Branch banking meets digital data mining

Does the new emphasis on digital channels signal an end to bricks and mortar banking?

A dominant trend in retail bank marketing strategy is to orchestrate personalized brand interactions across a range of digital channels. But a completely branchless model is not a viable strategy for most financial institutions. Branches are costly but they succeed in attracting customers. Smart banks are tapping synergies between physical branch presence and digital technology. Sales of bank products (such as credit cards) that require less buyer judgment can originate in and be completed entirely via digital channels. But many bank consumers, including younger ones, still want face-to-face engagement to get explanation of more complex products like investments, mortgages and business lines of credit. These happen to be banks’ higher margin products.

Integrating branches with the bank’s digital marketing program begins with arming branch personnel with information: for example, customer relationship management (CRM) tools or real-time business intelligence (BI). Subject to legal restrictions, branch personnel should have access to information on prospects in their service area-- from social media and even from their browsing history recorded by web cookies. Timely data can alert the branch to account holders stopping in for a routine transaction who have been shopping for or been prequalified for a loan. This can lead to a conversation that allows a branch representative to determine customers’ needs and move them toward a sale.

A key metric for branch performance should be how many meetings the manager and staff set up with prospects identified by the bank’s data mining program. After tightening the links between digital data mining and branches, one large regional bank increased sales of working capital and personal-loan products by more than 25 percent. Across Europe in recent years banks have developed a wide range of service delivery models, assisted by video tablets and smart ATMs. Banks in Europe like Erste and Raiffeisen use video facilities in branches to conference in specialists on mortgages or Investment banking from a remote location to talk to a customer. Meanwhile European bankers have taken note of a striking innovation: robots that act as greeters in branches in the UAE.

The message for financial institutions is clear. Banks must engage prospects via their tablets and smart phones. However, they also should follow up with timely in-person interaction at a branch to provide guidance and close sales. Banks that understand how to integrate “bricks and clicks,” digital marketing and physical presence, will be the winners in the retail banking industry of the future.