With physical channels decreasing their square footage in many markets, the challenge for banks is to make the most of what they have. Less is more. ING Netherlands has decided to make a shift towards new Advice and Experience branches. Patrick Brusnahan writes
At Diebold Nixdorf’s International Management Seminar, held in Amsterdam, ING Netherlands focused on how physical channels can progress in an increasingly digital environment.
Ralph Hamers, CEO of ING Group, said: “We want to portray ourselves as a tech company with a banking license. Even further, I think we should be the largest bank without a balance sheet if you really take it into the future.”
ING’s speaker, Philippine Risch, director of branches, ING agents & cash, said: “The ultimate experience is the ultimate digital mixed with the ultimate human experience.”
This has resulted in new branches that focus on advice and experience, without neglecting standard transactions. The branch, after all, is only useful if it was there to satisfy a customer’s needs. Even if it wasn’t needed, customer can feel relieved by simply seeing one.
Speaking to RBI, Risch says: “We will not move towards stores or branches which are only about experience. You have the basic functions on top of that. It is always about the core functions, providing advice, and in addition, providing a brand experience.”
One factor that didn’t receive the most praise was the ATM. While Risch admitted that cash will remain in a large role in Dutch society, it wouldn’t be a highlight in branches and ATMs could well be removed in the near future.
Risch says: “We’re not going to stop using ATMs. The Netherlands is already low on cash and cash usage is decreasing about 5% a year. Despite those facts, we think that cash will remain present in society for the next 10 or 20, maybe even 30, years, but the way we will distribute and make cash available for our customers will change.
“We will no longer use it as a differentiator in which we compete as banks but we will move the ATMs and the cash servicing to a joint utility which makes it a commodity in which we share costs.
“ATMs will remain in the Netherlands but there will be a lower number compared to now as we join forces and they will no longer be branded or on the walls or inside our branches, but they will be everywhere else. We still feel responsible towards our clients to provide accessibility and availability of cash.”
The initiative between ING, ABN Amro, Rabobank and Geldservice Nederland is to what Risch refers. A shared ATM network may be the key in ensuring the ATM’s survival in the country.
However, could this limit the advertising and marketing potential in the ATM?
“We have totally defined what it will look like,” Risch adds. “We think if you put your card in, if you are an ING client, you will see an ING screen. The functionalities will be identical and the clients will remain the clients of the bank.”
The future of the branch
Does this mean that the branch is going to drastically change? As numbers drop, are they all going to be focused on experience and advice?
Risch continues: “If you look at our current network, we have ING compact branches and standard branches, which are more focused on efficient service handling and only secondary on advice.
“The advice branches and the experience branches, which total about 140, they are currently only part of the network. We think those will remain.
“Now it’s only a part of the network, but we think that one day nearly 100% of the network will be advice or experience.”
As ING is a global company, so does this mean that more countries are going to follow the Netherlands’ example?
Risch concludes: “I have been speaking specifically about the Netherlands and not the ING Group. However, we are establishing global guidelines for branches together in order to exercise best practices.
“I also think within ING Group, the Netherlands is ahead of the curve and a bit of an example within the group. In other countries we have been strong in physical distribution; you see we are reducing the number of branches. I think in a couple of years, the models will have converged and every country will follow a digital first strategy with a certain number of branches.”