Banks should invest in branch technology (Part 2)
In the UK alone, 461 bank branches are expected to close in 2017, partly because of changing customer preferences.
Some organisations are already using remote tellers in their branches whereby customers engage with remote staff via video, which means that customers still feel as though they are receiving a personal service. The benefits of remote tellers are twofold: banks can afford to extend hours because they don’t have to employ as many people, and they can reach a greater audience, but at a lower cost.
Another excellent integration of technology into retail banking is via smart ATMs, which offer mobile cash withdrawals without the use of a debit card. Again, this can make the activity of cash withdrawal quicker and easier for the consumer. It also removes the issue of forgetting or losing a debit card and not being able to withdraw cash in an emergency.
This future may not be too far ahead: already Japan’s biggest bank is trialing humanoid robot employees. The robot, Nao, is programmed to speak 19 languages and, through a camera on his forehead, analyses customers’ emotions from their facial expressions and tone of voice. The robot greets Mitsubishi UFJ Financial Group customers, quickly assessing their language needs, asking which services they need and, using stored insight into more than 5.5 million customers and over 100 different products, can then route the customer to the appropriate staff member based on past experience, products utilised or current mobile activity. This is not just a gimmick: Nao uses each interaction to learn a customer’s preferences and personality, enabling it to increase the accuracy of each subsequent interaction. And it may evolve further still: in some European retail shops, technology is being used to measure changes in the moisture levels of customers’ palms, as this is believed to help pinpoint the moment of decision.
There are wider benefits of intelligently applied technology, too. Most obviously, the reduction in error rates leads directly to a reduction in capital allocated against operational risks, as well as its attendant costs. Perhaps most welcome to regulators, banks and customers alike, however, will be the visible reduction in compliance breaches; avatars and AI-driven actions don’t generally miss-sell, forget or defalcate!
The bottom line is that customers still value the ability to visit their bank and receive face-to-face financial advice. With the right software, banks can gently redefine what ‘face-to-face’ and ‘advice’ mean and can provide an attractive and innovative in-store experience for their customers. Done properly, banking in-branch can become as powerful as an extension of their digital offering and selling points, but without the traditional costs and error rates.
Whilst organisations are aware that serial waves of disruption leave them little option but to change their operations, worryingly, we find too many are moving too slowly, either from an excess of caution or complacency. Those that do integrate technology soonest are the ones that prove to have their customers front of mind.