A multi-channel transformation across different financial channels.
Financial marketers are facing a demographic challenge as the millennial generation discover new alternatives that are challenging the primacy of traditional providers. Young people's expectations are constantly changing and evolving as fintech disruptors threaten the status quo.
We continually benchmark the best in class retail bank operations across the globe. At Credit Union, Australia and National Australia Bank new branch formats are emerging. In this article, we present new design concept ideas and branch formats to inspire management teams to consider re-engineering the point of purchase.
The traditional retail banking model, comprising high street banking with digital channels for transactions, is changing. As a result, banks will have to make changes to all their distribution channels. The key developments will be as follows:
Branch networks will be transformed into sales and advice outlets - they will become more productive than today and their costs will be considerably lower.
New digital channels will be designed to create a “wow factor” for the user, thereby capturing these channels' full sales potential.
Banks will manage these different channels so that service from the customer's perspective is a seamless ‘omnichannel' experience combing self-service and serviced products.
Without decisive action, banks risk being burdened with an expensive and inflexible distribution set-up. To start the journey, top management should look at metrics and corporate governance in a less branch-centric way and should launch a series of multichannel mini-transformations both within and across the different channels.
Finding the right size branch and boost sales performance:
A recent research document released by McKinsey highlighted how branches are becoming more sales and advice-oriented, and suggested that in the light of future customer needs it should be possible to free up 30% of costs by adapting the design of the branch network and to increase sales per front-office employee. This is where the services of the CampbellRigg design consultancy can impact the strategy for developing the right size branch.
Any branch transformation strategy should be structured around the following issues: The light size branch network:
Banks can optimise their branch networks by adapting both the location of branches and branch formats to suit client needs.
Tailoring the footprint - Branch network costs can be reduced by as much as 20%.
Sales can simultaneously be increased through improved understanding of customer segmentation, profiling and behaviour (and more importantly future behaviour, please see Generation Y in our convenience banking services explained) in each micro market, as well as better aligning capacity to demand. This is not only about cutting capacity, but about ensuring that capacity is situated where it is needed. Whereas ‘contribution to profit' was previously the main consideration when deciding whether to maintain, open or close a branch, other parameters such as customer experience or access to funding may be as important in a low-interest rate environment.
Differentiate branch formats: Examples of new formats are specialised branches for high-value segments, small service or sales points of 2-4 employees for simple products, and totally automated branches that focus exclusively on service.
Boost sales - Banks can increase the time they spend on sales and use that time more efficiently.
Ultimately, the in-store design experience in today's retail world is about far more than just the products. This concept is an integrated digital and interior design experience. It's about injecting creativity and design to put new momentum behind the retail proposition.
By developing a compelling format/channel, we help clients increase sales of new and refurbished stores with sales per square meter significantly ahead of the average.
Why not call and talk to us about your bank branch retail formats, digital branding and social media requirement.