Far from becoming a rarity, branches are being renewed and made more welcoming, as banks accept that is what customers want. Susana Fernández Caro reports.The bank branch is alive. And kicking. The dot.com boom in the late 1990s was deemed by many as a death threat to bank branches, whose number was forecast to be reduced. But the small number of e-illiterate customers proved to be reluctant to use the new electronic distribution channels. Money is conservative and so are its owners. Banks now know that customers refuse to conduct complex operations like obtaining a mortgage or picking a pension by phone or internet. Face-to-face interaction is still highly regarded by customers and the obvious place for a bank to offer it is still the branch.
Adding pleasure
Charlie Rohan, head of design at NCR Financial Solutions, says: “Banks want to make the visit to the branch a pleasurable experience. The aim is making clients feel comfortable and make them stay longer.” Pampering customers starts with warming up the atmosphere at the branch.
BRE Bank, one of the leading commercial and private banks in Poland has launched MultiBank, the first virtual retail bank in the country. The challenge was not small, since the Polish society is still highly cash based, but it seems to have worked as MultiBank launched the project in September 2001 and a full roll-out of the new branch concept is now in progress.
NCR, which assisted BRE Bank in the branch design, highlights the use of modern technologies without losing the human touch as MultiBank’s main goal. This was achieved through friendly decoration and elimination of the barriers between tellers and clients. Since safety is a key issue, Multibank’s cash handling from the ATMs is secured both from customer and teller access.
Another endemic problem identified in the Polish market was the waiting lines in branches. MultiBank hosts a residential waiting area, where customers can sit, have coffee and browse product brochures. But shifting clients from one area of the branch to another is not a solution in itself, so customer education and migration from high-cost to low-cost channels (that is, from the counter to the ATM) became an essential part of the project.
Cutting waiting times
A similar approach has been adopted by Bancaja, the fourth largest Spanish savings bank. The waiting lines in the 300 branches in the city of Valencia, where Bancaja is headquartered, had become a headache for the management. So they decided to implement a pilot scheme (Queues Project) to tackle the problem and at the same time have employees devoting more time to sales and less to low-value counter service operations. Staff were trained to inform and persuade customers to use ATMs for cash withdrawals and statement checking, giving them demonstrations on ATMs installed in the branch.
Also electricity and water companies were encouraged to put bar codes on their bills so that customers could make their payments through ATMs instead of at the counter. Now only 1% of these payments are carried out at the counter, against 20% before implementing the new strategy.
“The main obstacle was customers’ fear to use ATMs, that is, to change,” says Amador Cańizares, quality manager at Bancaja. At Bancaja eight million transactions a year have shifted to ATMs but the total increase amounts to 10 million transactions, which means that “the project has had the additional positive effect of stimulating the general use of ATMs”, according to Mr Cańizares. The bank conducted a survey among customers after implementing the project, which showed that satisfaction with waiting times had increased substantially. Bancaja invested E6.6m in the project.
Improving performance
SpareBank 1 Vest, Norway’s fourth largest savings bank, also had in mind the combination of technology and sales drive to improve the performance of its branches. NCR designed the project and SpareBank invested $650,000. A few months after the pilot branch was opened, sales had increased and the peak waiting time had been reduced from 50 minutes to less than 10 minutes.
The branch not only seems unwilling to die but quite determined to gain in importance. A recent report by technology consultants Datamonitor forecasts that by 2005 it expects to see “19% of Europe’s bank branches renewed against less than 1% in 2002.”
