In the first part of this series, we reviewed whether the demise of the high street bank was inevitable, given the shrinkage of branch networks over the last few years. With many brands closing branches, citing digital preference amongst customers, Nationwide Building Society have stood firm against this and the challenger digital banks with a pledge to keep branches open until at least May 2021.

So, if traditional brick & mortar branches are to thrive and survive, how do we determine what function and form they should take?

Determine their purpose

Banks’ traditional segmentation by income, assets, age, and geography has its place, but customer mindsets can vary substantially within what, on the face of it, may look like similar ‘segments’ based on what they love and loath. It is important to weigh up the value equation - what might these customer groups want human interaction with a bank or building society for and why may it be important for a bank to meet this customer need to be sustainable in the future. This is also heavily driven by customer life-stage – what products and service experiences might they need from an interaction at any given moment in their lives?

Designing a Phygital customer experience

Many consumers want to interact digitally for the convenience, access and control that it offers. Digital is also a lower cost and more scalable channel for banks and building societies to service transactional demand than via traditional contact centres and face-to-face. If you follow this logic, then branches of the future should therefore be Digital first.

A simple customer experience would then combine both digital and physical interactions. For example, a customer is browsing a bank website looking at mortgages. They are offered a video chat with a service advisor who explains the mortgage types and books the customer in to see a mortgage advisor in their local branch. The customer is sent an email confirming the appointment, directions to the office and a QR code to use when checking in. The customer attends the branch and sees the assisted self-service device. They check in for their appointment using the QR code and the advisor is automatically notified that the customer has arrived. If the mortgage advisor is not present for any reason, the video agent on the self-service device can advise the customer of this and direct them to a video enabled interview room when a video agent is ready to conduct the interview (including printing, scanning, screen sharing etc – just like the physically present advisor would do had they been there).

Making sure it works

Like most change programmes, thorough implementation and test planning is required. Testing and learning with new designs, trialling minimum viable products with real customers before deploying them throughout the branch network.

While the direction of travel for branch networks is to have fewer branches and smaller branches with fewer staff in them, the physical branch network still has a significant role to play in differentiating mainstream banks from new entrants. New and emerging technologies can enable banks to automate, transform and enhance branch functionality to meet the needs of customers.

To chat more about the Phygital future of bank branches, please get in touch with me here.