When you step into The Banking Hall in Cornhill, the first thing that hits you is the impressive space. Today you can hire it for an event or party for 280 seated, or around 800 standing guests. The building signifies power and security and between 1930 and 2002 was the Head Office of Lloyds Bank. =It’s certainly impressive, and signifies a time when face-to-face transactions were at the core of retail banking. Today, when it comes to servicing customer needs, a large footprint isn’t necessary. Indeed with Cornhill office rentals reaching around £250 per square foot it would seem a very expensive option.
While banks and other financial service providers no longer need imposing facilities to impress customers of their strength and security, the other extreme of no physical presence, though effective from a cost cutting perspective, runs the risk of ‘throwing out the baby with the bath water’. They may not expect large high street premises in every town, but the evidence suggests people still want their bank to be there when they need it, and not just at the end of a phone. Certainly branch usage has declined (from 478 million customer interactions in 2011 to an anticipated 280 million this year) to the extent that the average branch has 71 customer visits a day. The reverse of this is that there are still significant numbers of people who are not comfortable with Internet or mobile banking and perhaps surprisingly, branches are still popular with younger people. There is another group of people who, although infrequent branch users, still expect it to be there when they need it – and the service they require can’t be replicated by a self-service unit. There is no doubt that when you close a branch you lose something in terms of customer service. But closure isn’t the only option. In some locations you can have the benefits of a traditional branch without the associated costs
So how do you provide the service people want (albeit less frequently) without the costs associated with a traditional branch? In the US and elsewhere, banks are increasingly looking to micro-branches as alternatives and indeed in some instances (for example India) as a means of generating new business in rural areas. So what do we mean by a micro-branch and where could it be located? Most importantly we are looking at the provision of a range of financial services within a significantly smaller and therefore less costly footprint. They should provide a cost-effective, flexible and convenient delivery of banking services. They will be staffed, and this means by multi-skilled ‘universal bankers’ who are able to advise on a variety of service options, and will feature a mix of teller recyclers and ATMs. Though they are smaller footprint they still provide a significant branding opportunity in key strategic locations.
At Glory we are working with a range of customers to ensure they are delivering the right mix of assisted-service technology and personal service in a location and footprint that meets their customer needs. Size isn’t everything. In sport spectators sometimes refer to an individual or team ‘punching above their weight’. With the right technology and design you can still have the competitive edge a physical presence provides.