Accenture - in-branch life services, not cash services, are key to digital banking success

Stuart Lauchlan Profile picture for user slauchlan October 5, 2015
Going into the local bank branch is a thing of the past, according to most digital banking theories. Not so, says Accenture, but what happens in branch needs to change.

fintech banking devops
It’s often assumed that digital banking spells the end for the local branch operation. Certainly when we hear about major digital transformation initiatives at major banks, branch closure - or ‘consolidation’ - is usually in there somewhere.

So I was interested in a different view on this from Accenture Strategy, which argues that in the digital world, branch employees will no longer be transaction specialists, but will be a critical workforce.

In a new study - Branching out: The case for the human touch in banking - Accenture argues that banks need to fundamentally re-imagine their branch talent strategies to provide high-touch services that high-value customers will demand.

The report notes that the number of branch visits declined by 6% in 2014, while Accenture Strategy’s 2014 Global Consumer Pulse Research found that of the 17 interactions customers have, on average, with their banks each month, 11 take place online or via other digital channels. So traditional branch-based banking is on the wane, surely? The report concedes:

Branch employees who historically helped customers manage their My Cash transactions are feeling the digital heat. And it’s not only because customers are defecting to other providers. Even customers who have no intention of leaving a bank are simply not using branches as they once did.

But Accenture’s argument is that on the contrary, branches are needed to deliver human-touch services that can’t be provided online. It points out that 34% of customers who switched financial service providers in 2014 did so citing poor or non-personalized customer service.

I’m with the argument up to this point. My own recent experiences of closing down a Lloyds Bank business account is a case in point. The only thing more difficult than opening a small business account with Lloyds appears to be closing a small business account with Lloyds.

Two letters, several phone calls and finally a visit to my local branch where I refused to move from the counter until the account was shut down, was what it took in my case. And then they charged me a fee to do so! (To be fair, they were consistent - I was bailing on the bank because of its poor service, so it was apt that closing the account should also be characterised by poor service.)

Think Life, not Cash

What banks need to do is to shift the focus of branches from My Cash to My Life services, often complex processes such as wealth management, retirement funding and home ownership:

Branches are strong players in this lucrative market. Many customers turn to branches when they need complex financial products, such as mortgages and pension services. Customers’ reliance on branches for My Life services will continue, despite the emergence of online tools such as mortgage calculators and investment trackers. Digital tools provide information, not insights to help customers turn financial information into meaningful action. That’s the domain of highly skilled branch talent.

But there are complications involved. Customers define their relationships with banks as transactional. This needs to be flipped on its head so that the perception is of being relationship-driven. But to fulfil this need, banks are going to have to take a long hard look at their skills base - and almost certainly come to some uncomfortable conclusions, namely that at present the necessary talent isn’t available in-house.

Accenture makes some recommendations here.

(1) Shift the currency of branch talent in order to equip branch employees with skills to communicate the intricacies of complex financial products and identify solutions that match customers’ needs. This means:

moving beyond product mastery and developing active listening and assessment
skills to position themselves as trusted partners who are there to personalize each customer’s selection process. Social skills will also be increasingly important, since advisory services and complex financial products simply don’t spark the same emotional connection as, for example, an iMac might. Branch talent needs to generate excitement among their My Life customers—not about banking services per se, but about the goals and lifestyles that those complex financial instruments will support.

(2) Create personalized branch interactions that bring together customer experiences in the online and offline worlds. Access to digital tools and real-time customer information—and knowing how to use them—will be key to creating a seamless interaction:

Social media and video conferencing, for example, can bring the branch experience into the customer’s home or place of work. While these formats for engaging with customers may not replace a true face-to-face branch encounter, they can go far in building personal relationships and meaningful experiences. Importantly, these remote advisory services will be available to all customers—even those whose local branch employees do not yet have the necessary strategic skills

(3) Treat branch employees like the strategic assets they are. New roles must be supported by new indicators of success, incentives, rewards and talent strategies:

Branch employees who develop the requisite social, digital and advisory skills will enjoy a more satisfying work experience. But that’s not enough. Banks should be willing to compensate them for the strategic role they play and the critical skills they bring to the table.

My take

I wrote recently about my favorable experiences in-branch with Metro Bank, where even though I was experiencing problems, the manner in which they were dealt with meant that annoyance levels were kept to a bare minimum.

Compare and contrast with the Lloyds Bank experience, where the first thing I was told by the desk teller was that I'd have to fill out the same form as I had already filled out and sent off and that there was absolutely nothing she could do to help me in branch.

Turns out she was wrong as she found when I simply refused to move away from the desk until she got on the phone to a colleague and sorted out the problem for me.

Based on the Accenture report, one of those two will thrive in the digital age; one will not.


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