Branching Out: Rebuilding Value In The Branch Channel - Market Research Report On Aarkstore Enterpri

Until recently, banks seemed to be neglecting their branches in favor of remote channels

. However, they are now appreciating that branches are a highly effective channel for acquiring customers and selling products. Banks have therefore put in a lot of effort into improving the quality of the customer experience on offer in their branches. This report investigates the impact of these changes.

The scope of this report includes a description of how and why banks are reassessing their branch strategies. The report also presents results from the Financial Services Consumer Insight Survey to highlight consumer preferences regarding the branch channel. Additionally, we provide an analysis of the latest trends in branch design and configuration, the use of technology and the role and function of staff. You will also be able to assess the outlook for branch networks.

Highlights; Branches are moving away from a primarily transactional role towards a sales and advisory function. Many consumers prefer to use branches when buying or seeking advice on financial products, particularly more complex products, such as mortgages.

New technology, such as touchscreens, video conferencing and digital signage are all helping to make the branch experience a more enjoyable and worthwhile one for customers. Open-plan architecture, retail-inspired design and clearer layouts have made branches more welcoming and easier to navigate.

Although mergers and regulatory action in the wake of the banking crisis could lead to some branch closures, banks will continue to invest in their branch networks, as they are central to restoring trust and confidence in the industry. Consumers increasingly want to access their bank through a variety of channels, including branches.

Amongst the reasons to purchase this report are :-*Learn about the latest trends in bank branch design and strategy.

*Read case studies of providers who are introducing innovative developments into their branch networks, understand what the branch of the future might look like, and what roles it might fulfill.

Table of Contents :

Overview 1

Catalyst 1

Summary 1

Methodology 1

Executive Summary 2

Branches remain a vital communication and distribution channel for banks 2

Branches are increasingly geared towards the sale of complex and advised products 2

Branch design is changing radically 3

A retail-inspired approach to branch design is allowing banks to increase product sales 3

Technology is helping to enrich the customer experience 4

Digital signage can help to boost product sales and reduce boredom while waiting 4

Jyske Bank has put digital signage at the heart of its service proposition 4

Many banks view branch staff as being more vital than ever to their service propositions 5

A number of banks have placed a considerable investment in staff training 5

TD Bank is moving towards offering specialist sales and advice in its branches 5

Banks are taking an increasingly analytical approach to optimizing their branch networks 6

Branch layouts are moving away from a standardized look to one that varies by location 6

Branches remain the most effective channel for building relationships 6

Customers want to access their banks through a variety of channels 6

The branch channel will continue to evolve 6

Banks must rethink the purpose of their branches 7

Banks need to improve the quality of the in-branch experience 7

Table of Contents 8

Table of figures 9

Table of tables 10

Evaluating the customer experience 11

What does customer experience mean? 11

The evolution of customer experience 11

The importance of generating a satisfying customer experience 12

Providers are starting to focus on customer experience management 13

A lack of integration can cost providers dearly 13

Most banks now have in place extensive programs to monitor customer satisfaction 14

Customer loyalty is the key to profitability 14

Customer advocacy is an extremely powerful medium for winning new customers 15

Loyalty and advocacy are closely correlated with profitability and growth 16

Financial providers need to improve the quality of the customer experience they provide 17

There is much room for improvement in the standards of service that banks provide 17

Banks should focus on differentiating their customer experience 18

Emotional attributes are vital to creating a unique experience 18

How a bank handles moments of truth has a disproportionate impact upon the customer experience 18

Creating an attractive customer experience can enable banks to charge a premium for their offering 19

Rethinking the closure of branches 20

Rumors of the death of the branch have been greatly exaggerated 20

Bank branches seemed to be on their way out in the 1990s 20

Banks have been forced to think again about migrating away from the branch 20

Branches remain a vital communication and distribution channel for banks 21

Branches are increasingly geared towards the sale of complex and advised products 22

Regulatory demands are making it increasingly difficult to sell complex products via remote channels 26

Banks are encouraging customers to migrate to remote channels for routine transactions 26

Many consumers remain resistant to the charms of online banking 26

A proportion of online bankers still prefer face-to-face contact with their bank 27

Branches are a valuable channel for attracting retail deposits in the wake of the banking crisis 28

The new face of branch banking 29

Branch design is changing radically 29

A retail-inspired approach to branch design is allowing banks to increase product sales 29

