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Revamping bank branches and ATMs for long-term success

Traditional high street banks are experiencing a shake-up during the pandemic; with customers heavily reducing their use of legacy banking channels and digital banks seizing market share with innovative digital-first solutions.

HSBC recently announced staff redundancies nationwide and bank closure rates will continue to rise as 40,000 more banks are expected to close within the next three years in Europe. Hence, the issue around access to cash is to worsen.

Banks should focus on making the lives of customers easier, frictionless, and stress-free - different measures have been put in place already within the industry to counteract these growing concerns.

Forward-thinking banks are adopting alternative models, for example, HSBC has big plans for digital services and pop-up branches.

That said, more could still be done around how self-service banking can be complemented with assisted service and remote service in a lean branch format. This approach offers several benefits, which include providing the community with a bank branch in a box or rejuvenating them as central hubs for financial services.

For instance, ATMs can be customised to offer additional services from paying a bill to doing a live video call with a financial product specialist, which also allows cash access to be subsidised through generating extra revenues. A 24/7 banking service significantly transforms the economics of a physical branch.

Next generation banking

Future bank branches must be cheaper, smaller, smarter, full-service, and automated. Around three to four years ago, the Portuguese private commercial bank, Millennium BCP, faced difficulty in reputation management and the cost of infrastructure.

This led to the creation of the MTM branch model and an innovative, new style of branch that provides overnight remote banking and around the clock service.

This proved to be a profitable approach as branches enjoyed greater proactivity, received double the amount of deposits in comparison to legacy banks and required less costs.

With personnel managing the transactions during the day, and remote tellers at night, it also contributed to how they managed to save money operating the bank. Moreover, this also improved customer loyalty and the retention score.

A ‘NextGenBranch’ model can also be achieved by enlisting the help of tools such as Bank4Me, Auriga’s advanced remote banking solution. It allows customers to access all the services of the bank in self-service mode and interact with the bank’s consultants via video assistance, in a safe and personalised way.

This solution is designed to answer the need for more sopehisticated customer care using audio and video banking channels at branches through a digital video terminal within a private area of the branch.

Impact of branch closures

Towns and neighbourhoods are losing their local high street bank branches, even though a significant number of people have become accustomed to using them as a channel of financial services.

This restricted access to cash has outraged consumers as bank branches are deemed by many as more dependable and provide added comfort and security to the customer.

Therefore, banks should look at how they could share facilities to maintain local financial services hubs. This concept can already be seen in parts of Europe and sharing branch space can be cost-saving, revenue-generating, as well as improving community relations all at the same time.

It can be an alternative way of ensuring customers are not missing out on accessing vital banking services.

In shared branches, the user experience can “follow the customer”; co-ownership of space with a third party commercial or community enterprise should result in an upswell in community interest for this.

Closing bank branche networks and the removal of ATMs might be a short-term strategy to reduce costs and increase efficiencies, but branches can also be revamped and ATMs customised to achieve long-term competitive advantage and success.

Otherwise, banks could lose customer loyalty and experience reputational damage. Self-service is a viable solution up for consideration.