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Branch of the Future

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So if the bank of the future is really the “bank of now”, what does that mean? It means that you have to take action now, today, to create a banking environment that’s capable of taking on the challenges of a rapidly changing marketplace.

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Branch of the Future

  1. 1. branch of the Jim VanderMale future Executive Vice President, Retail Market Strategy It’s a concept that’s as elusive as the horizon. While everyone talks about it as though we’ll someday arrive in the future and poof, there it’ll be, the reality is that the bank of the future is already here. It’s the bank of today, tomorrow, 20 years from now, an evolutionary result of technology, customer need, and industry circumstance. So if the bank of the future is really the “bank of now” . . . what does that mean? It means you can’t just sit on the sidelines and wait for a transformation to happen. You have to take action now, today, to create a banking environment that’s capable of taking on the challenges of a rapidly changing marketplace. I’m not suggesting change for the sake of change - but change for the sake of survival.
  2. 2. Having been in the financial services industry for time to understand that consumers’ needs were 30 years - twenty of them as a banker myself, I’ve changing— and they took action to capitalize on seen what works and what doesn’t. History and those changes. experience have shown me a clear vision of what the “bank of now” should be. Bankers would be wise to follow suit, because the plain fact is, customers’ needs and expectations of bank branches have also changed dramatically in the changing customer needs past decade. Not only have technological advances provided customers with a tremendous amount of changing branch needs convenience, the customer base is more diverse than it’s ever been: 75 million Millenials rival the 80 Bigger just doesn’t mean better anymore. Look at million Baby Boomers also in the market. To remain technology, for example. Communication devices successful, it will be critical for branch design and are continuing to shrink in size, yet are increasing strategy to adapt to these changes productivity at an amazing rate. The reason for this isn’t just because of advances in technology, it’s In order to decrease costs and increase profits, also because smart, insightful companies took the banks must address customers’ needs. The good news is that despite all of these changes, particularly the 6 reasons why increased number of channels available, the branch is still the #1 smaller is smarter preference… for certain kinds of transactions. That’s the key differentiation in today’s market compared to 10 years ago. Gone 1 Smaller branches offer the same market penetration as their larger counterparts. are the days when teller lines were jam-packed on Fridays because everyone was cashing their payroll 2 You can potentially build 2 smaller branches for the price of one big branch. checks. Advances in technology such as ATMs, online banking, and mobile banking, have driven these 3 Site selection is easier with smaller branches because less land is needed. types of transaction-based needs out of the branch. Customers now largely visit a branch for one simple 4 Smaller branches can be purposely reason: to talk to someone. Maybe designed to enhance visibility. they want advice, to apply for a loan, or they have a complex transaction 5 Smaller branches can be strategically located to conduct. Whatever the reason, they made a concerted effort to talk where a larger branch could not. to a person- and the branch had better be ready to meet that need. 6 Less staff and lower operating costs = quicker return on investment. This paradigm shift represents a huge opportunity for banks. If the Branch of the future
  3. 3. majority of actual transactions are being handled in high other channels, why continue to build big, spacious, flagship-style branches? What is the need for a TELLER TRANSACTION 12-station teller-line and an expansive, multi-laned drive through if customers are just going to go online or visit an ATM to handle their transactions? A full-service branch that meets the needs of today’s customers simply won’t require those features. They don’t meet the needs of today’s customer and are frankly an unnecessary waste of money in most cases. I strongly believe that given the right operating low model, a completely self-sufficient, full-service branch can be delivered in a 1,000 – 1,500 SF 1980’s 2010 footprint. SALES & SERVICE Industry research supports this claim. A recent study produced by the Deloitte Center for Banking Technology Solutions suggests that “U.S. branch changes While the branch experience needs to be over the next 10 years will likely center around 5 predominantly about creating personal relationships, main areas: branch redesign to help customers technology can and should play a huge role in better navigate the outlet; operating model and facilitating the experience. Allowing customers to staffing changes to improve customer service by leverage technology in the branch, such as self- engaging the customer in new ways; technology service kiosks, discover walls or touch tables, can enhancements to improve the customer experience increase cross-selling opportunities significantly. and increase cost productivity; enhanced network management to increase customer convenience while improving flexibility and cost-effectiveness and better connecting the community and the AppropriATe STAffing customer to create greater brand loyalty.” Smaller branches require less staff to operate – but So if smaller branch size is the critical first step, a that smaller staff can only be efficient with proper thoughtful, holistic design and staffing strategy is training. Arm your staff with the tools they need to the necessary finishing touch. The environment is handle all customer issues and involve them in the where the magic happens, so while a smaller branch branch design so they understand the purposes of size alone might offer significant returns in saved the changes and can be effective brand advocates. land, construction, and operating costs (in addition to being far more environmentally friendly), those benefits are negated if the interior of the branch and TAilored SuiTe of producTS & ServiceS the staff aren’t given appropriate consideration. Having a wide range of offerings isn’t useful if your A high-performing retail environment that’s customers don’t care about most of them. Know effectively designed to influence consumer buying what your customers want, understand what they behavior will rely on several key factors: need, and offer them just that.
  4. 4. STreAmlined communicATion STrATegy Jim VanderMale is Executive Vice Just as customers don’t care about products and President of Retail Market Strategy at services that aren’t relevant to them– they can’t BrandPartners, Inc. care about relevant offerings that they don’t With 20 years in the banking industry understand. Keep messaging clean, simple, and plus a decade of experience developing appropriate and customers will respond. strategic branding programs for the branch environment, Jim is uniquely qualified to help clients understand the value of using integrated retail communications to increase profitability. effecTive BrAnching STrATegy A key member of the BrandPartners senior management Smaller branches can fit in a lot of places their team, Jim is not only responsible for the direction and larger counterparts cannot. Thinking outside the management of BrandPartners’ business development norm and considering non-traditional locations will and retail accounts groups, he is also instrumental in open up a lot of opportunities. Nothing replaces developing and maintaining strategic partnerships with sound market intelligence, however, so understand national clients to ensure seamless execution of their every nuance of any new expansion market before programs. making a commitment. For more than two decades, BrandPartners’ award- winning retail environments have helped companies The bottom line is simple: realize their brand potential by building profitable retail networks. for banks to remain competitive, they need to think smarter and smaller, capitalizing on BrandPartners’ experienced professionals work with you significant industry changes in customer to positively influence consumer-buying behavior whether you need — need. - a retail prototype design the “bank of now” should be cost-effective - retail office architectural plans and construction and efficient, playing an effective, tactical - merger-and-acquisition implementation role in the grand scheme of multi-channel - integration of business lines at the branch - in-store banking solutions management, which offers a multitude of - communication messaging and point-of-sale benefits for institutions brave enough to - brand and identity development chart a new course. More than two-thirds of the nation’s top financial institutions have trusted BrandPartners, as have hundreds of community banks and credit unions. In fact, BrandPartners has partnered with more than 2,000 financial services companies and touched more than 36,000 branches worldwide. The company is headquartered in Rochester, N.H. with offices in Seattle, Phoenix, Jackson, Milwaukee, and Hartford. Additional information can be found at: www.brandpartners.com Branch of the future

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