talk about wealth management, private banking, brokerage relationships and commercial accounts, customers still want to know their banker. They want to discuss their goals and financial aspirations with an experienced financial counselor.
So the shift that needs to occur in bank branches is not about eliminating the branch but transforming it into a sales center – one that has experienced bankers to provide in-depth assistance to their customers. After all, these are the most profitable customers to the bank. In lieu of tellers lined up behind windows, the branch needs to become a place of interaction, one where customers can enter and seek guidance – one where highly skilled bankers, using a range of technology can sit with a customer, having a 360 view of their relationship and make real time recommendations and decisions.
The experience then, each and every time any customer interacts with the bank, must be executed with precision and care. Providing an exceptional experience requires a complete view of the customer – backed by a solid Sales Transformation strategy. The fight for each customer’s wallet and loyalty is real, and without said technology and strategy, that wallet will get thinner and loyalty to the brand will suffer. There is time, but those who jump in first will have the competitive advantage.
Want to learn more about the future bank? Register to attend the SAP Financial Services Forum in New York City, September 18-19, 2013.
Carl Snyder, Senior Industry Principal, SAP Financial Services