STRATEGIC PARTNERS
April 6, 2003
LONDON -- A new report from UK-based consutling firm Datamonitorpredicts that bank branches, which continue to be important than the Internet or call centers in terms of business generation and customer usage, will undergo a transformation with coffee shops, sofas and self-service stations for customers.
According to the report, "Branch Renewal in European Retail Banking," Datamonitor expects branch renewal rates to surge by 2004 with renewed branches to constitute nearly 19 percent of total European branches by 2005 from less than 1 percent in 2002.
Counters and thick glass separating customer and staff will no longer characterize branches, according to the report. Rather, branches will increasingly move toward open plan layouts, with branch advisors moving freely among customers or sitting at open desk spaces that are accessible to customers.
In the first phase of branch renewal, banks are likely to give priority to branches in affluent urban areas with high concentrations of high-net worth, technology-savvy customers. In the long term, however, Datamonitor believes that Europe's top-tier banks will aim to renew all the branches within their networks.
Self-service stations that offer access to ATMs, Internet and phone banking facilities will be made available for customers to process simple transactions, according to the report.
Banks' efforts to keep customers in the branch are likely to see proliferation of sofa-areas and coffee shops within the branch as well.
Wireless technologies will give staff the ability to move freely within the branch to service customers, enabling them to identify and service a customer as one enters the branch, for example.
According to the report, it is possible that services such as real estate agents or travel agents could be found under the same roof.
For branch staff, emphasis will move from processing simple transactions to selling and customer relationship management. Banks may therefore have to replace existing branch staff or re-train existing staff to meet these requirements.
"Branch renewal is set to become the key area of focus for European retail banks with respect to their distribution strategies, as they realize that the branch remains pivotal for customer relationship management," said Christine Skouenborg, a financial services technology analyst at Datamonitor, in a news release.
"That said, branch renewal will not occur overnight as it entails significant investments in infrastructure upgrades and application development. Moreover, there are significant operational issues at stake, most notably the issue of how to increase human skill-sets within the branch and how to position branches as credible centers for impartial advice."
