Over the past decade we have seen a rapid decline in role the branch plays in deliverying financial services. In his article: Are We Seeing the Demise of Physical Banking? Bank 2.0 Author, Brett King outlines that in 2011, Bank of America announced it was closing up to 10% of its branches (up to 600 possible closures), HSBC USA said it was selling off 195 branches to First Niagara, and as JPMorgan Chase digested the acquisition of Washington Mutual, we saw 300 branches go the way of the dodo. Added to these closure, activity levels across the globe in branches is also in decline.
If you listening to executives of the large incumbent banks today, they'll tell you "Customers want Branches for a personal human connection, they want someone to talk to." On the surface the theory sounds reasonable. But in recent months, I've had to visit bank branches several times, during which I made some interesting observations which triggered an ongoing curiosity. So I started an experiment. I visited branches in Singapore, Hong Kong and New York to ask some questions that I thought needed a human touch: Challenging A Fee On My Account, Financing A Small Business and Moving My Investments from Singapore to New York. What I found was surprising.
In 100% of cases the service staff in the branch were unable to service my requirements without referring to someone or a system that was outside of the branch. Every time my inquiry has to be raised for 'review' by either risk or complaint departments which would take several days. Which got me thinking? Aren't branches meant to deliver a personal experience? How it needing to raise a service request to remote or back office team a 'personal experience'?
In reflection I realised that a large majority of the staff in bank branches are disempowered by internal controls, policies and systems. So instead of a fee correction decision being made in branch for the benefit of creating a personal service experience, the decision is extracted to the same back office teams that would make the decision if I called through the call centre. How is that personsal?
If banks are going to cling to the ideology that branches provide superior personal experience, they need to ensure their systems and controls allow for the empowerment of the people that have to face the customer. In a world were real time systems, analytics and insight engines are powering the likes of Amazon, Facebook, Zappos and Best Buy, bank need to lift their game. Otherwise the very thing that pour the most about of spend into, will become an empty promise.