Equinox Consulting

Mobilise the bank! Step 2: Fewer branches = fewer counters, more advisory services

Jean Bouvier at 2015-09-15 in Décryptage

Today, we bring you a new excerpt from « Faites bouger la banque !” [Mobilise the bank!], our management book to be published end of September 2015, in which Equinox-Cognizant experts examine the HR-related impacts resulting from a rationalised retail-banking model.


Find out more in this extract from our book:

In all European bank networks, the rise of self-service has resulted in transferring the low-added value tasks towards the customer. The customer no longer requires any « human interface » to withdraw money from an ATM, to execute a bank transfer or to subscribe to a new product online. In the late 1990s, French banks braced this trend by deploying multi-purpose ATMs that served as gateways to the branch’s reception and advisory service area. Main disadvantage, this wall of automated machines serving as reception has further contributed in distancing the customers from the advisers. A banker states: « it is however paradoxical that after having done everything to make the customer independent through Self-service banking, our profession puts forth so much of energy and investments to make the customer return to the branch!« . In their strategic plans, some banks even project that 80% of customer journeys will be digitised in the medium term, which signifies that a majority of the interactions with the bank will happen through a digital channel.

Already, increased use of self-service banking has led to quasi-disappearance of the profession of bank teller now turned into receptionist or sales assistant. Some regional banks go further by removing the reception service altogether. This responsibility is then distributed between all the sales representatives of the point of sale, requiring the adaptation of the premises layout and merchandising.

 

Faites bouger la banque Acte 2-1Illustration credits: Gabs for Equinox – Cognizant, 2015

Similarly, starting from the 90s, the French banks transferred some of the phone calls intended for branches towards call centers. On the one hand, this meant improvement in adviser’s sales productivity by giving them more time to devote to customer appointments. On the other hand, it translated to decline in call hold time that the customers had to bear before being attended to. Subsequently, these large centralised call centers were entrusted with outbound calling campaigns, and later with handling higher added value request calls such as stock exchange order taking, examination of consumer loan requests or sale of non-life insurance policies.

This system has however generated negative effects. Thus, three out of four calls received at the call centers were forwarded to the branch or converted into branch appointment. On the customer satisfaction scale, the results were not particularly encouraging. Processing of calls was quicker but the customers were complaining of a loss of direct relational line with the branch advisers. Further, the customers had to re-explain their individual case on each call, owing to rotation of customer relationship center agents. As a consequence, banks have eventually taken a step backwards to enable customers to directly contact their branch adviser.

 

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

[…] Since 2010, branch re-organisation continues with another perspective as the branches need to be regrouped at the regional level by skills cluster: satellite branches focus on customer relationship and a reduced range of offerings. Only the main branch on which these satellite branches depend covers all the skills, especially asset management services and advisory services to professionals. Within their region, advisers with expertise on such subjects either travel to small branches for appointments or manage such requests remotely.

The adaptation of networks also requires restructuring the branch model. Thus, relieved of cash processing, the « bunker-branches » keep alive the POS spirit with a largely open street access, and provision of technology tools like tablets or interactive terminals which increase the value proposition of face-to-face advisory services.

[…] The reorganisation of networks finally raises the question of refocusing on the core business, i.e. banking and insurance. This trend is seen across Europe. In fact, the return on investment of portfolio diversification has not been convincing in almost any European country where such attempts were made. The continuous extension of the range of offerings for more than twenty years has been causing real problems in terms of field synergies and assimilation. It increases the cost of training and maintaining skills and makes it impossible to have 100% expertise on all essential banking products at the points of sale. As they say, do not bite off more than you can chew.

Find out more in « Step 3: more advisory services = more coaching (for more sales) », coming up next on September 17

 

Jean Bouvier   Jean

Partner

Digital, Retail and SFS

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