When I think of a bank branch, I can’t help thinking of images of Dick Van Dyke singing ‘Fidelity, Fiduciary Bank’ in the film Mary Poppins – a scene which ends with the words “while stand the banks of England, England stands, when fall the banks of England, England falls”. The banking industry is at the very heart of the British economy and as such it will endure the test of time. However, in this digital age, can we really be certain that the banks of the UK will continue to stand physically with branches on our streets?
For some, the answer is clear. Anthony Thomson, the founder of Atom Bank – a bank he positions as Britain’s first ever ‘digital only’ bank – believes that in the future children will be asking their parents what “branches” even meant in the context of banking. However, research (albeit US banks) would seem to be against Mr Thomson in this fact with a Cisco 2012 study finding that 47% of US banking customers believe that a bank is not even legitimate unless it has branches. Not to be outdone, Forrester similarly found that not only are 80% of all current accounts opened in branches, but that 75% of Generation Y customers look to conclude their product purchases in branches.
So, “England” stands - but on what ground?
If branches will endure, then what will they look like in the future?
Barclays bank recently announced that it was expanding its plans to have counter-less branches in which there are no cashiers. Rather, they have envisioned what they call “community bankers” who, armed with iPads, roam the branch assisting customers. Although only 37 of Barclays’ 1,600 UK branches are currently counter-less, even in their more traditional banks, staff will be encouraged to stay in front of the counters.
This shift towards counter-less branches represents the first inevitable step towards a future in which there are no cashiers and no deposit & savings transactions in branches. Instead, branches will be places exclusively for detailed product purchases such as: applying for a bank loan, agreeing dept repayment plans, and dealing with a family member’s estate. What these activities have in common is that they are complex, scenario based activities that can have a large impact on you financially and emotionally as a customer. It is this complexity and its emotional consequences that shall keep these activities free from the grasp of online and mobile channels.
If the future of branches lies in this complexity, without cashiers, branch staff will be expected to be expert professionals. The branch and its technology will reflect this. As exemplified by Barclays’ initiative, banks are starting this shift, something that they have been trying for some time. In fact, some have gone further, with National Australia Bank opening “smart store” branches, the focal points of which are large widescreen tablets that allow “hip-to-hip conversations” with customers. Here, staff will conduct detailed scenario analysis. The options in response to various questions and their respective consequences will be played out in front of the customer.
Banks are probably going to go even further, for example in the branch of the future these floorwalkers could be robots rather than banking staff. Such a step into artificial intelligence may not be far away with Citigroup, Royal Bank of Canada and Australia’s ANZ bank all announcing plans to work with Watson, IBM’s chess playing, Jeopardy winning robot computer in order to help improve their customers’ advisory experiences.
So, in the future, Mr Dawes Senior may well have to intone: “while stand branches in banking, so too stand: floorwalkers, hip to hip conversations, and robots!”