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Relationships, Retail, Customers and CommunityHow the agile branch re-imagines the banking customer experience

#TheAgileBank

THE AGILE BANK SERIES

The branch should be different

Disruptive market forces are changing the role of the bank branch, and with it, blurring the direct line between branch share and market share. As banks reinvent a network they can no longer sustain, one thing is clear: The branch is not dead, but it should be different.

2 ACCENTURE AGILE BANK SERIES

Breaking the branch moldThe branch network is a significant investment. Accenture experience reveals that distribution costs typically represent 50 to 70 percent of traditional retail banks’ cost base—including 20 percent for tellers. Leveraging digital to improve the cost structure is critical to reduce costs and expand market share. But how?

Closing branches is not the only way, or even the best way, to cut costs. Because consumers have not abandoned the branch, even in the digital banking era. The vast majority (87 percent) will use the branch in the future, reveals the 2016 Accenture North America Consumer Digital Banking Survey. Consumers say that human interaction is the branch’s biggest draw.i

By breaking the branch mold—what it does, how it is designed, where it is—banks can break out of business as usual. They can deliver personal, immersive and relevant banking customer experiences that blend banking innovation and human interaction while reducing operational costs and growing market share. This is the spirit of the agile branch, a place where customers rule; digital and physical experiences blur; retail inspiration flourishes; and investments pay off.

No more one-size-fits-allThink of the typical bank branch. The design is cookie-cutter. Tellers are behind glass. Advisors are behind desks. Customers wait in line. This is the one-size-fits-all bank branch. The branch is much the same whether it is located in a small town, mid-size city or booming metropolis. The square footage varies, but the overall look-and-feel and customer experiences do not.

While this model is sufficient for routine, teller-assisted transactions, it does not position banks well to attract, engage and retain specific customers in targeted markets. This is important for banks to compete when emerging players are highly focused on tailored customer experiences.

The branch experience is the brand experience, and it is lacking. Messaging within the bank and across channels is inconsistent. Community engagement is limited and poorly publicized. Sales quotas mean that volume eclipses value. All of this stems from the fact that bank branches do not have a driving mission to build customer relationships. Everything is different at the agile branch.

Relationships, Retail, Customers and Community 3

From routine to relationshipsRoutine servicing is not the routine at agile branches. Likes retail stores, they provide banking customer experiences beyond routine transaction processing to extend the role of the branch in customers’ lives. The mantra is to put customers first and build meaningful relationships. This can translate into new revenue. A win-win. Consider the objectives of the agile branch, which keep the customer at the core and seamlessly blur physical and digital interactions:

BRAND AWARENESS AND COMMUNITY BUILDINGInfluences brand perception by translating a clear value proposition into every customer experience.

EDUCATION AND CONNECTIONBuilds rapport with customer by providing new financial skills and developing programs to improve people’s digital literacy and grow digital inclusion for more connected customers.

SALES AND ADVISORY AND CUSTOMER ACQUISITIONAcquires customers through proactive contacts and conversion of walk-ins and digital leads—supported by analytics empowering frontline decision making—with a presence in high-traffic locations.

SELF SERVICEEmpowers customers with convenient and easy-to-use self-service tools, with human assistance only if and when it is needed as “back up” to help people navigate the digital experience.


Welcome to the branch store of the future

How do banks infuse these agile branch objectives into the branch? There are several agile branch store models. Think of them as inspiration, not absolutes. They provide a starting point that banks can modify. Each model emphasizes the agile branch objectives differently. The bank’s distribution strategy, demographic trends within target markets, budget allocation, and of course, customers’ requirements and behaviors, determine the right mix of models for the branch network. This network brings the brand promise and customer value proposition to life.

The flagship branch is the crown jewel of the branch network. It is a showroom of all the bank’s products and services. While it is designed to serve customers’ every requirement, the branch builds brand awareness in highly sought after, usually metropolitan, markets.

