Source: Peter Richards, BT
IP-based technology is key to the evolution of the retail branch network, says Peter Richards, head of marketing, BT finance industry solutions.
It only seems like yesterday that an increasing number of retail banks were preparing to kiss goodbye to their physical presences on the high street. Costly branch operations would be replaced by cheaper, more efficient, largely automated Internet and telephone services. And everyone would win – customers would get quicker, more convenient services, while the banks would save millions.
Except it didn’t really work out that way. Instead, the banks found that when it comes to high-value financial services people simply prefer to do it face to face. That meant branches had to be restored to the heart of their operations. And indeed in many cases this is what happened. The problem however comes when we look at the way those branches operate. And in particular the way they use technology.
BT works closely with the International Institute of Banking and Financial Services (IIBFS) at Leeds University Business School. Its view is very much that branches are crucial, but that to succeed in the modern retail banking environment, they need to continue to evolve.
Some fascinating recent research by Booz Allen Hamilton on behalf of BT showed that though 79% of people had a preference for buying their financial services from their bank, in practice only 40% actually viewed their bank as their main source for such purchasing. That 40% discrepancy represents a massive opportunity for banks. The statistics suggest that the customer appetite is there but the banks’ ability to promote and sell their services is lacking.
There are two key areas that the banks need to address in order to seize this opportunity. The first relates to their staff, who need to be trained more heavily in how to sell. But of more interest to this article is the second area - technology.
The key enabling technology here is IP. Firstly there’s the core network: by running retail branches, the online and telephone channels on one network, the consumer experience can be consistent and seamless no matter how customers choose to interact with their bank. This is because customer data can be updated and shared by bank staff in real-time wherever they work across the organisation. Also, by capturing information about every customer interaction and sharing it between channels more effectively, banks can exploit future contact with the customer as an opportunity to cross-sell more, reduce costs and increase revenues.
IP technology can also help to provide the human interaction that customers prefer, without the need to employ additional staff. Most organisations that operate a large global branch network can’t guarantee that a specialist financial advisor on certain products will be available at all times in all branches. However IP video-conferencing means that a customer can walk into their local branch and be hooked up with a relevant specialist via elsewhere in the country at the touch of a button.
Experience from BT’s own ‘Remote Advisor’ video-conferencing solution shows that consumers feel comfortable talking to an advisor in confidence because of the high-quality voice and video that it can deliver to branches across the bank’s own IP network.
Similarly as people’s home bandwidth continues to grow, customers will be able to ‘meet’ with their branch manager without having to make time to go into town.
As with every other part of the financial world, technology provides an opportunity for organisations to jump to the head of the pack. This is as true in retail banking as it is anywhere else.
The branch is dead. Long live the branch.