By Brian Holden, Director, Financial Services at SAS
For years, we’ve heard that branch banking is on the way out. Banks have been focused on the idea that younger generations want to do everything online, and digital transformation initiatives have centred around creating seamless user experiences on web and mobile and a truly networked society.
At the same time, visiting the local branch has been synonymous with manual processes, paperwork, inconvenience and inefficiency. And that’s not just the perception of customers—it’s what the industry thinks too. Over the past few decades, if you were looking to build a top career in banking, you would look to the skyscrapers of Canary Wharf, not the branch on your high street.
Bringing the human touch back to banking
But how quickly things change! Over the past few months, COVID-19 has confronted many people with a prospect of financial distress that they could never have imagined at the start of this year. And despite all the investment in call centres, online banking websites and mobile apps, the digital infrastructure that banks have built over the past decade hasn’t been the panacea that everyone expected.
Banks are realising that customers don’t want to do everything online after all. When their livelihoods and businesses are threatened, they don’t want to wait on hold with the call centre—they go to their local branch because they know they’ll get an answer. And when they’re really worried about money, they want personal advice and face-to-face support from a real human, not just a set of recommendations on a website.
As a result, the crisis has shown the branch in a completely different light: it’s not on the periphery, but at the heart of the banking community.
That’s not to say that digital banking has failed, or that digital investments have been wasted—it’s just that the crisis has highlighted something that should have been obvious all along. Banking isn’t just about processing financial transactions; it’s about helping people live the lives they want to live. It’s about making banking simple, safe and rewarding. Nothing is more personal or more emotive than a small business owner’s dreams or a family’s financial security.
We live in a network society, that’s true—but the network is fundamentally built on human relationships, not technology. Bank branches are critical nodes in that network. You can’t extract those nodes and expect everything to function in the same way. So instead of trying to invent some new means of personal banking interaction online, why not use the ecosystems and talent we already have, and give the branch its due as a trusted focal point for the local community?
From central to local
At the same time, those city skyscrapers no longer seem to be gleaming quite so brightly. Although security and regulatory compliance considerations have historically made many banks resistant to the idea of allowing employees to work from home, the pandemic is forcing them to push those boundaries.
With the ongoing risk of contagion, people are no longer willing to spend several hours a day packed like sardines into a tube carriage just to get to the office—and this is a situation that may continue indefinitely.
Under these circumstances, the branch begins to look like an attractive option not only for traditional branch-based functions, but as a decentralised workplace. By providing a secure location where employees can access bank systems, it eliminates the compliance concerns of working from home, while ensuring that staff aren’t obliged to commute into central offices unless they really need to. Moreover, with the cost of a desk in Canary Wharf estimated at around £100,000 per year, there could be significant cost savings from moving to a more branch-based model.
This isn’t just blue-sky thinking—it’s something that major banks are already actively exploring. Jes Staley, Group Chief Executive of Barclays, has gone on the record about rethinking the balance between central and local, potentially enabling investment banking and call centre teams to work from retail branches. With around 70,000 Barclays staff currently working from home due to lockdown, he told the BBC: “There will be a long-term adjustment to our location strategy. The notion of putting 7,000 people in a building may be a thing of the past.”
Finding the right level of automation
However, if we do see a shift towards more of a hub-and-spoke model, with more responsibility shifting from central office to the branch network, branches can’t stay locked in the past. The in-branch experience needs to be just as simple, fast and seamless as the web or mobile experience should be. Customers won’t tolerate queues, paperwork and manual processes, and they’ll expect consistent service regardless of how they choose to interact with their bank.
Offering the right advice and support to each customer across all channels is a challenge that can only be solved with the right combination of people, processes and technology. Essentially, you need to find a way to make the right information available to make the right decisions at the right time and embed those decision support mechanisms into all your customer-facing business processes.
The value of intelligent decisioning
At SAS, we call this “intelligent decisioning”—empowering humans with real-time insight through artificial intelligence and data-driven decision support. By adopting an intelligent decisioning fabric, banks can either automate decisions completely or provide recommendations that customer-facing staff can act upon instantly. This intelligent level of automation puts human expertise back at the heart of banking: it clears away the routine decision-making and frees up time for advisors to focus on the more complex cases, where their expertise is really needed.
An intelligent decisioning fabric is vital for any bank that aims to provide customers with truly personalised service either in-branch or via the call centre during the current crisis, when many customers find themselves in unprecedented need of their bank’s support.
The future of offshore banking
By Granville Turner, Director at Turner Little.
Despite its misconceptions, the popularity of offshore banking is growing. Not only is it a perfectly legal way of holding your money, but with the right professional advice, it is also reassuringly simple to open an account.
This ease-of-use is prompting many offshore banks to change their offering to compete and make overseas banking even more accessible. No longer is it limited to just the super-rich.
