In a recent article about what we can expect from branch banking in 2013, I predicted the rise of the 'light' bank branch. It's something that I thought was worth picking up on here, and expanding on slightly.
So what is a 'light' bank branch? It's not a reduced model of a conventional branch; it's a new breed of branch that targets specific audience groups and fits their individual needs.
The crux of this new approach lies in achieving the right balance of face-to-face contact with branch staff along with automation and self-service technology.
All branches, whatever the size and location, need to deliver a consistent level of service during both busy and quiet periods, but in the case of light branches, this may need to be done with a reduced number of staff. So how do you get the right balance? How many people does it actually take to run a branch and how can you best align them with customer demand?
As I mentioned in my other article, banks need to build a different kind of team-working structure, where flexible staff schedules can meet customer demand. Above all though, the answer to making these light branches work lies in the fact that there is no one-size-fits-all solution and that each branch is different.
For example, let's take two quite different branch locations. Firstly, a busy shopping center in which people need a bank for quick access to cash, and perhaps want to do other simple tasks, such as paying in deposits, while they're there.
Secondly, a town busy with local businesses, as well as customers who live in the area. The needs of customers using this branch location are going to be far wider than those at the shopping center. Some customers are going to want speedy service even on a busy Saturday morning; others will require more time and space for discussion.
In terms of customer profitability, it's going to be the town branch that generates more revenue. That doesn't mean that the needs of the shopping center customers shouldn't be addressed — in fact the exact opposite. The bank needs to address their needs in the most efficient way possible so they can focus on generating as much business as they can from the more profitable branch.
This is where self-service and automation come into their own. For the shopping center, the ATM self-service channel is key, offering the lowest operating and running costs of all the transacting channels. Technology even exists to conduct video conferencing through an ATM, still enabling customers to speak to an adviser if they so wish.
For the town branch, mixing self-service and automation with more human interaction will be the optimum solution. Customers can make use of the self-service points without being held up in a queue by people with more in-depth requirements. Those who need advice on bank products find staff ready and able to help.
Get it right and the channels complement — rather than compete with — each other. E-channels become a place for consumer browsing, initiating contact and performing simple mobile payments. ATMs, thanks to ever more resilient and reliable technologies, can handle the transactional need to deliver self-service wherever possible.
And the branch can transform into a prime relationship zone for face-to-face needs such as closing leads, resolving customer problems and other assistance only when necessary.
The key to achieving this, however, lies in reducing cash usage by improving cash management. This works in tandem with consumer education regarding the mobile channel. Once consumers feel comfortable with this channel, and realize its value, it will help successful implementation of these light bank branches.
This isn't rocket science, but the point is that there's no one-size-fits-all approach. The question is, why does it take a start-up bank to recognise the demand for this more light-touch, bespoke approach?
I applaud Metro Bank's view that dispels the myth that the bank branch is dead. They do well at blending automation, self-service and human interaction; it's just a case of taking a more intelligent approach to serving today's customer.
Richard is a principal consultant at Glory Global Solutions, the experts in cash-handling technology. Richard has more than 20 years' experience in bank automation and technology, currency management and payment systems.