Accenture Banking Blog

In the previous blog in this series we looked at some of the eight attributes of the Experience Store, our term for a new kind of bank branch embracing both the physical and digital qualities sought by customers.

In this final post, we will look at the final two attributes, then move on to a discussion about how to get all these attributes working together for success.

7. Emphasize the human touch, with the front-line complementing technology with empathy. The shift to a digital-first experience store model means the stores will become a destination for customers who specifically need human support, so the in-store staff will need to bring ‘humanity’ to the model. This will mean handling more complex and potentially emotive conversations and taking on a wider and more stretching range of roles. The top three skills relevant for store staff over the next five years will be around pro-activity, customer centric mindset and the ability to change and learn

8. Utilize other networks with new formats. We anticipate convergence and cross-fertilization between banking store formats and other retail environments, with collaborations and concessions creating shared retail experiences in bank branches and shared banking experience in other retail stores. We’re already seeing cross-sector collaborations in other retail environments, such as Virgin Holidays operating in Next stores in the UK and Peet’s Coffee partnering with Capital One in the United States. With the emergence of experience stores, such alliances will increasingly involve banks, both as hosts and concessionaires.

The Route to Success

Banks seeking to compete and win in the era of the “experience store” will need to harness six specific success factors.  We will list them here and they are explained in our report: “From Branches to Experience Stores”.

  1. Use a dedicated global and local function to continually optimize the stores across territories and provide a consistent brand experience considering local specificities
  2. Have a global standard for each module within a ‘new branch’ and use a ‘kit of parts to drive down cost of their network
  3.  Manage the overall business architecture and systems architecture cross-channel – and govern this globally to avoid experience break-downs
  4. Be clear on the hand-offs between channels, as they will evolve as digital MVPs land and design with a human experience in mind
  5. Treat the change programmatically, setting clear targets for a three-year horizon but remaining agile in terms of the end-state and execution
  6.  Drive the employee behavior change starting from the experience mindset – not from a procedural, technical or regulatory standpoint.

The New Economics of Branch Transformation

In the past, many projects undertaken by banks to “restructure” their branch networks have really been downsizing initiatives aimed at reducing the number of outlets to hit a cost target. But there is still a clear sense across the industry that branch networks have not reached their optimal size or format. For example, average cost per transaction at branch locations tends to remain several times greater than through other channels, leading to decreased monthly transaction volume and increased transaction costs.

In these blogs, we have made the case for transforming the branch network into experience stores. Modelling the impact of this transformation on a large bank’s bottom line, we’ve revealed an opportunity to take out about 13% of cost that can then be reinvested in growth initiatives, while also improving revenue through the network by around 11%. The traditional physical bank branch network may not be dead, but it’s becoming increasingly outdated. Times – and customers – have moved on, and it’s time to catch up by making the branch fit for purpose again. Welcome to the era of the experience store.