Spotlight: Allied Irish BanksAllied Irish Banks created a digital banking store—The Lab (Learn about Banking)—where consumers can learn, experiment with and be guided through self-service banking platforms in an innovative environment. The Lab incorporates four distinct customer zones and allows the bank to test and pilot its pipeline of innovations while building brand awareness.Brand awareness and community building

Sales and advisory and customer acquisitionEducation and connectionSelf service

The flagship branch

Because the flagship branch is a big investment, it is uncommon and strategically located. The physical space is unique, and draws from retail concepts. The showroom design is ideal for special events and co-branding opportunities with ecosystem partners. Imagine a car dealer displaying a car in conjunction with the branch’s auto loan and insurance promotion or a co-working space for start-ups or small and medium sized business clients. The branch’s full-service capabilities are a physical extension of its digital properties. Customers can have cash waiting for them triggered by app command, and they can pick it up simply by swiping their smartphone by the ATM. Replacement cards can be picked up as a result of a call center conversation. Biometrics speed authentication and ensure security.


The digital self-service branch serves a dual purpose: to provide convenient self-service options to customers and digital education as needed and maintain the bank’s presence in the community with less investment. The physical space is simple but loaded with interactive kiosks.

Brand awareness and community buildingSales and advisory and customer acquisitionEducation and connectionSelf service

Spotlight: Bank of AmericaBank of America has started a digital ambassador program in some of its branches to help educate customers about mobile banking and online banking services. Armed with tablets and smartphones, these digital ambassadors provide face-to-face, hands-on educational experiences to introduce people to digital services they may be unfamiliar with and to improve customers’ comfort level in using them.ii

no tellers. These are not cashless branches. However, the emphasis on self-service transactions means that employees do not handle cash, but are available to explain how to use self-service tools.

Customers visit the branch for advisory services or to complete self-service transactions—but only if they want to. The magic in this model is that the use of video conferencing, chat and other digital tools allows it to be highly demand driven. In other words, customers decide if they want to interact at the branch, at home or on the go. This is the ideal blend of service and next-level convenience for the digital age. It is about bringing advice and relationship management right to customers and using digital tools to extend the physical branch network experience. Not only does this benefit customers, but it means that employees have more flexibility and are less location bound.

Spotlight: mBankThere is no reason for customers to visit mBank’s traditional branch. Its digital branches offer complete service and support for even the most complex scenarios. A video agent (“expert online”)—using a secure, authenticated and transactable channel—acts as a personal advisor who supports both product sales and servicing. This service is available for all customers 24x7—the bank is open when customers want it to be.

The advisory branch without walls embodies the physical-digital blur like no other. It is a best-of-both-worlds model that merges elements of traditional branches and virtual banks. This branch is small and staffed with financial advisors,


The advisory branch without walls

The digital self-service branch

These are connected activity stations that service a wider range of customers’ needs than even workhorse ATMs can. Customers can also come to the branch and complete transactions using their own devices.

This branch is staffed with universal bankers who serve as ambassadors and educators. They assist with basic advisory and sales requirements such as opening an account, teaching customers so that they can do things on their own in the future. Not only do they educate customers about the digital tools located within the branch, but they also provide guidance on using and downloading banks’ entire library of digital tools that can be used outside the branch. This assistance builds people’s understanding of what they should come to the branch for and what they can do digitally. It can also include setting up customers with remote advisors who can address more complex needs


The lounge invites customers into the branch by providing amenities and convenience in addition to banking services. Located in busy urban areas or near shopping promenades, the lounge is modeled after airport lounges and retail hospitality suites.

The pop-up branch is a temporary branch location strategically placed to help meet customer demands or build brand reputation among a target customer segment or geography. This



includes branches at grocery stores, malls, university campuses and other high-traffic locations. This model also includes short-lived branches that open for concerts or special sporting or community events. Mobile branch trucks that go where the customers are and then move to another location are also pop-up branches.

Pop-up branches are staffed based on customer demands—a branch at a major soccer tournament employs a bigger team than one in a grocery store. For faster customer experiences, bankers trade paper-based processes for tablets. The pop-up model also provides banks with specific opportunities for unconventional collaboration. A branch might develop a cross-promotional plan with a retailer during the holiday season that involves prepaid gift cards, “gifted” savings accounts or digital piggy banks.

