Reflecting on the debate about bank branches yesterday, a point did not get discussed that is actually one of the most challenging.
I was given this challenge myself when, working with a client who is launching a direct bank, they asked me this question: “we have to on-board clients with proof of identity by seeing a passport”.
OK, says me, get them to text it in as picture from their phone.
“No, that is not acceptable by law”, says the client. “We have to physically see the passport.”
Oh, says I, then ask them to pop into one of your sister bank’s branches to show the id.
“No”, says the client. “That defeats the whole point of being a direct bank.”
Yes, this is true.
And this was at the heart of the debate about why banks need branches, when the anti-branch brigade made the point that this infrastructure was built in the last century and the only reason a customer visits a branch today is due to our rules and regulations, one of which is all of this KYC and AML guff.
Thinking about both issues, I came up with a solution.
It stems from my early days in insurance.
No insurance firm has customer offices where you go visit.
Instead, they have direct sales forces who come to you.
So why not switch from a branch structure to a direct customer advisor operation?
It would go something like this.
Customers handle all of the transactional needs via self-service.
Cash is all automated via ATM infrastructure.
So the only residual service is sales and advice.
This can also be automated, as raised in our debate. Placing intelligent ads that are coentxtual in both mobile and online data mines makes great sense.
But if the only residual need for human interaction face-to-face is for sales and advice, then why not take the best banch advisory people and give them a car, an iPad and an iPhone (or Android if you prefer) and send them out on the road.
Whenever a customer clicks or touches ‘make an appointment’ on their online or mobile banking service, they can immediately see a schedule of available times from the direct advisor group and, like booking an appointment with the Genius Bar in the Apple store, you choose your time and location – their office or yours or your home – and away you go.
Automated online appointment systems have been around for a long time, although many banks still have not deployed such systems, and the biggest gain here is that you would no longer need branches.
Or not as many anyway.
In fact, the more I think about it, the more I like it.
After all, why would I go to a branch to talk to a human via an ATM that is video-eanbled when the truly focused customer advisory bank would send their people to me?
This is what the business side of the bank does btw.
If I’m an SME, I am given my very own client manager who calls me once a year and visits to give my business a health check.
Would the bank do this for their mass market?
No, because it’s too expensive.
Would the bank do this for the mass market if they could eradicate their branch overheads overnight?
It’s worth thinking about as you make two gains overnight: cost reduction and customer centricity.
Now that’s what I call building a customer advisory bank.
The is part four of a five-part series:
- Part One: One banker knows his industry is trashed, and here's his plan
- Part Two: Do banks need branches?
- Part Three: Why you really need a bank branch
- Part Four: Building a customer advisory bank
- Part Five: A truly social bank advisor is key