The Retail Bank of the Future – redefining the role of branches

In an era when one in five relationships begins online, some have questioned the future of branches. According to one research firm, visits to branches are down by 20 percent since 2000. Consumers seem more enamored of smartphones then teller lines, as banks rush to reinvent their primary relationship channel.

Citi’s new branch in Union Square is one example – interactive walls, free Wi-Fi, and a 24 hour video chat facility for customers who need service at say 4.00 a.m. in the morning.

Citi is not the first to use new technology in their Manhattan branches. Bank of America’s use of Surface in its Bryant Park branch is an even earlier example of how customers are being given tantalizing technology to address their financial needs.

In the meantime, a recent report by EFMA and Microsoft, suggests that the redefinition of bank branches remains a work in progress.[i] Published in Paris on December 6th it highlights three areas for improvement:

· Rebuilding customer trust and confidence; creating an integrated customer experience across channels; the future role of the branch

· Creating a new operating model : Improving operational efficiency; cost reduction and the role of technology; the impact of regulation and compliance

· Optimizing the online experience: Making the move to digital marketing; leveraging intermediaries; the impact of social influence marketing

The trick is to reconfigure not just the front office, but the back office as well, and make the cross channel experience reflect the same enticing engagement. Service too remains a challenge according to the American Customer Satisfaction Index.[ii]

But perhaps the biggest challenge facing banks in redefining branches is how to personalize their relationship with customers. Knowing who we are when we enter the branch, when we click online, when we access our accounts from our mobile phone, when we ring the call center with a problem – understanding what we need based on our total financial situation and lifestyle aspirations.

Ultimately the Branch of the Future is really about connecting with a market of one.