Following the revelation that digital natives do actually enter banks, Áine McCleary, Director of Distribution Channels for Bank of Ireland, outlines its vision for a future-facing physical presence with branches to suit everyone
Digital natives, we’re told, are so immersed in digital technology – so comfortable in the binary landscape that links their phones to their friends and their finances – that physical, real-life experiences feel dull, inconvenient and frankly outdated to them.
It’s difficult to blame service providers of all stripes for responding to this apparent trend and taking a bulldozer to their physical, in-person provisions. But… it’s only half of the story.
Despite the advancing avalanche of digitech, it appears that consumers, including millennials, do in fact value tactile, physical experiences. Digital natives, contrary to previous projections, prefer to straddle the digital and the physical worlds in their shopping and their socialising – and appreciate seeing a human face in-store.
This thaw, following a digital white-out, has soaked decisively into the banking sector. Deloitte this year advised, after careful analysis of banking customers, that ‘banks should not completely give up on branches yet. Customers still prefer the human touch’. A Gallup survey from 2018 underlined this point, finding, against prior assumptions, that 66 per cent of millennials had visited a bricks-and-mortar branch in the previous six months.
And at November’s RBR Branch Transformation Conference, 580 delegates from mroe than 180 banks were told their branches need entirely reimagining for the 21st Century – not boarding up.
That’s a movement that Áine McCleary, Bank of Ireland’s director of distribution channels, can buy into: she believes that, while one incarnation of the branch may be in decline, another is set to rise.
She explains: “In the noughties, we saw a lot of consolidation and some branch closures. But in recent years, we’ve seen something of a reversal.” Bank branch closures reached a peak of 70 per month in 2017 in the UK, a figure that research from Which? showed had halved by 2019 (although that stat was arrived at before TSB’s decision to close 82 outlets). The slowdown – while perhaps evidence that banks have now cut as close to the bone as they dare – appears to be EU-wide. And there are signs of some strategic branch reopenings taking place across the continent, including on the island or Ireland, where the Bank of Ireland currently has 265.
As leader of a team of some 2,700 Bank of Ireland staff, McCleary’s focus has been on the best way to redeploy them to a customer base well-served by digital alternatives. As she explains, that requires the bank to listen.
“In 2018, we expanded our cashier services by 40 per cent across our network, and that was on the back of what our customers were telling us they wanted,” she says. “Our branch footfall hasn’t reduced in the last couple of years – but how customers are using our branches has changed. We’re hearing from our customers that they want a blended banking experience: to be able to have the digital for their very easy and simple transactions, but to also hop on and off, and have that omnichannel experience with our physical contact centres, too.”
This, then, is the branch of the future: generous sprinkles of digital services – such as the advanced ATMs that take cheques and process transfers – but with the surety of a friendly human guide should customers feel suddenly overwhelmed when attempting more complex financial tasks.
In fact, peering into the recent past, the Bank of Ireland moved early to accommodate the shifting needs of its customers, and to correct the over-hasty branch closures that have come to define this decade. As McCleary outlines, the Bank of Ireland is promoting a branch strategy that covers all touch points required by our customers.
“We opted for a dual model approach,” she explains, “whereby we’d have flagship branches and self-service and advice branches. So, across our 265 branches, we have 165 flagships and 100 self-service and advice branches.”
Bank of Ireland is placing the latest automated banking services technology – like DocuSign, advanced ATMs and virtual meetings and workshops – into its self-service branches. Meanwhile, the flagships are flashy, masterclasses in community re-engagement.
Part of a movement
This dual model is also being deployed internationally by the likes of Banca Bilbao Vizcaya Argentaria (BBVA), ING Bank and BNP Paribas. In the US, where Bank of Ireland also operates, a battle is emerging between Bank of America, JPMorgan Chase and Citibank to reclaim physical dominance in light of these new, innovative – and eminently successful – bank branches.
Bank of America was due to modernise 2,500 branches by the end of 2019, while JPMorgan Chase, having brought the shutters down on Finn, its millennial-focussed banking app, has concentrated instead on opening no fewer than 90 new branches, including a stunning flagship in the centre of New York.
Describing its own approach, McCleary says: “At Bank of Ireland, we’ve made our flagship branches multi-zonal. We have community spaces, we have digital areas, we have self-serve areas, we have welcome advisors to help out with any queries, and we also have areas for engaging with customers about their overall financial wellbeing.”
At the very pinnacle of these Bank of Ireland flagships are the ultra-modern Workbench branches. First created in 2015 in Dublin, the initiative epitomises the bank’s continued ambition to remain a trusted physical centre in the communities it serves, rather than a purely banking space.
“Workbench was set up by our innovation team, in keeping with our overall national champion ambition: that we want to enable our customers, our communities, and our colleagues to thrive,” says McCleary. “What better way to enable your community to thrive than to provide a space where they can come in, they can work – if they’re self-employed or they’re startups – and really build that network of innovative culture in those areas.”
She continues: “We have a Workbench now in Letterkenny, North Donegal, and one in Tralee, with 12 in total across the country. It’s really in areas where we feel there’s an innovative culture, where people can come in and help the local economy thrive.”
It’s one of those digital age peculiarities, like analogue-film filters on Instagram feeds, or music fans turning back to vinyl in the age of streaming, that digital consumers seem, more than ever, interested in community.
For the Bank of Ireland, it‘s never gone away. Community investment has been a dominant gene in its corporate DNA since the firm’s foundation back in 1783. A signed-up member of the UN Responsible Banking Principles, the bank has so far generated more than 27,000 KWH of solar energy in response to customer concerns about climate change; it has a €4.9million pot for community investments, and staff are supported to take volunteering days. So, a continued physical presence in those communities is a given.
The new-look branch
In Germany, Deutsche Postbank has given its customers access to banking services in petrol station mini-branches. In Singapore, basic banking services are increasingly accessible in coffee shops, small retailers, and hawker centres. And in the UK, Virgin Money Manchester has evolved into a millennial-minded hybrid: a twisting maze of hyper-modern community spaces, work desks and touch points – and, true to Manchester’s spirit, a fully functional music venue in the back.
If McCleary is right, where and how the bank branch will appear next will be determined as much by consumers as by the banks.
While the race for the past decade has been to dismantle branches in the face of the approaching digital blizzard, the Bank of Ireland, and other future-facing banks like it, are showing just how important a strong physical presence and a warm welcome continue to be for customers of all types and all ages.