Raheel Ahmed, Group Head of Distribution Channels at Standard Chartered Bank, looks at the changing face of consumer banking and why banks are beginning to think more like retailers.
Remember a few years back when they said that the bank branch was dead? Well, it turns out they were wide of the mark. Internet and mobile banking may have grown and evolved, but the branch is holding its own in the multichannel mix, though its role is changing rapidly.
Unlike yesteryear, customers don’t need to come to the bank for routine transactions. Internet, mobile, ATMs and phone banking can take care of most basic banking needs. This has allowed bank branches to focus more on giving customer advice and selling a wider range of products.
To achieve this refined role and remain relevant to customers, banks are having to think more like retailers. This means making branches much more inviting and tailoring services to customers’ needs. It’s not just about eye-catching features and smart technology; it’s about transforming the entire experience of banking, right from welcoming people with a warm smile.
These days don’t be surprised if your local branch looks more like a Starbucks coffee shop and is open late in the evening and over the weekend to suit you. In future, there will be fewer one size fits all type of branches. Being customer focused, whether you’re a bank or a retailer, means that you have to adapt to what your customers want, when they want it and how they want it.
At Standard Chartered, we’re turning the concept of the traditional branch on its head, starting this year in Singapore, Hong Kong, Korea, Malaysia, Indonesia, Bangladesh and China. In the next generation branches that we have started to roll out across our footprint there are no barriers between us and the customer. The shop front is open, the interior sleek and brightly lit. With WiFi throughout, staff use laptops to serve customers at any desk. Touchscreens let customers browse and email brochures to themselves. They can even use video conferencing to consult with specialists who may not be available at the branch. Meanwhile, automated check-in systems and comfortable waiting areas mean customers avoid the hassle of queuing.
Our customers helped us design this new branch experience. We set up a mock branch in a lab environment in Singapore and invited customers to test it. Based on their feedback we made changes to the design and features before rolling them out to live branches. And we’re not stopping there. Staff are currently piloting iPads and hand-held devices for servicing and presenting information to customers. Meanwhile we’re also looking at ways of using more digital signage and posters in our branches, to improve communication and protect the environment. We’re even trialing signature scents and music, a feature successfully deployed by big names such as Nike and Wal-Mart to improve the customer experience.
Why are we doing this? Against expectation in some quarters in the late 1990s, the branch remains vital in the channel mix. International research by Accenture has suggested that the branch is still the favoured channel for customer interaction, the dominant sales channel for more complex products and the most effective channel for acquiring new customers. Also, trust has taken a completely new meaning in banking relationships since the global financial crisis. More and more customers prefer to see a physical manifestation of the brand that they are dealing with. Our own experience across Asia, Africa and the Middle East strongly supports this.
Technology will evolve and new ways of banking keep emerging. Meanwhile, questions continue to be asked about which delivery channels will prevail. The answer is that all channels will. What’s changing is that more customers will interact with banks seamlessly across multiple channels to fulfill their financial needs. A home buyer wanting to take out a mortgage, for example, may research options online, get details over the phone or through web chat and then walk into the branch to buy the product. This means that banks need to integrate customer experience across channels, not focus on investing in one above the other.
Basic banking needs have not changed: people still have to pay for goods and services, to save and invest, to buy homes and grow their wealth. We know that people bank because they need to. What we must focus on is making the experience simple and convenient — whether through the branch, at the ATM, on the internet or by mobile phone — so that customers can get on with living their lives. Banks are doing this not only by making services available through all channels, but fundamentally by thinking very differently about the customer. The way we see it, banks need to work at fitting into people’s lives, not making them fit into ours.
Everywhere, all the time, technology is opening up new ways for banks to reach customers and enhance their experience. Mobile phone banking is one area witnessing rapid change, spurred by expanding 3G networks and smartphone technology. Breeze, Standard Chartered’s rich mobile banking app, lets customers bank on the go, right down to issuing e-checks from their iPhones or iPads. Already, millions of customers around the world use phones to access mobile banking platforms at a time and place to suit them. In Africa in particular mobile technology is helping millions of people to access banking for the first time.
At Standard Chartered, as we expand our retail banking services, we will put the customer first, not become blinded by the pace of technological change, nor prioritize speed-to-market above security and service quality. At the end of the day, banking is about enabling customers to achieve their ambitions; it’s about helping them to protect and grow their wealth and enhance their life styles. While channels of delivery will change, trust between the bank and the customer will remain pivotal.
As for the branch, we see it changing and adapting to customer needs and preferences but we don’t see it going away. Despite predictions, television did not make cinema redundant because cinema offered an experience television could not. Likewise, online and mobile banking will not make branches redundant as long as branches offer customers an experience and a benefit that no other channel can.