Channels

11:45 AM
Jasmeet Singh
Jasmeet Singh
Commentary
50%
50%

How to Master the Branch-to-Online Platform Transformation

How data and analytics can help banks as they look to build the branch of the future.

We’ve been hearing a bit about the 1964 World’s Fair lately because of its 50th anniversary. One of the many fond recollections was the prototype of a video telephone on display in one of the pavilions. By the mid-1980s, some of the big telecoms were trying to bring this technology to market -- but it was a flop with consumers.

It turns out the market didn’t want video phones, even though the technology existed. That episode serves as a lesson to large banks currently exploring how to boost personal banking with features like video ATMs within bank branches. The technology exists. But are consumers ready to embrace it?

[For More On Video Banking, Check Out: Bank of America to Add Video Conferencing to 500 Branches]

Today’s banks have something at their disposal that telecoms of the 1980s did not: big data and pervasive computing. The financial services industry is looking to make banking more personalized, so it would do well to use the right IT solutions -- including those that allow robust predictive analytics -- in order to introduce banking features that will satisfy their consumers and improve the bottom line. Also, a very large and growing segment of the population has access to smartphones and tablets and has the power to communicate with the banks, including over video calls at a time and place convenient to them.

Indeed, the challenge is to understand how to turn the data they have at their disposal into value. They can start by turning things on their head and stepping outside traditional banking platforms in order to engage customers. The paper bank statement, for example, will die. There’s no reason to have it around even now, except for legal requirements. Checks and cash will also become a shrinking market.

Stepping outside traditional platforms will help banks realize that they need to reevaluate self-service and customer engagement in this completely new environment. For the better part of four decades, ATMs have served them well as an extension of a bank branch. In the last 15 years, online banking has also been a popular branch extension. Banks must look at how they can leverage these and other channels as distinct revenue streams as the push for self-service continues. And they need to start soon: Companies like Google and even retailers and grocers like Tesco and Walmart have banking licenses and are looking to redefine the financial services industry.

Banks have to keep ahead of the technological trends that are transforming their industry. In three years, for example, the United States will be home to 115 million tablets. Tablet users are the kind of high-end customers that banks want, which is why it’s vital that the next generation of self-service channels be geared towards that platform. Banks will need fewer employees to help customers navigate online and instead can use them to strengthen customer relationships.

Which brings me back to the video ATM. Will customers really drive to their bank branch for the privilege of standing face-to-face with a video screen? Probably not. To succeed in the financial services industry of tomorrow, banks need to make sure they have a strategy around all self-service devices. Customers are ready to connect with banks over smartphones and tablets and are looking to be able to do it at a time of their choosing and at any location. And for that to happen, they must use their customers’ feedback to find the best ways to personalize their products.

Jasmeet Singh has close to 19 years of professional experience, including business and IT alignment, transformational outsourcing and helping clients achieve their business goals. Jasmeet has extensive experience in the financial services industry and has worked across ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
plfreegard
50%
50%
plfreegard,
User Rank: Apprentice
8/9/2014 | 3:56:59 PM
Changing Convenience
I really like your point how convenicne is changing.  Couple this with how expectations are being set by non-banking leaders such as Apple then the banking challenge is imense.  I think that aggregators like Mint, Shrinkmybill and others, accelerated by governmemnt initaitives such as Midata (UK) and Smart Disclosure (US) will fundamentally change our expectations of "convenience".  In banking we need to connect Convenience with Control (for consumers); aggregators are helping consumers in this respect too, my own perception is that there is a major disruption around the corner for banking and it is a major threat to traditional banking.  
Byurcan
50%
50%
Byurcan,
User Rank: Author
7/18/2014 | 9:20:56 AM
Re: Self-servic
I am one of those people that enjoyes going to the branch instead og using self service. I went to my bank branch 4 times over the past couple weeks, and it wasn't inconvenient at all!
Kelly22
50%
50%
Kelly22,
User Rank: Author
7/17/2014 | 3:14:33 PM
Re: Self-servic
I think you're right, Bryan. Self-service capabilities are in high demand, but consumers also value the ability to ask questions and discuss complex services with an actual person. Banks will have to determine how they can balance digital with face-to-face interaction in order to provide an optimal customer experience. 
Byurcan
50%
50%
Byurcan,
User Rank: Author
7/17/2014 | 9:48:09 AM
Self-servic
I agree that obviously banks must cater to the modern consumer, who is attached and addicted to their mobile device, and must increase self-service capabilities. But I do think there will always be a place for face to face interaction, consumers will always want to go over the details of a mortgage, or some other complicated financial product, with a real live person.
KBurger
100%
0%
KBurger,
User Rank: Author
7/16/2014 | 3:02:02 PM
Re: Technology cycles
I think part of it is that our definitions of what is "convenient" is changing -- sometimes it's about speed, sometimes about real time, sometimes about location, etc. And of course what a boomer defines as convenient isn't necessarily the same as how a millenial defines it.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
7/16/2014 | 2:59:17 PM
Re: Technology cycles
Wow. You compare that to how fast mobile is gaining adoption today and it says a lot about how much we value convenience and the technology that enables it now.
KBurger
50%
50%
KBurger,
User Rank: Author
7/16/2014 | 2:39:31 PM
Technology cycles
Good overview, Jasmeet. I feel compelled to point out that in the mid-80s -- when as you note there was resistance to the video phone -- was when ATMs were finally overcoming the legendary "33 percent wall", the 33% of customers who regularly used ATMs. It took a long time, at least 10 years, for that barrier to be surpassed. And when it was surpassed, it was due to a combination of factors: demographics, tech capabilities, ubiquity of ATMs, consumer education, incentives, etc. Obviously today the tech introduction and adoption cycles are much shorter than in the 60s, 70s and 80s. I guess my point is that what is "reality" today won't be in the future -- but we also can learn about the future from the past.
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.