The Way of the Future: Technology and Branch Designs of the Modern Retail Bank
Innovation among retail banks is a slow-going, yet essential part of keeping up with market trends. Currently, Celent is conducting a series of surveys with a selected panel of banking professionals to investigate if and how branch channel transformation is taking place among various retail banks.
In our first round of surveys, we sought to understand which technology and design elements were most likely to occur in one or more of future branch designs. According to our panelists, technologies such as cash recycling, tablet-based applications for front line staff, and digital signage were among the most likely features to be included in future branch designs.
In regards to physical design elements, we discovered that drive through ATMs, areas where customers can interact with digital channels, and lounge/waiting areas were also likely to be included in one or more branch designs. Many physical design and technology elements are intertwined such as drive through ATMs. As you can see in the figure below, drive through ATMs were far more likely to be included than drive through tellers, which is closely connected with the cash recycling needs discussed earlier.
There are also a growing number of banks using video teller machines instead of traditional tellers for drive through transactions, which provides the same functionalities as an ATM, but with the added benefit of face to face interaction and the ability to perform a wider range of transactions resulting in faster service, extended hours, while reducing operating expenses at the same time.
We were surprised, however, to see how many approaches were more traditional than innovative. This mix of old and new likely reflects the varied interpretation of “branch transformation.” Radical changes aren’t always considered necessary, particularly among banks with lower transaction volumes. For small banks, many of the legacy methods are still suitable, but are used with less frequency.
Figure 1: Some Legacy Approaches Will Be Scarce
Source: Celent Branch Transformation Research Panel, May 2015, n=41. Q: Based on what you know now, how likely will your future (1-5 years) network include the following design elements in one or more branch designs?
However, in this survey we also discovered that many banks did not have a clear vision of what a successful branch transformation meant for their particular institution. Not surprisingly, it was also evident that most of these banks are still in a nascent stage of branch transformation. Given this information, responses regarding future branch designs should be considered highly speculative; as a result what these banks actually deliver as part of their future branch designs may be quite different, and may change once they have tested one or more new branch models.
Fill out the short application here if you would like to be a part of Celent’s Branch Transformation panel. In return for your participation, you’ll receive a complimentary report containing the survey results, as well as a webinar invitation where panel members are invited to share and discuss their thoughts on the survey.
This blog post adapted from “These Early Days of Branch Channel Transformation: Celent Branch Transformation Panel Series Part 1” by Jean-Marie Ubigau and Bob Meara
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