Re-Thinking, Re-Focusing and Re-Defining the Branch
Branch design is a hot topic these days with all the speculation about the “branch of the future” in the wake of gradual customer migration to electronic channels. Consider also the 5,000 plus branches that have changed hands through mergers and acquisitions in the last two-and-a-half years, according to SNL Financial. For example, PNC Financial Services Group acquired RBC Bank (USA) with over 400 branches in June of 2011 while BB&T Corp. acquired BankAtlantic Bancorp with 78 branches in the same year. Millions will be spent in re-branding and re-designing these branches to fit the new corporate brand, as well as implementing the latest technologies that will attract more clients and simplify their lives, such as remote deposit capture, self-service kiosks and mobile apps.
Re-thinking branch design can be a slippery slope, however. Prudent bankers need to ask pivotal questions to ensure that their investment in a new brand and design will, in fact, result in sustainable growth. For smaller financial institutions facing big-bank competition, branch design can be the golden key that unlocks profitable growth potential by identifying new ideas, products and services that are focused on the needs of customers. It can help reposition them in the marketplace and showcase more compelling and differentiated products and services to a broader client base.
Attention to Detail
The well documented success of companies like Portland, Ore.-based Umpqua Bank has prompted more financial institutions to re-think their current branch design to re-focus on the customer. The challenge for most is recognizing the physical barriers to superior service within the branch and implementing solutions that will bring the expected return on investment (ROI). Upon entry, what is the customer’s first impression of the branch? Is he faced with “The Line Starts Here” signage, or warmly greeted by an engaging employee? Is he able to select the teller he wants to serve him—the one who is familiar with his business – or must he take the next available?
According to historical data, approximately 28% of customer visits to a branch are due to inquiries requiring a problem resolution. Is there a private office where customers can confidently discuss their accounts with an expert, even if the expert is located remotely or accessed via a high definition video? Will the customer need assistance in understanding the use of mobile apps, envelope-free ATMs or online bill pay services? If so, are there resources available to help learn those processes? There are fixes to all of the aforementioned problems, but understanding the needs of the target market segment and re-focusing on how those customers view, utilize and experience the branch is the key to getting it right.
As Walt Disney once said, success is “the attention to infinite detail, the little things, the minor, picky points that others just don’t want to take the time, money or effort to do.” Effectively re-defining a branch includes a thorough understanding of the intent, objectives and outcomes of the project, with close attention to how those outcomes will affect the client. Yet, without experiencing the touch and feel of new designs and technology, it’s easy for financial institutions to fall back into tried-and-true solutions of the past and become too fearful of change, or worse, invest in trendy amenities or technologies that may not be relevant for their market segment or support their corporate brand.
So how do they choose the right solutions that make a difference? To determine the success or quality of any product or service within any industry, it’s important to look at the success of the relationship between the customer, the process or product and the business itself. Testing each design, solution or product against the desired result to determine if in fact it works within the branch prior to implementation is essential in order to avoid costly errors.
For example, when targeting the high-net-worth client in an affluent downtown business location, privacy and personalized and expedient service become paramount. Being recognized and greeted by the teller who is already familiar with his or her business and personal accounts and having expert advisors readily available can be far more important to this client than creating an Internet café or shared training work stations for instruction on the latest mobile banking apps. While there are definite advantages to these and other services, the cost of including them must reflect a timely ROI and mirror the established brand of the branch.
“Testing for failure” helps ensure the quality of your design, products and your services and acts as a preventative measure, rather than a correction that follows a failed implementation. So finding the right method to test the concept or laboratory in which to experiment with the many solutions available can save time, effort and costly trips down dead end roads.
The branch is not dying but it is evolving to meet the needs of clients. To successfully re-think, re-focus and re-define a branch, a great deal of attention must be paid to the process, the solutions and the projected ROI to ensure the projected outcome. Because the effects of the economic downturn are still evident, more and more financial institutions are willing to explore changes in their branches that foster greater innovation, greater customer service and what leading edge technology can do to bolster consumer traffic and increase sales.