Smart bank branch in the digital age

Globally, banks and financial institutions now process more transactions digitally than through physical presence of customers in branches. Across Bangladesh digital transactions are 1.6 to 5 times more than branch transactions. 

Customer experience is often the deciding factor when it comes to banking. Today's customers want personalised interactions, simplified banking and access to their accounts through technology. Digital tools and channels are changing the banking game, although these innovations have not made bank branches redundant. Branches still remain essential part of the operations, sales and customer advisory function for banks.

Digitisation in branch banking does not only mean online banking, internet banking, mobile banking or paperless banking, rather it is the application of new technologies to transform the existing branch banking business model into a new banking business model. It is a model which will itself produce new customer base, unveil new financial services, ensure faster and seamless services to clients with reduced operational cost, zero error, ease of use and apparently, maximum security.

New technologies have reduced manpower, lower floor space cost and enhanced customer experience for a resulting 60 to 70 per cent boost in branch effectiveness as measured by cost saving and increased sales. Thus, it's a whole new branch banking experience accessed by customers anytime and from anywhere.  

In a traditional branch, 70 per cent of the floor space is used for tellers and other sales and serving areas with 30 per cent dedicated to self-service. Smart bank branches have a significantly smaller and more streamlined footprint and flip the ratio. Employees immediately guide the customers to self-service technology or assist them directly on their electronic devices when customers enter. Except for a few large flagship branches, teller counters and most of the back offices are gone. In their place is a distinctive layout constructed from three building blocks:

a) A self- service area at the entrance of the branch open for 24 hours.

b) A standing-desk zone within the self-service area where bankers can proactively approach customers for sales and assisted services.

c) Customers and businesses can receive premium financial service in a priority lounge for larger branches.

Some banks in Asia have started to adopt elements of this smart-branch model. A digital bank in Indonesia set up Kiosks in high-traffic areas such as shopping malls instead of opening full-fledged branches. These stations are staffed with several employees to help people sign up for accounts or guide them in using their smart phones to execute transactions. Another bank in South East Asia allows customers to queue up digitally at busy branches, sending SMS regarding their place in line. Bangladeshi banks can embrace a lot of each of the three building blocks necessary for full value potential.

SMART- BRANCH TECHNOLOGY: Customers should be able to come into smart branch any time of day or night and get anything they need quickly, from new products like loans or credit cards to service, whether they're in the middle of Dhaka or in a quiet sea town like Cox Bazar. A variety of technology solutions can enable this goal. Next-generation banker tablets give bankers freedom to roam the branch -- much in the way Apple Store employees do -- allowing them to increase sales and provide superior customer service. They are equipped with four critical features.

1. a) Live customer-transparency dashboards alert bankers when customers make transitions at branch machines, like ATMs, so they can offer support or personalised offers.
2. b) Advance customer-relationship management software gives bankers a holistic view of a customer's history with the bank. These platforms use comprehensive customer data and analytics based models to generate real time, next-best-product recommendations.
3. c) Digital sales modules allow bankers to use their tablets to approve customers quickly for any new product, whether a credit card, auto loan, mortgage or deposit account. Documents can be scanned passports read and credit scores accessed.
4. d) Assisted migration modules enable bankers to introduce customers to digital channels for basic services such as money transfers, address and email updates and check cashing.

INTERACTIVE TELLER MACHINES (ITMs): ITMs, a remote connection to a human banker, effectively extend branch hours to 24/7. These machines can function as a "branch-in-a-box" in remote locations. ITMs' main objective is to help less digitally inclined customers feel comfortable with the experience of digital banking both inside and outside of branches (even in shopping malls).

A NEW OPERATING MODEL FOR A NEW SMART BRANCH: The smart branch transformation requires fundamental shifts in how banks think about and support the branch and its employees.  Digital technology should enable migration of more than 90 per cent of simple customer activities to self-service formats instead of an add-on to existing practices. It should power simple, unified, paperless processes for sales and service, and leverage next-generation analytics to deliver personalised offers.

TRANSFORMED ROLES AND CAPABILITIES: All branch employees should be able to address all needs of the customers. These multi-skilled bankers will spend nearly all of their time on targeted, analytics-driven activities with most simple requirements met though self-service tools.

Technology will also be used to train bankers in these higher-value functions. Chat bots can give bankers instant access to information about a bank's latest product offerings and policies as well as details about their own performance metrics. Gamified training videos on tablets can make instruction engaging and efficient.

DIGITAL PERFORMANCE MANAGEMENT: Advanced management dashboards can track read-time branch traffic patterns, to shift resources in a fact-based manner. Branch managers can also get transparency into employee performance through a simplified command centre on their tablets.

Digital technology holds the key to Bangladeshi bank branches of the future far from rendering them obsolete. To reap the full potential, a bank needs to commit fully to smart-branch model and equip its bankers and branches with the tools they need to succeed. 

Md Mohibur Rahman Shaheen is management trainee, Dhaka Bank.

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