Retail banks the world over are rethinking their branch strategies in response to the rise of online banking. This often results in fewer, more consolidated, smaller branches – towards a future that I like to call “the third wave of branch thinking”.
In the first wave, all anyone talked about was “Branches? Eh? Why would we have them at all in the future?”. Then came the second wave, where the pervasive thinking was “We just need to automate and digitise branches to take out the overhead as they die a slow death.”
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And now comes the third wave, with the realisation that of course we need branches. They’re a critical part of the online/offline mix to provide customers with a range of ways to do business according to their needs.
Branches still matter
Physical branches still matter, but you can’t just see them in isolation. Retail banks need to stop thinking in online and offline silos, because customers just don’t think that way – they’re completely channel agnostic.
2017 saw branches become more purposeful, and with that, more customer-focussed. Fewer branches meant a closer eye on branch proposition, location, demographic, and a more localised offer.
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By GlobalDataWe’re moving away from generic branches that just get bigger or smaller depending on location. And we’re moving towards focused, innovative, flexible formats that can be repurposed throughout the day for a wide range of activities and events. Bricks and mortar retail banking offers include flagships, megastores, lounges, micro-branches, community branches, mobile branches, and pop ups.
We also saw a change in content – historically the holy grail for retail branches. Content is often touted as the great missing link in retail banking, often due to abstract, complex financial products combined with staff focused around reactive processes and fulfilment.
But the new generation of third wave thinking provides customer need focused new formats, so at last we’re seeing better content in the form of augmented reality, virtual reality, customer and community events, café and work hubs, digital studios, ideation and start-up business areas.
Branches are also becoming more porous – linked via technology to experts based elsewhere. And many banks are becoming less territorial, open to sharing their retail spaces with other brands to generate footfall and engagement.
As we move into 2018 I hope to see more branch investment in design innovation and technology to further enable lasting customer relationships where ideas are shared, and where collaborations can support increasingly savvy customers, helping them do more with their ever more diverse, varied and unpredictable lives.
No longer saddled with big roll-outs and scalability, this third wave can test, learn, experiment and have fun. We need to evolve, try out ideas, embrace change, and recognise that the occasional mistake may happen – all very refreshingly un-banklike!
David Martin is Joint Managing Director at M Worldwide
