BFSI VISION Branch Transformation


Girish VS

Managing Editor, BFSI Vision

Finding a Use for Your Branch

It is no secret that branch is the most expensive channel for customer service. Apart from the direct customer engagement – something that marketing gurus seem to discount – the branch is losing its mojo. There was a time when the branch was at the heart of customer contact – the customer had to come in to the branch to transact. Today, technology has made it possible for financial institutions to deliver customer service through a variety of channels – the branch being just one of them.

Is the branch dead? The answer is a resounding no! For years we have been hearing that technology will replace branches. The functions performed at a branch can now be done through a variety of channels. Yet branches continue to grow. We need to understand this phenomenon. In spite of all the technology and alternate channels, customer continue to use the branches. Unfortunately, we still do not know who is using the branch. And more important – why are they using a branch. I believe there are two categories of customers- those who use the alternate channels – mostly from the retail customer base, and those who use the branch – again mainly from the corporate customer base and some retail customers.

The next question is – are we using the branch for the set of customers who are frequenting our branches. Have we designed the branch to welcome the kind of customer who is more likely to drop in – in other words do we have a retail branch and a corporate branch designed separately, or do we use a single design? And that is at the core of branch transformation. The current thinking in branch transformation is along technology lines – how can I use technology, or what technology should I use? Therefore, the experiment of putting a coffee shop or a laundry out let in a branch (yes some banks did try it!) But if the largest segment of population who come in to the branch are corporate clients, why not have a business center in the branch – free for customers, nominal charge for others. Think of it, the customers who use a CCD to conduct a business meeting will frequent the branch, the bank gets a more valuable client, and the branch finds a better use! Or if it is the families of NRI's who are visiting, have a skype facility – again free for customers!

As technology adoption increases, financial institutions need to find a better use for the real estate they occupy. Branch transformation is not about redoing the interiors or putting in more technology. It should be about providing the right support for the most frequent users. Financial Institutions need to find the right use for the branch!