Pub. 1 2013 Issue 2

spring 2013 7 Going forward, banks should determine how to transform their physical branch network to: - Align with interaction preferences and expectations of consumers and small business clients in the local market - Provide consultative sales and personalized service - Direct the highest value-add service to the branch, thereby increasing “right” channel interaction - Reduce operating costs by revisiting their footprint and considering lower cost branch models The future of brick and mortar bank branches be able to thrive in their traditional form. Evolving the branch network to align with changing consumer and economic realities may help banks boost revenues and ROI and position themselves for the future. Many banks are responding to the changing marketplace by piloting forward-looking initiatives designed to transform branches and increase branch revenue and ROI. Leading banks are moving away from “managing branches” and instead are “managing distribution” across all of the bank’s channels. In today’s business environment where customers seek convenience in many transactions, one of the most critical of these areas may be developing a cohe- sive and complimentary multi-channel distribution strategy -- including digital, face-to-face, and voice with ATMs and branches. Establishing an array of oppor- tunities, where each customer can interact and conduct business based on their own preferences, will help to maximize revenue and profits for the whole bank, including the branch network. Additionally, leading banks balance cus- tomer needs, revenue opportunities, and cost to determine the right mix of branch models. They are considering and adopt- ing a mix of five emerging models. Each model aligns to the target customers in key markets where the bank has a significant client base, an approach that increases the bank’s geographic relevance and balances customer needs, revenue opportunities, and cost to achieve ROI growth. The five emerging models include: Assisted self-service branches These branches cater to retail and small business customers on the go with high- function kiosks—some of which may be video-enabled. Only one employee is needed on-site to assist with kiosk functionality. In-store and corporate branches Often located in grocery stores and cor- porate office buildings, these streamlined branches provide convenient access for busy customers who want simple transactions and account sales where they shop and work. Full-service branches Full-service branches provide one-stop banking (sales and service) to retail and small business customers who prefer privacy and face-to-face interactions. There will likely be fewer full-service branches in the future. Those that remain will be tech- nologically advanced with features such as video capabilities, back-office automation, and re-configured office designs to better balance transactions and relationship build- ing and sales. Community centers With a smaller footprint than traditional branches, community centers provide a customized experience based on the local community they serve. Employees know their customers by name, are engaged in community events, and even host network- ing sessions, supporting local businesses at the branch. Flagship stores These deliver sales and advisory expertise while showcasing emerging capabilities to sophisticated customers. Flagship stores are characterized by their modern look & feel, greater square footage, hi-tech displays and access to consultants and experts who can help clients address their complex financial needs. Not all models work for all banks. Adopt- ing a combination of branch models based on target customer segments in the local market as well as the bank’s strategic goals may be the most effective strategy for many banks. For instance, in areas with a digitally savvy, high-net-worth demographic, banks should consider opening a f lagship store to showcase emerging technological capabilities,  Rebooting — continued on page 8