Bank branch closures – lessons from Europe’s banks

Bank branch closures – lessons from Europe’s banks

With more bank branch closures recently announced by some of the high street’s biggest names, Auriga is urging banks not to miss a trick when it comes to rethinking their…

With more bank branch closures recently announced by some of the high street’s biggest names, Auriga is urging banks not to miss a trick when it comes to rethinking their branch networks and to look at how banks in the rest of Europe are transforming their branches.

It is no secret that retail banking is under pressure and that many banks have been forced to close branches. However, those that fail to invest correctly in their remaining branches are missing out on revenue-boosting opportunities via alternative branch formats that could drive footfall back. Major players also may be failing to keep up with their European counterparts who are embracing technology and reaping the rewards of digital transformation.

The key thing for banks here is to strike the right balance between digital and physical service. This is about embracing new technology, but not at the expense of the human touch and personalisation. Banks in many other European countries are already remodelling their branch format around an in-branch customer digital experience zone, where customers can perform a wider variety of self-service tasks, while also being able to consult with trained bank staff.

What are the main lessons from Europe’s banks?

Community spaces

One key trend for European banks is offering space for the community to meet. Many offer inviting lounges, private meeting areas, free Wi-Fi, phone and laptop charging points and spaces for community events and meetings. Local people can then use them to interact with local business, charities and arts organisations. Some are even helping young jobseekers network with employers.

Educational zones

Another is the creation of zones that inform and educate customers on bank services and allow them to better understand the benefits that can be offered. This could mean specialised areas in which bank staff help older customers get up to speed with online banking. It could also include the provisioning of a children’s zone to offer advice on budgeting or training on the importance of savings with games and videos. All of this helps banks offer more inclusive and accessible environments that provide useful services people want.

Digital branches

Many of Europe’s banks integrate technology into the heart of their branches to improve the customer experience. Transforming branches digitally could be as simple as enabling free Wi-Fi and giving people access to in-branch laptops, tablets and mobile devices, or offering more innovative technology such as assisted self-service terminals.

Welcoming environments

Offering an environment that people actively want to enter and spend time in is also key to a successful bank branch. Banks can improve the customer experience by offering frictionless self-service technology, ensuring staff are on hand to help for those preferring to talk to someone in person and providing spaces that are organised logically and are easy to navigate. Most European banks have a central welcome point, where staff armed with portable devices like tablets or smartphones can readily assist customers. Bank tellers communicate with customers at desks and in private booths rather than behind glass panels to offer the most welcoming environment possible.

How can the success of European banks be replicated in the UK?

Banks need to think creatively about the space within their branches. We have already seen everything from coffee shops to community meeting spaces for hire, and hosting complementary services like real estate agencies also makes optimum use of the otherwise redundant space.

Some banks have already made progress in differentiating their offer and realising the potential of the physical bank branch in terms of growth, for example Halifax, which is adopting a model we’ve seen banks in other parts of Europe use to their and their customers’ advantage.

Halifax’s new flagship branch on Oxford Street, London, features a real estate section, a section for social enterprise, a travel area and a kids area, making it a truly inclusive environment and destination for a variety of consumers, no matter their life stage. It also boasts the Halifax ‘Kitchen’ café to increase dwell time in-branch, provide a venue for events and make the experience of visiting banks more relaxed and enjoyable.

We’ve also seen an earlier announcement from Lloyds about its £3m state-of-the-art branch format in Manchester, which includes a digital zone for helping consumers with internet banking, biometric fingerprint Safe Deposit technology and free Wi-Fi and mobile phone charging.

There are also cases of banks collaborating with local councils as well as providing healthcare, entrepreneurship and other social services. Of course, adding in these new sections does rely on continued investment and input, but it provides banks with an opportunity to maintain momentum and differentiation as well as, protect their investment and ensure they maximise consumer choice of services.

These new physical branch formats are enabled by digital technologies that make in-branch an integral part of the overall omnichannel experience and showcase the various possibilities for the future of consumer finance. Banks must be able to quickly roll out successful formats by ensuring that technological limitations and siloes don’t get in the way. They should also consider carefully what their customers want by employing analytical tools to measure the effectiveness and uptake of new channels and services before roll-out. British bank branches still hold huge potential, and only poor choices, including the technology behind the channel (such as not choosing vendor-independent software) can lead to a failure to realise it.

While the trend of branch closures is likely to continue over the year, the role of the bank branch in customer engagement is going to become clearer.  Branch networks will get smaller, but there is going to be investment in making the remaining branches much smarter and appealing to customers. Increased investment into automation and customer experience will drive convergence between different banking channels, helping to create a seamless customer journey.

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