Deloitte estimates that a further 20 million customers will take up banking services and consequently banks will focus on developing mobile banking to compete for new customers. Banks are expected to move away from cost cutting strategies and invest more in IT to capture new customers.
As banks continue to focus on mobile banking innovations, what does this mean for branches?
There is much debate as to whether mobile banking signals the end for branches. Bain and Company don't think so and I agree. Research by BT Global Services demonstrates that branches remain the most trusted and preferred channel for many as people need a certain amount of human interaction and want to put a face to 'who' has their money. However, as mobile banking continues to develop, adoption rates increase and customers' security concerns diminish, trust levels for mobile banking is likely to rise and this will impact on the banking channels used by customers. Think about it. 'Who' do you want to speak to when you are annoyed or have a question - definitely not a computer!
However, as further mobile banking innovations are introduced, we should expect to see increasingly less reliance on branches. At the moment, many banks are offering basic mobile banking features such as the ability to check account balances and transfer money which helps reduce the number of people visiting branches as they are able to complete basic transactions themselves. However, demand for more advanced technology is growing as customers seek more control over the management of their finances such as imaging for cheque deposits using their smartphone. This means that customers won’t have to visit a branch and wait in line to deposit a cheque – they can do it instantly with the touch of a button! But the fact remains, branches are unlikely to disappear as customers will, at some point, seek face to face interaction.
The role of branches and the functions they carry out on the other hand is very likely to change. Bain and company state banks must change from dealing with costly routine inquiries to high value inquiries. This makes sense as customers are increasingly able to carry out routine activities themselves and this will allow banks to reduce costs. In order for branches to remain relevant, useful and achieve optimal productivity as channels such as mobile banking continue to seek dominance, banks must review the role branches perform.
Celent research looked at different ways banks are changing their branches in light of recent technology changes such as mobile banking. Banks are increasingly empowering customers to use technology to assist with services rather than requiring them to go to a branch. One bank mentioned that customers are able to open a credit card from their mobile or book an appointment with a member of staff at a branch using their mobile. One of the key themes was to view each channel as a host of ways to reach customers and ensure consistency across all. This allows customers to contact a bank using a contact channel that suits them, and allows branches to become more focused on helping deal with more complicated inquiries, offer information and focus more on a sales approach.
Banks are increasingly reviewing their infrastructure and rethinking the purpose and role of branches. SunTrust Bank in the US is closing a number of branches after customers began using other channels such as mobile and online banking, helping them cut costs significantly. CEO and Chairman William Henry Rogers also agrees that branches still have an important role to play and will not disappear, stating, “They’re still where most new products are sold and where clients typically go to resolve a problem. So while the role of the branch may be changing, they remain a key sales and service distribution channel.”
To find out more about how mobile banking can help your financial firm reap benefits such as reduced costs, higher customer loyalty and new customers (to name a few) please visit our Solution Planner
follow us on LinkedIn, Twitter @hslmobile or Google+
or call us on +44 (0)1506 605260
or email us at sales@haysystems.com
