The announced death of bank branches? The French exception!
In a context of profound challenge to the retail banking model, the question of the networking of bank branch networks is regularly the subject of questions and analyzes in France aimed at demonstrating the need to reduce their number. The health crisis, in particular by giving new impetus to remote banking, using the digital channel and self-care, accentuates the question of the need to rationalize banking networks.
In this context, certain establishments in France, in particular the private networks, have already started a movement in this direction, with reductions of between 10 and 20% in the number of agencies operated in recent years. The announcement of reflections on a merger of the Societe Generale and Crédit du Nord brands, with an expected impact on the combined physical network, is a new sign of this trend and confirms that this restructuring movement is continuing.
However, we remain far from the levels observed elsewhere in Europe, down to -50%, and France has around twice as many bank branches per capita than the average for other European countries . In our opinion, banks have good reasons for wanting to keep a network, however large, alongside their remote relationship centers and the digital channel:
- The network remains a differentiating factor vis-à-vis purely online banks. Neobanks that can rely on a physical network generally stress the importance of this relay for their visibility.
- They are not in a position to carry out all of their operations remotely and / or via digital technology , and in particular certain more complex customer journeys, in particular those which correspond to “key moments of life”.
- They must support the “slow convergence” of their client base, and in particular of some of their historical clients, who are less independent and for whom the agency risks remaining a privileged channel of exchange with the bank for a long time to come.
The essential question of omnichannel customer relationship management through customer value
On the other hand – and perhaps more than the question of their number? – it seems to us that the issue of the branch network must be part of a broader reflection on the omnichannel system as a whole, drawing inspiration for example from what has been done in other sectors, like Telecoms for example.
We therefore believe it is necessary to adopt an approach that allows us to answer the following questions in particular about the service to be provided to the customer:
- End-to-end routes to be digitized and automated, so as to more systematically “deport” certain acts, particularly simple and worthless, from the physical channel or long-distance relationship to self-care / digital.
- The selection of certain customer journeys on which we still want to maintain a “through the channels” approach, which still allows the customer to start an action online, then to finish it in a branch or online with customer service.
- The ability to differentiate and personalize these approaches according to the target customer segments.
The crest line between customer satisfaction and cost reduction … fortunately very easily reconciled objectives
This approach is based in particular on the establishment of financial indicators, in particular “cost to serve”, quantification of the investments to be planned for the digitization of processes on the one hand, and on the other hand data on customer satisfaction / NPS on the various routes and canals. Thus, we can have quantitative elements which:
- make it possible to objectify the points of dissatisfaction and additional costs for the bank , and thus help in the diagnostic phase of the omnichannel system;
- shed light on the question of the expected return on investment for the various scenarios analyzed, in particular with regard to the investments to be made;
- are thus used to decide on key priorities in terms of digitizing customer journeys and end-to-end processes;
- provide a long-term management tool for the process thus undertaken and the progress made on it, both in terms of customer satisfaction as well as processing times, financial impacts, etc.
Tools and data serving the development of an efficient “physical” model
Other basic elements are also likely to favor this approach over time and the creation of value provided by it, in particular through recourse to the optimized use of the data:
- a more in-depth culture of the value-based approach to investments and a more analytical view of costs by process, channel, customer segment;
- a more in-depth and more systematic measurement of customer satisfaction (use of hot NPS indicators for example);
- customer knowledge tools including CRM serving all channels and shared between them
- the symmetry of tools between employees and customers , and continued efforts to train staff in contact with customers
Finally, it seems to us that this approach, in addition to contributing to the better operational efficiency of the system, is also part of the deeper transformation of the banking model necessary in the long term , but which may take a long time to implement. given the problem of “convergence” mentioned above. This transformation involves in particular a reflection on the role of the advisor and the sales system in the branch, in relation to remote customer service and the digital channel, which are also likely to evolve, to better deliver the “personalized service” requested by customers. The implementation of a tighter management of the omnichannel system seems to us to go in the direction of this objective, in a context where banks want to move towards a more optimized “phygital” mod
Laure Lemaignen, Managing Partner PMP
