How do branches in banks continue to survive? Is it possible keep them alive with technology?


Although operational efficiency requires banks to give up branching bank, consumers look for branches on every corner. This is a horns of dilemma situation but, the solution should be in the middle of it all. The mutual interaction between human and digital infrastructure should be the solution of this dilemma.

20 years ago, just I was 10 years old, when I was waiting in the queue of ATM with my mother, my mother was sure how to use this machine because she get used to the technology. Now, my older relatives know how to secure their internet banking password.  In spite of their improvement in technology literacy, their important financial decisions still depend on confidence of customer representative. They need to feel and taste this trust.  Well, how can branches continue to their life?


1- Reduce the footprint of branches!

Comfortable, quiet and wide branches helped to increase the customer satisfaction and profitability of banks in Turkish banking sector. This strategy will not be sustainable in near future due to decreasing returns. So, average size of branches should be reduced sooner or later. In this way, the cost of distribution is able be reduced.  Self service branches are alternatives, but I am not sure whether Turkish banking customers are ready to use self service branches. (In Migros shop, I still can slog while using self-check-out machines ) However, the type of express branches can be a solid solution. This thrifty structure can be supported by assistants who helps to bank’s customer. Branches can be a good model if cash recyclers, video conferencing (for advanced transactions), digital walls and tablets put into branch effectively. You can contact with me if you want to talk about digital branches much more!


2-   Dive into digital world!

Opening the account digitally, onboarding digitally, proactive recognition of a consumer’s relationship etc. can replace with traditional branching operations. However, the digital signature, official digital e-mail (KEP etc.) can come before all of this.  These are important clues of the digital banking world. The crucial point is to integrate all of them with usual branching activities.

From queue modelling to workforce management in branches (Actually, a few weeks later, I will tell these models to determine optimal staff and location in details) or Ibeacon for customers can help banks focus on the digital world.

3-  Improve Efficiency!

Efficiency ratios will be in the main agenda of banks very soon because of difficulties of profitability in Turkish banking sector. Therefore, every bank head managers analyze their operational efficiency and give some important strategic decisions nowadays.

From seller to back office, all operations of banks should be digitized. This could be a very basic argument for you. However, losing main documentation, deficient signatures, waiting important documents due to post office are really big costs for Turkish banks. I know some banks has already completed their transformation.  But, changing and transformation never end!

Moving customers from branches to digital channels will be still popular in the coming years. In order to attract consumers, commissions and fees are powerful tools and this will be able to create cost opportunity.

4-  Creating a new customer experience

Todays, banks are intensely working on the personalization of online and mobile applications. All platforms should be personal at the end of day. A sufficient consumer experience can be provided with collection of data during the all processes of consumer with the bank. After that, banks should show customers at a glance exactly that they know and understand them. Banks should prove that if loyalty continues, satisfaction of customers will increase (via reward and loyalty programs) For example, when a customer buys a DVD player from internet via credit card of the bank, his/her branch can send a film DVD as a gift.

Learning from consumer interaction in the branch or digital channels will be able to increase service quality of the branch. Knowing your customer is not only a term for money laundering activities, but also an important observational data for propensity models. It is very excited that learning anything from consumer interaction with bank will improve marketing effectiveness in and out of the branch eventually.



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