The way that banks look at solutions has completely shifted. In the past, the branch was driven by trained staff, supported by software-enabled hardware. As digital technology continues to evolve at its momentous pace, we now see a situation where next-generation software solutions (enabled by hardware) lead the offering, supported by staff focused on consumer experience.
But what does this look like in practice? In a nutshell, there will be a noticeable decline in the dominance of the traditional branch. In its wake, we will see the development of branch networks comprising of various combinations of physical and digital capabilities (or ‘phygital’) – depending on the need of the demographic that each site serves.
This means fewer tellers, for example, as staff are re-trained and re-assigned to take on relationship roles, instead of simply facilitating transactions. Branches will either shrink – supported by online capabilities and, therefore, needing less space – or expand into flagship offerings all about connecting with consumers at a brand level. In general, technology will continue to lead us towards more experience-focused, relationship-managing fulfilment centres.
This shift to phygital is not exclusive to banking. In fact, the banking sector is taking lead from the retail space, which has created a consumer who views their demands for convenience and control as standard, not nice-to-have extras. In this world of instant gratification, brought about by the digital age, consumers – and ultimately, accountholders – expect services to be seamless and simple. The smartphone has also created an expectation: today we want to do everything on the go.
It’s clear that banks can no longer rest on outdated strategies for their branches. But the evolution for banks has not been as swift as it was in the worlds of entertainment and commerce, which don’t deal with the same regulatory framework that financial institutions do.
Regardless, banks that don’t move fast will be left behind by competitors who offer a better omnichannel experience, decreasing customer frustration and improving brand loyalty. It has never been easier to switch banks. So, it is crucial for tomorrow’s banking leader to throw off a perception of being bureaucratic, in favour of an attitude of agility.
For example: don’t you hate it when you have to repeat the same story from person to person. The phygital branch of the future is focused on eliminating bottlenecks of irritation and unnecessary hassle. We see this starting to happen here in South Africa. Just look at an institution such as Nedbank – you can now collect your card from automated lockers meaning you are no longer limited to restrictive business hours. We’ll see more and more of these kinds of solutions.
Fortunately, banks have an incredible asset in their journey from then to now: data. Data is an incredible tool – and banks have a lot of it – to enable banking networks to adapt and react to the needs of the people they serve. One size fits all just doesn’t cut it anymore.
Each site needs to be customised to its purpose. Some branches may be a flagship, while others could be pop-ups to drive sales or smaller, digital-first branches. This is where business intelligence and data analytics are the bank’s best friend.
Banks should feel encouraged by the opportunity in front of them. It’s time to reinvent the wheel because the road is no longer physical, nor is it totally digital either – the road to tomorrow is phygital and requires a whole new way of thinking to move forward.
Altron Managed Solutions
1 Vlak Street, Selby Ext. 5, 2092, Gauteng,
PO Box 3591, Johannesburg, 2000,
Gauteng, South Africa
+27 (11) 373 4000