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What’s the future of in-person banking?

Leveraging customer insights and digital workflow to provide an enriched experience can breathe new life into the branch network.

Jun 15, 2022 / Consumer Banking

Traditional bank branches have been on the decline for years, but they can continue to play an important role in the customer journey if they can harness the power of digital technology and workflow to improve the physical banking experience.

Today’s consumers want banks to go beyond facilitating transactions—they also want their bank to care about them as people. Merging digital and real-life experiences is a key component in achieving an excellent overall customer experience. Banks will need to embrace digital with a human touch to transition from transactional relationships to digital experiences that create meaningful connections and drive deeper loyalty and more profitable customers.

Innovation in branch design can help retain and attract new hybrid consumers. McKinsey estimates that a traditional branch model devotes 70% of floor space to tellers and 30% to self-service, while these percentages are flipped in the smart or digital branch model. Smaller, more streamlined layouts mean lower infrastructure costs. Smart branch layouts have resulted in 60% to 70% improvement in branch effectiveness as measured by cost savings and increased sales, according to McKinsey’s research.

Branch banking in the digital age means embracing the power of front-to-back digital transformation to augment, personalize and accelerate the in-person experience. Instead of waiting for customers to explain their transaction needs to a teller or personal banker, smart branches direct customers to the best points of interaction (ATMs for withdrawals and deposits, for example, or personal bankers for lending).

Integrated customer relationship management (CRM) platforms can embed and integrate with digital banking and back-office systems to provide instant customer insights to personalize interactions—for example, providing a view of the customer to facilitate recommendations of lending products. This integration also speeds up account opening and the origination and servicing of new products.

This front-to-back digital transformation and the introduction of artificial intelligence have already started to pave the way for more personalized offers and advice across customers’ mobile devices or via notifications and chatbots. Now banks and credit unions have the opportunity to extend this seamless service across digital and assisted channels.

For example, HSBC’s Pepper is a concierge-style humanoid intended to improve customer engagement by educating customers on product information and making self-service available. The bot determines customers’ needs by using AI to ask relevant questions. With a modern and integrated approach, banks can now employ AI to leverage a single view of the customer based on CRM, digital and core banking platform integration and APIs, to augment both self-service and assisted experiences.

Customers are not all the same

Not every transaction is digital, and not every customer wants digital transactions. Fully digital banks, such as Varo and Green Dot in the U.S., allow the origination of all their products online, attracting a digitally savvy customer base. Other banks target customers who are more comfortable knowing they can perform transactions in-branch.

Servicing the branch-using segment efficiently is an opportunity for differentiation. Some banks leverage their digital workflows by adopting their mobile look and feel in branches and providing human hosts to guide customers through banking processes. The advantage is that once they do this in the branch, they no longer have to return. Still other banks, such as BMO, use remote video tellers to guide customers through their onboarding or transaction process, integrating smart technology with the human touch.


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Banks still face many challenges in striking the right balance between digital and a more human experience in the branch. Traditionalist customers may remain a significant segment of a bank’s chosen target market, and more digitally enabled branches promise to enhance the customer journey.

To maximize the potential and to justify the costs, banks need to marry advances in digital transformation with the physical experience. By doing so, branches can remain an important value-add and touch point in the relationship with customers, providing relevant services at the right time.

The secret is to capture the opportunities provided by human engagement by effectively leveraging customer insights and digital workflow to ensure that interactions provide an enriched experience, convenience and more personal service. With this approach, banks can maximize conversion opportunities in-branch and in other channels, breathing new life and purpose into the branch network.

Vincent Chamasrour is strategic business advisor, Americas, at Temenos.

Learn how bank branches are evolving for the future in this BAI Executive Report, “Branch banking continues its radical evolution.”