We recently conducted a study to understand the trends, concerns, and drivers of the GCC banking sector. As was expected, the COVID-19 pandemic had dramatically altered banks’ plans and outlook, but it was equally an opportunity to tighten focus on digital transformation and future-ready business models.
As customers, employees, and the world in general sheltered at home, the need to shop, dine, transfer, and invest did not abate, and banks had to overnight ramp up their mobile and online payment capabilities. Continuing mobility, gathering, and distancing regulations have meant that even traditionally digital-averse communities are now on banking websites and apps, and tapping to pay like pros. For banks that were agile, this has been the opportunity – growing their suite of services available digitally, and meeting their customers at their point of need.
This wide-spread digitization, permeating to nearly every area of the bank’s operations, has brought one traditional investment into focus – the bank branch. Is this even required today? Nearly all the respondents to our survey agree that most banks currently have an unsustainable number of branches, but there are no immediate plans to shutter them all. What these branches could look like, the services they offer, and the functions they serve will be very different – sooner rather than later. Old branches do not vanish; they just turn over a new leaf.
Future of bank branches
The question then is not about whether branches need to exist, but what the breadth of services they offer should be. Bank branches are often the only physical experience with a bank brand that the customer has. This human engagement continues to be a major comfort factor in one’s banking experience. There is a generational shift when it comes to a preference for human interaction, but as a way of building trust, facilitating high-value engagement, and serving as a retail-format brand experience, the branch is very much a necessity.
Today’s branches need to be a digitally-enabled total experience centre, and this vision calls for an improved approach to customer data and analytics, which will enable the bank to predict, meet, and exceed their customers’ expectations.
A customer’s experience can be transformed by a) the services and solutions they can access when they need them, b) the behavioural insights that the bank analyses to meet the customer’s demand, and c) the flexibility for each customer to build their own ‘relationship stack’ with the bank, without processes overpowering the practicality. And this is why the ‘total experience’ is so important, and why every brand touchpoint needs to ensure consistency of brand, experience, and message.
Today’s digital customers have become even more savvy and open to moving more of their life, work, and transactions online. Our survey uncovered that banks have condensed an estimated five years’ worth of digital transformation progress into the past 12 months. This is a classic example of big industry sensing a seismic shift and steering itself in position ahead of the customer’s need. In the long-term, this will continue the sector’s move towards future-readiness. In the short-term, it has one important outcome – happy, satisfied customers.
The study, concluded at the end of 2020, covered six main areas: banking and payment branches; mobile and omni-channel; customer data, analysis and segmentation; hybrid working and video; cloud and regulation; fintech and innovation. Respondents included 11 senior executives from banks within GCC countries, representing departments such as Operations, Customer Experience (CX), Risks, Technology and Digital services.
-- Writer is Regional Sales Leader, Avaya