Spotlight: PNC BankPNC Bank has test marketed pop-up branches in several American cities. The Charlotte, North Carolina pop-up location was housed in a refurbished industrial container located in uptown Charlotte. Staff with tablets demonstrate digital banking tools and assist with basic transactional and advisory services. This branch is part of PNC’s focus on piloting pop-up branches in busy urban locations.iii

Spotlight: Virgin MoneyVirgin Money lounges are comfortable and designed spaces located in strategic areas. Banking services are practically the last thing that customers do here. The focus is on comfort: seating, refreshments and connectivity. If customers have banking questions, a concierge can put them in touch with experts. Each lounge is unique and customer response has been positive.iv

When they visit this oasis from the hustle and bustle, customers get Wi-Fi, coffee, couches and basic concierge services along with banking services. Lounges can be public, open to prospective customers, but most likely private, offering a members-only, VIP experience for existing high-value customers. The lounge is focused on providing a strong customer experience and enhancing brand awareness while also supporting up-selling to existing customers. The vibe is about relaxation, not high-pressure sales. The lounge can promote overall brand awareness and connect customers to services and experiences that they might not otherwise know about.

The pop-up branch

The lounge


Start with soul searchingBanks should take a hard look in the mirror to determine what kind of agile bank they want to be. This identity check will inform the branch mix. The analysis should involve not only understanding who the bank is today, but what it wants to be tomorrow. This self-assessment should be done in lock step with a target customer assessment to confirm that the institutional identity is well aligned with target customer identities. Banks should make a realistic assessment across two dimensions—the level of agility and the level of specialization. From there, they can adopt the agile business model and market segments, multichannel and customer strategies that complement it.v

Prepare to act faster than everWith many different branch models, new locations and ever changing requirements, banks should develop internal capabilities to manage the complexity and responsiveness of an agile network. This means empowering fast changes, prototyping and closed customer feedback loops. Plug-and-play capabilities break down the different components of an agile network into modules that can quickly assemble and reassemble into new branch experiences. Decision making and supporting capabilities must always respond at the speed of change because of the sheer pace of the market.

Give power to the peopleAgile branch models hinge on having the right people in place, and the right culture to support them. Agile branch associates require very specific behaviors that not all of today’s frontline employees have. They are digitally savvy, proactive, customer-oriented, energetic team players—and the list goes on. Not only do banks recruit for these softer skills, but they require staffing plans that get the right people in the right branches. Training programs should focus not only on compliance and products, but on digital skills and customer interaction. Performance measures will require a shift from quotas and transactions to connections and relationships.

The road to the agile branch

There is no blueprint for the agile bank branch. That would run counter to the very nature of the agile bank, an adaptive, flexible marketing and distribution model designed to appeal to micro-segments. As banks determine the right balance of agile branch models for their branch network, each will take a different path. However, there are some fundamentals to follow:


Tear down those wallsBanks are steeped in organizational complexity, from operating models and technology infrastructure to channel strategy and product development. These virtual walls that make it impossible for banks to act as fast and flexibly as the market demands. Complexity is the kryptonite of the agile bank branch. Banks have opportunities to overcome it by building the components of an agile network to ground the branches. This includes leadership teams with quick decision authority, a true multi-channel environment without “edges” between digital and physical experiences, and customer data insight that infuses all sales, service and marketing touchpoints all the time.

Think beyond the banking experienceBuilding community and connecting with customers in meaningful ways means providing experiences that deliver value beyond processing transactions. Think of it as extending customer relationships beyond their financial lives. For example, Barclays has developed an extensive digital education program called Digital Eagles that helps people become more tech savvy. Programs focus on helping seniors build knowledge and confidence with digital tools with online classes and “Tea and Tech” sessions. One program focuses on helping children learn to code.vi

Banks have work to do to confirm that the branch of the future is an asset, not a liability. Those that re-imagine the branch network and the banking customer experience can compete to win. After all, the branch is the human face of the bank, and it still matters a lot to customers. There is every reason to think about the branch differently, starting now.


