Equinox Consulting

Mobilise the Bank! Step 1: Fewer Footfalls = Fewer Branches?

Jean Bouvier at 2015-09-10 in Décryptage

Mobilise the Bank!

A thought-provoking title in anticipation for our management book, « Faites bouger la banque ! » (Mobilise the bank), coming soon at the end of September 2015.

In this book, Equinox-Cognizant experts examine the HR-related impacts resulting from a rationalised retail-banking model.

A new distribution model, in which the branch continues to act as a powerful relational channel, however not in a prominent way as in the past, and with a much more cautious outlook towards the cost-benefit ratio of maintaining a high-density local network.

Faites bouger la banque 2Illustration credits: Gabs for Equinox – Cognizant, 2015

A new relational model, built around omni-channel customer journeys, analytical and predictive marketing actions, allowing greater flexibility to the customer for interactions with the bank, and for calling advisers and experts whenever needed.

A new managerial model where a numbers-driven sales approach (how many customers in store, how many products sold, how much net outstanding) is coupled with a « how-to » sales steering (how to greet, how to listen to your customer, and how to better satisfy your customer’s expectations by offering the right solutions at the right time through the appropriate channel).

Finally, a new employee skills repository, for both branch network and support function employees, as all new approaches associated with the advancing digital revolution need to be mastered now on a day-to-day basis. When it is observed that pro-activity on outgoing calls to prospects and customers instigates so much inhibition and stress among branch advisers, a lot remains to be done to familiarise them and to make them fully efficient in the use of digital customer relationship tools.


 

Find out more in this extract from our book:

« […] for decades, banks observed a strong correlation between the development of their network and their market share. So they were interested in maintaining a high number of sales advisers in branch, and increasing the number of points of sale throughout France.

Trends in the number of bank branches in France per 100,000 inhabitants (1999-2009 trends)

Faites bouger la banque Acte 1-2Source: « L’avenir des réseaux bancaires en France » (The future of banking networks in France), a study by Equinox-Cognizant and EFMA, 2013

But the correlation between the network density and market share has weakened in the last years with simultaneously:

  • A decline in branch footfall, especially due to increased use of e-banking and m-banking. In 2013, 17% of the French stated visiting their local branch several times a month, as against 21% in 2012 and 52% in 2010 (IFOP [French Institute of Public Opinion] survey commissioned by FBF [French Banking Federation]).

Faites bouger la banque Acte 1-3Illustration credits: Gabs for Equinox – Cognizant, 2015

  • A decline in branch profitability, to the point where a significant number of points of sale will stop being cost-effective in the coming years.

Thus, within a decade, one-third of the rural branches could disappear.

Some of the constant organisational challenges include: revising the skills map and boosting the specialisation of branches for each LOB, while taking the profiles of their customers into account, and therefore, extensively adapting the human resource management. This in turn means training the associates in CRM approach essentials and in judicious use of contact channels, encouraging functional or geographical mobility of advisers, and overcoming the « crisis » affecting the vocations of local managerial functions.

With 60% of advisers in France having a post-graduate diploma, as against less than 25% in Italy or in Spain, the French banks have a clear edge to move towards new businesses and new practices.

Faites bouger la banque Acte 1Illustration credits: Gabs for Equinox – Cognizant, 2015

With internet becoming part of everyday life, and with the emergence of new digital ecosystems and new services through smartphone, the transition towards online banking is particularly accelerated. Knowing that adapting a local network takes up to 5 years to be fully functional, all banks now need to make a choice. These decisions will be even more delicate for mutual banks, whose network density in rural or semi-rural settings entails even more optimisation constraints. […]”

Find out more in « Step 2 – Fewer branches = fewer counters, more advisory services » coming next on September 15!

 

Jean Bouvier  Jean

Partner

Digital, Retail and SFS

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