What financial institutions can learn from retail
The financial message boards, association groups, and social media have been in a buzz as of late about this topic of ‘Branch Transformation’. This phrase refers to the idea of transforming the once dominant banking channel of choice to better compliment its increasingly preferred counterparts, online and mobile, by providing a more retail-like experience with less of a physical footprint. To summarize – do more with less.
In addition, financial institutions are being forced to look not only at the banking center, but their branch philosophy as well. Historically, banking centers have focused on the transaction. Whether it’s been opening accounts, withdrawals, or deposits, the majority of the day was geared toward processing transactions. Today, we’re seeing more of those everyday transactions moving to online and mobile while bank traffic decreases. To combat this trend, financial institutions are looking for fresh, new ideas on what to do with these banking centers. Some have already found that they don’t have to look too far for the answer, they just have to look at how retail is battling a lot of the same issues.
Like the financial space, retail has been contending against decreasing foot traffic since shopping online became popular. It struggled to find that “happy medium” and found itself forced to embrace the transition in consumer buyer behavior. Now, when you walk into a retail location, the brand urges you to ‘check in’ online, post and share comments about your experience, and even turn to their websites if you’re unable to locate exactly what you’re looking for. Some big box retailers such as Best Buy have found success with opening micro-sized locations in areas such as shopping malls in order to capitalize on the high foot traffic volume. Plus, retail employees are expected to be experts on all the products they offer. They’ve moved beyond just the transaction to create a more consultative, educational experience.
Financial Institutions are picking up on these retail trends. They’ve begun downsizing the physical footprint of the branch and are moving towards a more sales and service branch philosophy. Employees should be expected to be knowledgeable about all products and services, or at least direct branch visitors to a specialized agent. Technology is becoming a major focus as banking centers are looking to bring the online and physical world together to provide visitors with the banking experience of their choice. Video Teller Machines are being implemented in order to keep overhead at a minimum while still providing all services expected by branch visitors. Digital signage and touch-screen kiosks are being used to help branch employees promote and sell products and services while adding an extra ‘wow’ factor. Then, to bring the technology full circle, financial institutions are encouraging their customers to turn to social media and tell people about their banking experience.
As with retail, consumers are not turning away from the branch – They’re just expecting more from it. This is probably the most exciting period of transition the financial industry has seen in many years. No one ever used to think going to the branch was an “experience”—it was just something you had to do. Now, it’s going to define your institution and be what separates you from everyone else.
