From production line to personalized banking: Are we coming full circle?

30 October 2012

United Kingdom

Paul Race



The other day whilst getting around to eventually de-cluttering my loft, I came across a box of my old school exercise books. Flicking through my history book, I remembered lessons about the English industrial revolution and learning about inventors such as Crompton and Arkwright, who turned cottage industries into mechanical production lines in the textile industry.

Later on in the book there was also some work on Henry Ford, who was a pioneer of the production assembly line. Crompton, Arkwright and Ford: all important characters who shaped industry.

But are they to blame for depersonalizing our lives? When I worked for a bank, our bank manager was the pillar of the community. People put on their best suits to come and ask him for money, and all the banking relationships were ones that we hand-made.

Then, along came the big mainframes to handle the volume and they turned branches into transactional warehouses just like a Ford assembly line. A few years later self-service ATMs came along, again making banking less personal. Like a textile mill in 19th century England, bank branches had become production lines.

Are we now coming full circle? Whilst mobile and Internet banking will continue to erode branch transactions, the branch is a key channel for customer intimacy, and for developing and maintaining long term relationships.

We are seeing more and more examples of the debunking of assembly line economies of scale: unique personalization of credit cards by Barclays Bank; recruiting people specifically skilled in relationship-building, as has happened at Virgin Money; channels that complement one another rather than competing, as at Tesco Bank, where 62 percent of financial products are sold online to customers previously acquired in-store.

So welcome back the personal branch, where the focus is on providing clear and simple advice and face-to-face, honest problem solving, and where customers once again receive a more hand-crafted service.

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