Together with FINTROPOLIS, the future portal of Atruvia – the IT service provider for the Volksbanken and Raiffeisenbanken cooperative banks – we shaped and clustered trends around the transformation of the bank branch. Across two digital workshops, we guided the 30 participants directly toward the bank branch of the future. The days of barred counters in banking halls are long gone. But how must bank branches change in the future? FINTROPOLIS provided the summary of the results for publication. Read the original article here.

How is digitalization shaping our experience of bank branches?

Coronavirus has changed many things in our lives: we avoid social contact and do as much as possible online. Bank customers are no exception. According to a study by the financial portal Verivox, the pandemic accelerated the already declining number of visits to German bank branches even further. One in three respondents said their last visit to a bank had been more than a year ago. That is not hurting the financial institutions’ business – it has simply moved online. What is missing, however, is personal contact on site. More and more banks are drawing consequences and closing branches in droves.

By 2030, every second branch will have disappeared, predicts strategy consultancy Oliver Wyman in a study. Yet customers still place great value on personal advice – particularly for securities, mortgages or other loans, according to Commerzbank CEO Martin Zielke in his role as head of the German private banks’ association. Reason enough to consider how the bank of the future must design its branches so they remain attractive as places to meet.

Together with FINTROPOLIS, we therefore dedicated a workshop to the question: how is digitalization shaping our banking experience? The result: the following five trends.

1. Added Value Through Services

In the coming years, banks will need to develop new business models. They will expand their advisory services into other markets – making bankers a hub for a wide range of products and demand. Branch concepts of the future must reflect this development. The opportunities are limitless: open banking APIs already make it possible to integrate services for travel, mobility and health. Local services will also play an important role in future branch concepts, since they strengthen and connect the local infrastructure. Rethinking how space is understood and entering into new collaborations and partnerships will be decisive. This is how banks can offer customers real added value. The feel-good factor will rise too, and people will once again enjoy going to a bank branch – which might then be housed in a co-working space, a restaurant or a café. The key idea is always that the branch becomes a community – a home for young and old alike.

2. Seamless Experiences

The bank branch of the future will feature unconventional, interactive spatial concepts – and deliver experiences for customers that flow seamlessly into one another. Where an investment advisor designs a retirement plan during the day, an exhibition might take place in the evening. Banks as co-working spaces or cafés are also possible – and such concepts are already being successfully implemented today. For the participants of the FINTROPOLIS workshop, one thing is clear: the classic branch as we know it today will soon no longer exist. When designing concepts for the bank branch of the future, you have to be bold and look beyond the obvious, the participants unanimously agreed. The question then becomes: what additional services can a bank offer, and how should the branch be designed in future? Creativity is required here.

3. Tailored Touchpoints

To engage with customers, banks will increasingly communicate through innovative, digital formats that bring brands to life with all the senses. With so-called tailored touchpoints, messages are precisely matched to the individual being addressed. Branch concepts that combine digital elements with a genuine, physical experience take center stage. This allows banks to reach their customers even more directly and guide them through the banking journey, both inside and outside the branch.

The branch could then serve as an extension of the app – opening up intuitive on-site interaction tailored to the individual customer. Wearables play a decisive role here, since under the megatrend ShyTech – where technology politely fades into the background of everyday life – physical devices on the user interface recede from view. The most important thing is to deliver a seamless transition between online and offline offerings in the branch.

In the workshop discussion it became clear that all participants see a playful experience as the priority: artificial intelligence could be used, for example, to identify what triggers a positive response from a customer when they enter the bank – by recognizing how they react to a particular video. A favorite drink served immediately can also signal: we know you and we know what you need. Participants concluded that the offering can be taken much further – for example with a smart ATM that recognizes customers and presents them with special offers such as coupons for the shops where they regularly buy.

4. Flexibility

We live in a world shaped by volatility, uncertainty, complexity and ambiguity. To meet this, banks need to be flexible in their offerings and ways of working – and to embrace the core ideas of agile software development. Financial institutions are therefore forced to become more agile and to respond flexibly to regional conditions and demand. Flexibility starts with how office spaces are designed – and with the mindset of employees. The latter is the decisive point, the workshop participants agreed. Employees need to be open to change and willing to embrace it. To remain flexible in future, traditional working structures will have to be broken open and unconventional paths sometimes taken – for example with new opening and advisory hours. One example is Hanselab, where bank advisors counsel start-ups on site – the start-ups no longer have to visit a branch.

One option for greater flexibility within banks, the participants suggested, is for bank employees to work across departments in branches. That opens up new perspectives and frees up capacity in the old head-office spaces that can be used elsewhere.

5. Responsibility as the Key

People’s trust in politics and the economy is crumbling – and the financial sector is heavily affected. Whether a company takes on social responsibility will therefore become a decisive purchase criterion in future. For financial institutions, it will be central to convey credibility. Processes must also be made more transparent – and ethical values brought to the fore. This should happen on both a technical and a personal level. Only in this way can institutions meet individuals on an equal footing and prevent loss of trust.

The Volksbanken and Raiffeisenbanken still have a particular advantage here, the workshop participants noted. They already enjoy close customer relationships that should be nurtured. Because the clear mandate of the branch in the banking experience will, in future, be: build trust. With the younger generation, this is a special challenge: they first have to be told what a bank branch even is. An absolute prerequisite for trust, the workshop participants concluded, is to know your customers – and to give frontline staff genuine advisory and decision-making authority. Trust-building, however, starts in your own house: by training employees and managers in agile working and making it clear that this is the precondition for being future-ready.

All in all, one thing is clear: the bank branch of the future will become a place of encounter where digital and physical experiences come together. What do banks need for this transformation to succeed? “We have to be bold,” summarizes TRENDONE Innovation Advisor Pia Schlemmer the workshop participants’ conclusion.

TRENDMANAGER

Your edge in working with trends

With the Trendmanager you create the substantive foundation for strategically grounded innovation.