The COVID-19 pandemic has forced a lot of industries to accelerate digitalization processes and make investments to improve the online customer experience, in order to keep their customers and stay afloat.
Finance and banking, like many other industries, have been significantly impacted by the ‘new normal’. While banks were already facing a lot of challenges, due to the surge of disruptive fintech companies in recent years, the outbreak of COVID-19 has forced some of them to finally take the necessary steps towards digital transformation.
Online banking and digital payments have, undoubtedly, become the norm for many people due to lockdown and social distancing measures across the world. At the same time though, financial institutions need to find ways to stay in touch with their customers and even improve their relationship with them and ensure an enhanced experience, if they want to stay competitive.
A recent study from Accenture has found that during the pandemic, people adopted digital technologies and contactless payments faster than experts had predicted. In fact, 66% of all Mastercard transactions in the UK are now contactless, while 76% of card owners plan to continue using contactless payments.
Bank branches, on the other hand, were expected to take quite a hit even before the pandemic occurred. According to the same study from Accenture, specialists expected fewer than 300 branches per financial institution to still be active in the UK by 2025. However, if we take into account the impact of COVID-19, that number is now estimated to be even lower - between 800 and 2,000 bank branches overall, left in the UK in the next 5 years.
The UK case is an excellent example presenting the evolution of bank branches in the years to come, but it is not representative only for the UK. It seems that we will need to get used to having less bank branches in Europe, partly because of the cost optimization strategies of the banks, but also because branches are becoming irrelevant for a great number of bank transactions that can be performed online, through e-banking and m-banking or through in-branch self-service devices.
The importance of bank branches
The banking and financial services industries are inevitably going through massive changes in their business models. Nevertheless, bank branches won’t totally disappear as they play a pivotal role for financial institutions, with many processes still relying on branches and with customers seeking for the branch experience.
The aforementioned study by Accenture also found that 82% of customers need human advice for complex banking products, such as loans and mortgages. Therefore, a physical branch can provide the necessary consulting and support that some customers will still need for certain operations or for managing their money.
Furthermore, business SME customers need to deposit or access cash regularly - and, right now, they need a branch to do that.
In addition, human interactions drive brand engagement. Bank branches will continue to welcome customers who need assistance and help them with their operations or educate them until they can transition fully to an online environment.
Redesigning the branch
Bank branches need to adapt to the new banking era and to be redesigned to accommodate the fast-changing customer needs. Starting with abiding by the physical distancing rules, modern branches need a queue management system to manage visitor and customer flow during COVID-19 and beyond in many ways, as not only does it help ensure social distancing, but it can also create a positive and engaging experience. Further to this, implementing automated solutions, such as customized ATMs, will encourage customers to perform self-service banking operations, while bank employees take up a more complex consultative role.
It’s important that financial and banking institutions consider different formats for each of their branches, depending on the particular needs of the area in which each one is located. Branches should also be designed to be able to evolve over time without the need for complete refurbishment or upgrading. Bank branches of the future could, for example, accommodate:
- A 24/7 Self-Service Zone - which would always be open to customers, so they can perform the most frequent transactions, such as cash withdrawal or deposits, bill payments, etc., without the presence of bank employees.
- An Assisted Self-Service Zone - for slightly more complex operations, where a customer might benefit from minimal assistance from bank employees.
- A Consulting Zone - where customers can talk to a bank consultant about complex bank services, such as loans, cards or other bank products.
- A Teller Zone - a dedicated space for transactions that require a teller and customer authentication. This area should provide cash handling solution for tellers, eSignature devices for customers, and any other necessary hardware and software.
A very interesting example comes from Germany, where Volksbank Stuttgart is planning to repurpose 10% of its branches, turning half of them into self-service centers without personnel, and the other half into strictly consulting centers.
For banks as well as for bank customers, it’s all about finding the right channels to perform the required interaction at any given point. Banks around the world should start building the branches of the future now, lest they be left behind in the new global economy.
Solutions for a modern branch
Printec can assist bank branches with numerous off the shelf or custom solutions designed to optimize operations and customer experience. One such product is x-core, a software solution for self-service kiosks or ATMs, that can deliver personalized experiences responding to the needs of today’s digital consumers. x-core helps branches stand out and offer customers extended self-service possibilities, without losing the human touch, while employees focus on consulting customers and other value adding tasks.
In fact, this solution has helped Raiffeisen Bank in Serbia to successfully transform 58 of its branches, improving customer experience, extending the network’s available services and working hours, while minimizing operational costs.
The bank decided to introduce a bank yourself concept, while making consultants available for more complex customer requirements. Printec’s solution includes customized ATMs in the branch, where customers can perform almost any type of transaction by themselves, including cardless or cashless transactions. Our x-core software has enabled Raiffeisen Bank to offer personalized customer experiences in their transformed branches, reducing queues and waiting times and extending working hours without increasing the costs.
Such solutions, and more, could be replicated in any branch in order to make it a safe and more efficient environment. Learn more about the branch of the future and the solutions to be implemented, here.