Can retail bank branch survive the impact of COVID 19?
The banking sector has been scourged due to the ongoing pandemic. Both public and private sector banks are at the receiving end of the novel COVID 19 outbreak. It’s true that global banking operations stalled and bore the maximum brunt in the retail banking experience. Surely, the banking branches remained close to follow the social distancing norms for thwarting COVID 19 infection. And somehow, with the changing economic and financial landscape, customers became weary of their choices, especially related to investments and loans.
In the pre-pandemic world, the traditional branching model was discerned to be successful in retaining the bank economy. Now, as the operations in branches are on hold, the bank economy is influenced significantly. With everything that is going on, some challenging questions are faced by industry leaders. Can the retail bank branches be revived in the post-pandemic era? Can the operations in these branches be restored? True, the current picture is vague, hazy, and scary, with the parochial possibility of restoring the bank branches. But this doesn’t mean that we have reached the end of branch experience.
The pandemic has given enough space to the industry leaders to ponder upon remodeling the banking branches. While some global banks reckoned structural remodeling and digital transformation before COVID 19 outbreak, many banks at the regional level did not recognize the bank branch transformation.
Thanks to the pandemic, the industry leaders are taking into cognizance banking transformation at a branch level. In this article, we will observe some remodeling strategies that can help to revive banks at the branch level.
Moving forward with Compassion and Empathy
In this uncertain time, when many economies are re-opening, the anxious investment and decisions by customers will be natural. While approaching a branch, amid the sweltering effect on the economy, the riveting conversation about safe investments are bound to happen in the four walls of bank branches. The customers will look out for safe investment measures, do a lot of research, and seek an inexpensive model with supreme return in investments. The buyer will seek advice and recommendations from the most trusted channels, i.e., banks, to help them through the query. A Mckinsey Insight report says that personalization, empathy, and connection will be the leading factors for restoring banking operations. The way a branch staff interact and respond will maintain trust amongst the customers. Moreover, the branch experience’s quality would be a leading factor in deciding the fate of customer-relationship in regional branches.
Strategic Roles by Bank Leaders
The behavior and experience of a branch staff indeed reflect the functioning of the bank. But this must not apply to all the case scenarios. In certain situations, the strategic behavior of the banking leaders such as Vice President, President, CFO and CEO, adds more value to maintain the regional banking operations. These bank associates would need to re-evaluate their existing strategy, look out for loopholes thwarting operations at the regional level and analyze their priority for improved performance. The bank associates would require to engage in retooling, redeploying, and retraining staff to create higher-value services and products.
Digitizing the Branches
Not every bank branch at the regional level is integrated with technology. Though some branches are functioning much better by leveraged artificial intelligence and its subset in operations, the same doesn’t hold for others. Many are still overwhelmed with challenges that can be overcome with technologies.
Technological innovations assist in sharing the human workload. With the help of AI, humans can focus on tasks that require a human skillset. Moreover, most customers still need physical assurance and consultative assurance regarding investments and loans. As COVID 19 doesn’t allow physical interaction between the customers and bank employees, employing tablets to open an account, activating a debit card or online bank account, will save customers’ return trips to complete an application.
Digital transformation is the first step for remodeling at the branch level. The organizations must consider this strategy for branch transformation.
New Products and Services
Any business operations thrive with new products. Banking is no different. Customers are easily lured with new product offerings and have a higher probability of trying out the new services. That’s why the bank branches must consider what products they can use to improve customer engagement? Or how the customers can be satisfied? A report by Accenture states that 20 largest global banks have paid more than US$327 billion in fines for mis-selling financial products since 2012. Taking an online survey will provide insight into customer preferences. Data analytics will highlight key areas that demand new products and services and can receive a positive outcome.
Remodeling a bank branch is not impossible. During the process, failures are inevitable, but the strategic approach can give a fair chance for bank branches to survive.