Customers’ expectations about what they need from a branch are shifting rapidly. How institutions approach this transformation will make or break them throughout the next decade.
In a new PlanScape report from IDC Financial Insights, How to Make the Retail Bank Branch the Face of the Digital Transformation (Doc #US40147616), offers a blueprint for a branch transformation project to assist financial institutions on this journey.
IDC Financial Insights estimates that by 2019 total IT spending by financial institutions worldwide will exceed $310 billion. IT services will make up one-third of that spending and much of these services will be spent on transforming the institution into digital platforms. In fact, specific to the branch channel, almost $20 billion will be spent worldwide.
With such a large investment to be committed to remaking the branch network, banks must judiciously plan to make investments and understand each phase of the transformation as it pertains to any individual banks’ business priorities.
According to IDC Financial Insights, the most important concept to consider when discussing digital transformation at the branch level is recognizing the need to correspond with the customers’ (and employees’) digital lifestyle. This could mean opt-in tracking of consumers’ handheld devices as a way of offering a differentiated concierge service when they walk into the branch, or possibly enabling financial advisors to visit wealth management customers at their homes, carrying the near-full capability of the branch with them.
IDC Financial Insights research director of consumer banking engagement strategies Marc DeCastro said: "The challenges faced by banks when it comes to transforming their bank branches from a transaction center into a sales center have been a continuous obstacle for many years.
"But the time has arrived when the technology required to truly transform the branch has reached a point where the benefits can no longer be ignored. The end result of transforming the branch will be when the right mix of technology and personnel allows the bank to immediately engage with the customer, as opposed to the customer engaging with the bank, and both the customer and the institution can mutually reap the benefits."
IDC Financial Insights believes that there are five key milestones that must be followed to help facilitate the process in order to achieve optimal results:
Audit the existing branch network.
Benchmark and measure key performance indicators for the branch network.
Assess the various technology solutions that adhere to the strategic direction of the organization, as well as, IT and business units.
Once a new solution has been identified, and due diligence completed, then the implementation of the new system, inclusive of any workflow modifications, will need to be carefully deployed.
When the system has had a chance to work out any bugs and be implemented on a larger scale, there is likely to be opportunities for refining and making modifications.
