RBR Branch Transformation: Covid-19 drives fast-paced change

By Sunniva Kolostyak

Covid-19 has been a catalyst for the transformation of bank branches, as retail banks look to optimise customer experience through self-service branches and AI, according to panellists at the RBR Branch Transformation conference.

The annual conference from research and consulting firm RBR, this year hosted digitally, hosted almost 1,000 industry professionals looking to optimise their bank branches.

In a presentation, Simon Griffiths, EVP, Head of Core Banking at US bank Citizens, said the pandemic proved that the bank could adapt to changing circumstances much faster than presumed.

According to Citizen’s own Banking Experience Survey, 50 per cent of consumer customers and over 70 per cent of business customers believe that the changes in behaviour driven by Covid-19 could be permanent.

However, human expertise remains critical, as nearly 70 per cent of consumers say they prefer banking digitally, but when receiving advice, over 65 per cent would opt for personal interaction.

“We also see a material shift in personalisation. We know customers consistently are telling us they want personalised insights about their day-to-day banking, and they want those insights to help drive critical decisions,” Griffiths said.

“When I look and think about those changes and the critical inflexion point that I think we are at as an industry, I think about the need to drive change through the customer and the colleague, and really bring the organisation along on that change management journey. As we look at all demographics and all of our customers, it’s going to be absolutely critical.

“We rapidly evolve how we interact and how we create an experience that is relevant for them today, but more importantly, tomorrow.”

In terms of its own branches, Citizens has transitioned from a branch-level approach to a market-driven approach, looking at the intersection between branch planning, digital marketing and capabilities.

It has also been remodelling its design to better utilise smaller spaces, experimenting with digital and cashless branches.

Griffiths added: “In many ways, Covid-19 accelerated our journey. Services sales staffing had to change quickly, and it made us realise is that we could adapt ourselves much more quickly than we realised”

Vincenzo Fiore, CEO and founder of Auriga, added that Covid has not only accelerated transformation, it could also lead to the closure of 25 per cent of European branches in the next three years – equalling 40,000 branches.

However, branch network transformation is part of a long-term trend, he said. “And this has been driven by changing customer expectations. Like our online shopping, we want our banking service to be 24/7, for there to be no delays, for there to be instant gratification in a world that is making banking a frictionless experience that doesn’t hold us back.”

Fiore noted that this is why self-serving branches could succeed, but that we are only at the beginning.

“There is so much more to do,” he stated. “The next-generation branch may be smaller in number and scale but they will be smarter, more customer-oriented and better located.”

“For the branch networks, AI and machine learning will be gradually adopted more, AI will step up and be used to do more repeatable processes. You will also see more use of AI to predict problems; this can be forecasting cash storage much earlier or planning predictive maintenance that pre-empts an outage and stops unnecessary shutdown. This will be an exciting time for branch transformation,” Fiore said.