By Daniel Hunter
Rumours that the High Street bank branch is soon to meet its demise are unfounded and fail to take into account customer behaviour across different generations, according to data produced by KPMG’s Customer and Channel Management team.
Presenting his views in a paper called There’s Life in the Branch Yet, Hugh O’Reilly, associate partner at KPMG, argues that the growth of digital technologies and mobile apps will increase levels of ‘non-assisted’ transactions, resulting in banks using branches to focus on sales, customer education, demand failures and providing advice.
He also believes that the reduction of branch transaction volumes will lead to the creation of a flexible branch model, where different services are offered, according to community needs.
“As technology shapes the way we manage our finances, the successful high street banks will be those able to develop new formats and experiences in response to local demand," O’Reilly says:
"A ‘Vanilla approach’ where one branch looks and feels the same as any other will no longer make good financial sense; what matters more is how well the banks are able to supplement mobile and on-line services by using technology in a branch environment to provide greater access to teams of expert advisers and enhanced customer service.”
O’Reilly cites one example of how a European bank has addressed the issue of lower branch footfall. In the Netherlands, SNS Bank has developed a low-cost, cash-free, approach to banking by partnering with the Post Office. The branches act as resources for customers to conduct cashless transactions and set up new services, whilst cash-deposit services take place in Post Offices. The result has been high levels of customer satisfaction through faster services dedicated to specific needs.
To ensure bank branches are able to provide the services demanded of them, KPMG has developed a 7-step plan involving analysis of customer preferences and assessment of branch performance. It also highlights the issues branches should consider implementing to make the transition from traditional branch formats easier for customers and staff.
O’Reilly says: “There is plenty of evidence to suggest that the branch will remain an integral and important channel for a sizeable proportion of the population, as part of a multi-channel model. However, the huge rise in levels of digital transactions means that many branches will need to fundamentally change within the next five years, if they are to avoid becoming the Marie Celestes of the local high street. The desire for customers to engage with their bank face to face will not go away, but it will be less and less for mundane transactional focused activity and more for help, advice and to resolve their banking problems.
O’Reilly‘s views come in the wake of research conducted by KPMG, which revealed that 54 percent of customers — across all ages — rate their ‘in-branch experience’ as 7 out of 10, or better. It also revealed that branches remain popular with both the younger and older demographic. For example, 1 in 3, aged 18-24, claim to visit branches to take out a new product or participate in a financial review. Of those aged 55 or older, 76 percent use branches to pay in a cheque.
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