FAST TWITCHFlexes distribution, making channel decisions quickly and often.

Replaces complex distribution processes, continually adjusting offerings as the market dictates.

Combines digital and physical channels to help grow market share without traditional branches.

Offers customers “what they need,” not “what the bank has,” hyper-personalized products and services.

Transforms fixed costs into variable costs and invests savings in revenue generation opportunities.

CUSTOMER FIRST

TEST, LEARN, TWEAK

REVENUE READY

RIGHT CHANNELING

Five Characteristics of the Agile Bank

Accenture Agile Bank SeriesThis series introduces agile banking concepts, explores the building blocks for getting started, and provides insights into how retail banks can strategically rethink all the elements of distribution and marketing to address the demands of the digital age.

To find out more, visit: www.accenture.com/theagilebank


Christine Duque Financial Services Accenture Distribution & Marketing Services [email protected]

Adrien Kirschfink Financial Services Accenture Distribution & Marketing Services Global Branch Transformation Lead [email protected]

Contact Us

Follow Accenture Banking

@BankingInsights

Accenture Banking

#TheAgileBank

Marco Magnini North America Banking Accenture Distribution and Marketing Services [email protected]

Yoann Michaux Digital Marketing, Financial Services Accenture Interactive [email protected]

Notesi 2016 Accenture North America Consumer Digital Banking Survey, www.accenture.com/consumerbankingsurvey

ii Mark Calvey, Banking: BofA’s Digital Guru Launches Ambassador Program, June 9, 2016, retrieved on July 18, 2016 at http://www.bizjournals.com/bizwomen/news/latest-news/2016/06/banking-bofas-digital-guru-launches-ambassador.html

iii Jen Wilson, Portable PNC Bank Branch Pops Up in Charlotte, May 13, 2015, retrieved on July 18, 2016 at http://www.bizjournals.com/charlotte/blog/techflash/2015/05/portable-pnc-bank-branch-pops-up-in-charlotte.html

iv Jim Marous, Virgin Money Customers Get First Class Upgrade in Radical ‘Money Lounge’, May 1, 2014, retrieved on July 18, 2016 at http://thefinancialbrand.com/39277/money-banking-lounge-design/

v Read Accenture’s DNA, Diagnosis, Shoes and Sweet Spots for more information on two agile bank models: the Agile Specialized Bank and the Agile Efficient Bank, https://www.accenture.com/us-en/insight-agile-digital-bank-dna-diagnosis-shoes-sweet-spots

vi Barclays, Digital Eagles, Build Your Internet Skills with our Digital Eagles, www.barclays.co.uk/DigitalEagles


https://twitter.com/bankinginsights

https://www.linkedin.com/company/accenture_banking

http://www.accenture.com/consumerbankingsurvey

http://www.accenture.com/consumerbankingsurvey

http://www.bizjournals.com/bizwomen/news/latest-news/2016/06/banking-bofas-digital-guru-launches-ambassador.html



http://www.bizjournals.com/charlotte/blog/techflash/2015/05/portable-pnc-bank-branch-pops-up-in-charlotte.html



http://thefinancialbrand.com/39277/money-banking-lounge-design/

http://thefinancialbrand.com/39277/money-banking-lounge-design/

https://www.accenture.com/us-en/insight-agile-digital-bank-dna-diagnosis-shoes-sweet-spots



http://www.barclays.co.uk/DigitalEagles

https://www.linkedin.com/company/accenture_banking

https://twitter.com/bankinginsights

About AccentureAccenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 375,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

About Accenture Distribution and Marketing ServicesThe digital revolution is transforming consumer expectations, making the customer experience a central focus of institutions’ distribution and marketing efforts. Accenture Distribution and Marketing Services helps financial services companies improve their customers’ experiences by harnessing information and insights that can help them create products sought by their customers. Serving more than 100 institutions worldwide, we combine Accenture’s deep knowledge in consulting, digital, technology and operations across marketing and distribution innovation to help our clients achieve high performance.

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