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Friday, September 21, 2018

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Opinion > Auriga

Learning from European bank branches

Mark Aldred, banking specialist at Auriga | 16:58 Wednesday 5th September 2018

With more bank branch closures recently announced by some of the high street’s biggest names, it is no secret that retail banking is under pressure.

Those that fail to invest correctly in their remaining branches are missing out on revenue-boosting opportunities via alternative branch formats.

Auriga is urging UK banks to follow the examples of their European counterparts and reap the rewards of digital transformation.

Examples from Europe’s banks

Millennium BCP, Portugal: offers ‘digital experience zones’, where assisted self-service terminals – dubbed ‘millennium teller machines’ – have replaced conventional devices.

Cariparma (part of Credit Agricole’s Group), Italy: has adopted a ‘hybrid’ bank branch approach, which embraces the adoption of self-service devices. It also provides spaces for community events.

Intesa Sanpaolo, Italy: provides a welcoming and well-organised environment, including ancillary services for the customer and community. Visitors may access tablets and free Wi-Fi.

UBI BANCA, Italy: transformed its bank branch to create a more meaningful experience and optimised the self-service channel by combining sleek design with new technologies.

How can the success of European banks be replicated in the UK?

Some UK banks have already made progress in realising the potential of the physical bank branch in terms of growth, for example, Halifax. Its new flagship branch on Oxford Street, London, features the Halifax ‘kitchen’ café, which increases dwell time in-branch and makes for a more relaxed and enjoyable experience.

Lloyds has also launched a £3m state-of-the-art branch, which includes a digital zone helping consumers with internet banking, biometric safe deposit technology and free Wi-Fi and phone charging.

While new sections within the transformed branches may rely on continued investment, they allow banks to maintain differentiation and maximise consumer choice.

These new branch formats, enabled by digital technologies, make in-branch an integral part of the overall omnichannel experience and showcase the various possibilities for the future of consumer finance. UK banks should be striking a balance between customers being able to perform a wider variety of self-service tasks, while also being able to consult with trained staff. They must be able to quickly roll out successful formats, ensuring that technological limitations and siloes don’t get in the way.

Banks should also measure the effectiveness and uptake of new channels and services before roll-out through analytics. British bank branches hold huge potential, and only poor choices, including the technology behind the channel (such as not choosing vendor-independent software) can lead to a failure to realise it.

While the trend of branch closures is likely to continue over the year, the role of the bank branch in customer engagement will become clearer. Increased investment into automation and customer experience will drive convergence between different banking channels, helping to create a seamless customer journey.

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