Branch design is helping to reinforce brand image 29

Branches are being tailored to meet the needs of different customer segments 30

New trends in layout are helping to facilitate the customer journey through the branch 31

Zoning is helping to improve the operational efficiency of branches 32

Several banks are pushing ahead with the transformation of the traditional branch 33

Umpqua Bank in Oregon has turned its branches into community hubs 33

Barclays Bank has tailored its branches in response to its customers' needs 34

Lloyds TSB's redesign emphasizes the commitment of each branch to its local community 35

Helm Bank in Colombia is pioneering a multi-sensory approach to brand identity 36

Jyske Bank in Denmark has worked hard to create a welcoming atmosphere 37

Deutsche Bank's Q110 'Bank of the Future' offers a complete retailing experience 38

There can be risks in adopting a retail-led approach to branch design 39

Washington Mutual reverted to a more conventional layout following its takeover by JPMorgan Chase 40

Abbey abandoned its partnership with Costa Coffee after just a few years 41

There is some difference in opinion about the wisdom of abandoning traditional branch design 41

The view on branch design 41

Technology is helping to enrich the customer experience 42

Touchscreens facilitate a more intuitive interaction between bank and customer 42

Barclays Bank is pioneering the use of touchscreen technology in its flagship London Piccadilly branch 42

Umpqua Bank uses touchscreen technology to build customer engagement 43

Touchscreen technology can be used outside a branch to engage the interest of pedestrians 44

Using video links can help create a more personalized experience for customers 44

Umpqua Bank is experimenting with video links to help increase face-to-face contact 45

First Atlantic is also investing in video tellers to improve efficiency 45

ABN Amro is piloting unmanned branches where all communication is conducted remotely 46

There are potential downsides to the use of video technology 47

Increasing levels of automation are contributing to greater operational efficiency 47

BNP Paribas has replaced teller positions with multifunction ATMs in most of its branches 47

Garanti Bank in Turkey has made widespread use of self-service kiosks 47

Sparkassen in Germany has installed movable kiosks in some of its branches 48

Digital signage can help to boost product sales and reduce boredom while waiting 48

Digital signage is highly effective in engaging the attention of customers 49

Bank of America reduced perceived waiting times through the use of digital displays 49

Jyske Bank has put digital signage at the heart of its service proposition 49

Behind-the-scenes technology can also improve the customer experience 50

TD Bank in the US is speeding up transaction processing times through the use of technology 50

The view on the use of technology 51

Many banks view branch staff as being more vital than ever to their service propositions 51

Meeting-and-greeting helps to improve security 51

Changes in branch layout and technology have also necessitated a change in staff function 52

Banks could be doing more to promote product sales through their staff 52

The quality of branch staff has become a marketing tool for banks 52

Changing staff priorities means a change in recruitment criteria 53

A number of banks have placed a considerable investment in staff training 54

Umpqua Bank has placed great emphasis on the quality of service provided by its staff 54

TD Bank is moving towards offering specialist sales and advice in its branches 54

Barclays Bank has resurrected the branch manager 55

Branch opening hours are gradually becoming more customer-friendly 55

The view on the role of branch staff 56

Banks are taking an increasingly analytical approach to optimizing their branch networks 56

Branch network optimization provides a powerful analytical framework for assessing network performance 56

Banks prefer to open branches where there is the greatest number of potential customers 58

Branch location is an important determinant of choice of bank 58

Branch layouts are moving away from a standardized look to one that varies by location 58

The view on branch networks 59

The future of branch banking 60

The branch channel will continue to evolve 60

Branches remain the most effective channel for building relationships 60

Branches can help to target high-value segments 61

Customers want to access their banks through a variety of channels 62

Branches have a role to play in restoring trust and confidence in the banking industry 62

Fallout from the banking crisis may lead to further closures 63

Bank mergers could force more branch closures 63

The decades-long expansion in US bank branch numbers could come to an end 64

Banks with larger branch networks may outperform those with smaller networks 65

Banks must rethink the purpose of their branches 65

Banks need to improve the quality of the in-branch experience 66

APPENDIX 67

Supplementary data 67

Definitions 72

Digital signage 72

Self-service kiosks 72

Methodology 72

Further reading 72

Ask the analyst 73

Our Consultancy 73

Disclaimer 73

For more information please visit :

http://www.aarkstore.com/reports/Branching-Out-Rebuilding-Value-in-the-Branch-Channel-17802.html

by: Aarkstore Enterprise

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