Banks are as much on a digital transformation journey as are businesses in other sectors, but in their customer-facing services, this is referred to as branch transformation.
Banks are deploying technology to transform and optimise their customers’ branch visit experience. This initiative is about improving customer experience (CX) and helping the bank maximise its real estate footprint, says Bennie van Rensburg, Senior Manager: Professional Services at Altron Managed Solutions.
“Banks these days are looking to reduce their geographical footprint from a branch perspective as part of a cost-efficiency exercise. Many of the leading brands have already closed several branches around the country. However, at the same time, they need to provide more value-added services to customers from the branches that they do have. By automating many of the services that a bank traditionally offers, the bank can occupy less space while offering a bigger range of services, at the same time reducing the amount of time that a customer needs to spend in a queue.”
Branch transformation isn’t a new initiative, it’s been around for a few years, but the pandemic is accelerating the journey. Some of South Africa’s banks have been on this journey for a while, as technology starts to deliver a broader spectrum of banking services while meeting customer expectations.
Technology is undoubtedly a key driver of branch transformation. Customers are accustomed to being able to access banking services on their mobile phones, tablets and laptops. Technology is advancing to enable automated teller machines (ATMs) and self-service terminals to offer customers more functionality than they can access via the applications on their devices.
The banks that have already been on the journey are using technology as the driver, but the customer must be the driver at the end of the day, Van Rensburg advises.
“While technology is the enabler, it must be remembered that the crux of all of this is to provide an improved customer experience. Service providers and banks need to provide a better customer experience first and foremost – and technology enables that. People don’t want to queue; they want to do what they need to and carry on with their day.”
“The primary focus of branch transformation is to give the customer a quicker experience, moving them through the branch as smoothly as possible by enabling them to do a portion of their required transaction prior to even entering the branch.”
Branch transformation enables an omnichannel experience. Customers can start a transaction using the application on their device and complete it at the branch without having to wait in a queue. For instance, a customer can order a new bank card via their mobile phone and then collect it at the branch from a secured locker, using a one-time pin code sent to their mobile phone to access the locker.
He cites the example of an ATM that can be enhanced with functionality such as passport or ID book scanners, biometrics and even video functionality that enables a person-to-person conversation during complex transactions – or even if the person doesn’t understand how the technology works.
There are also smart kiosks at which customers can open accounts, issue their banking cards and perform other value-added transactions.
Consider your customer, always
Despite increasing enhancements from a technology perspective, it’s key to note that human interaction is always going to be a requirement, whether face-to-face or communicating through a technology platform, to execute certain transactions. “Certain transactions can’t solely be done via technology and will require a trained person to execute. Video banking could play a significant role here. Branches will always have people on site, but video calling will allow them to provide after-hours, 24/7 services for people wishing to transact outside business hours.
It must be mentioned that metropolitan areas will have a different branch transformation journey to rural areas. The branch’s customer base needs to dictate the type of technology deployed. “In certain metropolitan areas, people are looking for a better banking experience and expect more value-added services from their bank. To this end, some banks have partnered with state entities to issue passports or identity cards. However, this has required a Home Affairs official to be based at the bank and for applicants to queue to obtain their items. Today’s technology allows customers to collect their passport or ID book from a smart locker, as mentioned previously.”
However, customers in rural areas may not be ready for this level of automation, cautions Van Rensburg, so where more human interaction is required, banks must be wary of alienating customers by deploying too much technology too quickly.
Other challenges faced include literacy – especially technology literacy – among the branch’s customers and the available infrastructure, particularly where video banking is to be deployed. Security is another challenge in South Africa: customers need a secure environment to transact and personal security after hours, especially if they’re collecting items.
“The banking environment needs to educate its customers on how to use the technology while reinforcing the government’s messaging around limiting human interaction as much as possible. The fewer people you can interact with, the safer it is for you, in the simplest terms. The adoption rate might not be fast, but ultimately this will benefit all parties involved.”
The bank realises several business benefits from deploying branch transformation. The biggest driver is the cost savings affected from a geographical footprint perspective and from being able to do more transactions. Thus, increasing revenue through value-added services that may not have been available previously at the branch.
Before deploying branch transformation, the bank needs to interrogate what kind of technology makes sense and whether it needs to invest in the latest capabilities. It also has to consider how quickly it can execute and what level of functionality its customer base requires. “You can achieve certain functionality with minimal expense, but video banking is at the higher end of the scale. However, in the right environment, it’s extremely popular with customers. The main thing is to do due diligence in terms of the branches you want to transform, then you’ll reap significant business benefits from a revenue perspective."
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