“It's going to mean that bank branches are as common as a Blockbuster video store in a few years’ time,” former Barclays CEO Antony Jenkins told CNBC, predicting about mass closure of physical banks. Two years earlier, Jenkins had also predicted that banks might close half of their branches and cut half of their workforce in 10 years. The trend, he said, is happening faster than he or anyone else in the Fintech industry might have guessed.
Thanks to digital leapfrogging, here in Myanmar we have the opportunity to go straight to the era of iflix and Youtube, bypassing the good old times of video rentals or DVD-by-mail. But what it also means is that at the same time, we’re at the forefront of a new paradigm in digital technology.
Apply that to the retail banking industry and you’ll realise how banks now face the imperative task of transforming the way they interact with their customers, in order to remain relevant and profitable.
In fact, according to a 2016 study by Accenture, there are three key roles that branches must play in order to attract and retain future customers: digital ambassador, adviser hub for specialised services and problem solver.
While everyone knows that it’s time to move towards a hyper-connected world, many of us are still figuring out the right way to get there. Too often, investments in one channel are made without consideration of, and often to the detriment of, other channels.
That is why banks need to think beyond channels, to understand the great necessity to enable a seamless, connected commerce experience. The way we see it, there are two major gaps that retail bankers need to prioritise: proper sourcing, analysing and activating on the data available to them about their consumers and their networks; as well as stitching together the individual channels within their network to build an ecosystem that enables none other than seamless, connected commerce.
Branches can, and should, still be the lynchpin of a successful financial institution, but they must be seamlessly connected to and ingrained with every other channel, from the ATM to mobile to the back-end systems. As an industry, we have to think beyond channels and the channel mix and drill down to the roadblocks that are stopping financial institutions from enabling an omnichannel experience, not only for customers, but also for the banks themselves.
Rather than tactically transforming individual branches primarily through technology upgrades, we advise retail bankers to view their banking transformation projects through the strategic lens of experience-driven banking. The opportunity for retail bankers lies not only in simply letting customers choose between channels, but rather by meaningfully converging and orchestrating physical and digital capabilities to provide a superior, end-to-end customer experience that enables connected commerce.
For starters, let’s look beyond the two most common areas that come to mind when one thinks of branch transformation: technology and design. While they form crucial components of branch transformation and transaction migration, they can’t be the sole areas of focus. One too many transformation initiatives have failed because the strategies focused too much on technology and design, overlooking other key stakeholders, namely people, process, security, sales and marketing.
Part of branch transformation means consumers get to be free to choose the channel of their choice, to be engaged in more personalised ways, and to have their banking interactions smoothly integrated into their day-to-day activities. In line with that, more transactions should be automated and tellers freed to become sellers and universal bankers.
Whilst customers are migrating to preferred digital touchpoints, and the bank branches will likely become more advice and sales centres, banks will look at ways to increase cost efficiency and enhance the customer relationship. A critical path to accelerate their branch transformation strategies and improve cost efficiency is to drive adoption of self-directed technologies within the branch, such as what Diebold Nixdorf have introduced through our 9900 in-lobby solution (already adopted by CB Bank) that provides consumers a choice as to how they perform their transactions and allows automation and tellers to coexist in meaningful ways.
Piers Leach is the Myanmar Country Manager for Diebold Nixdorf, the world leader in enabling connected commerce for millions of consumers each day across the financial and retail industries.