So, what does the future look like for offshore banks? We’ve compiled a list of the top fundamental changes happening in the realm of offshore banking.
Catering to niche markets is the future
Rather than managing account holder’s money in general, offshore banks are tapping into how they can best serve different demographics. Essentially, it is about taking a more bespoke approach to managing money at various stages of life.
But catering to a variety of markets doesn’t just stop there. Many overseas banks are now accepting crypto as a form of currency to appeal to digital, tech-savvy generations.
Cryptocurrency is also attractive for those who see the security benefits it can offer.
Paper chains are fast becoming a thing of the past
As banks move away from paper in favour of digital, security is on everyone’s minds. This is because information is an important asset to many businesses, so protecting it is vital. As such, banks are securing data with the most vigorous encryption security standards.
For account holders, this means digital bank transfers and communication become less of a risk and the smarter thing to do. Paper chains are fast becoming a thing of the past.
Instant access, day or night
In today’s digital world, you don’t need to travel overseas to open an offshore bank account; everything can be done online or over the phone. And like most UK standard current accounts, many offshore accounts now offer online and mobile banking features. So account holders can manage their offshore finances and investments while transferring funds with ease.
Offshore banks are following the same route of challenging onshore banks by going branchless. This offers substantial benefits for account holders, as branchless offshore banks don’t pass on as much overhead costs to the customer. Ultimately, this means customers can earn better interest rates and other returns on their investments.
Happy to help
At Turner Little, we work closely with offshore banks to provide you with quality service tailored to your needs. With over 20 years of international banking experience and specialist expert knowledge, we will assist you with your enquiries, no matter how complex. And every account we arrange comes with internet banking, card facilities and the ability to transact internationally.
Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos
- WeLab Bank designed, built and launched using cloud-native Temenos Transact in less than 10 months
- WeLab offers next generational digital services for the 7.5m people in Hong Kong to access from their mobile phones
- Customers can open accounts remotely in just 5 minutes with bank reporting 10,000 account openings within 10 days of launch
Temenos (SIX: TEMN), the banking software company, today announced that WeLab Bank, Hong Kong’s first homegrown virtual bank, has publicly launched using cloud-native Temenos Transact to provide a range of next generation digital services for customers to enjoy 24/7 from their mobile phones. Designed, built and launched in less than 10 months, the fully digital bank has seen rapid take up with a reported 10,000 account openings within the first 10 days of launch.
WeLab Bank is powered by cloud agnostic Temenos Transact for core banking along with Temenos Analytics and Financial Crime Mitigation. Implemented on Amazon Web Services and Google Cloud, WeLab is the first multi cloud digital bank in Hong Kong. Operating on multiple clouds at the same time gives WeLab increased operational resilience and disaster recovery capability and is a regulatory requirement of the Hong Kong Monetary Authority for new digital banks. According to the Economist Intelligence Unit 2020 report for Temenos, 81% of global banking executives surveyed believe a multi-cloud strategy will become a regulatory prerequisite.
Developing a cost-effective and scalable core banking solution was paramount for WeLab. Temenos cloud native software is built for the digital age using API-first and DevOps principles and engineered to deploy in containers and microservices. This makes it easy for WeLab to scale for future business growth efficiently and eliminates the need to provision for peak processing volumes so that the bank only pays for its actual usage, yielding significant cost savings.
Critically, with NuoDB the solution delivers a cloud-agnostic, distributed relational database that enables WeLab to deploy an active-active on-demand database across multiple cloud providers with near zero downtime failover.
Temenos Transact is a preconfigured system and so requires very little coding and with Temenos model bank to address local practices and regulations, WeLab was able to bring its service to market faster and extend its innovation with more than 400 out-of-the-box APIs.
With Temenos, WeLab bank is set to transform banking in Hong Kong. In as fast as 5 minutes, customers can remotely open a WeLab Bank account with $0 monthly fees and start enjoying differentiated services such as time deposits with competitive rates, an interest-bearing deposit account with an instant virtual Debit Card, and real-time payments powered by Faster Payment System (FPS). Everything can be done on a mobile phone, simply and effortlessly.
Adrian Tse, CEO at WeLab Bank, commented: “WeLab Bank was born from an initiative to reimagine the banking experience for the 7.5 million people of Hong Kong. From the start, we knew this vision needed the most advanced cloud native technology and a partner that shared our vision for digital transformation. With Temenos we have efficiently built WeLab Bank from scratch, free from any legacies, with innovative features that proactively help customers to take control of their money and their financial journey.”
Max Chuard, Chief Executive Officer, Temenos, said: “Congratulations to WeLab Bank on the launch of their trailblazing new digital bank. Building and launching a licensed bank in such a rapid timeframe is a fantastic achievement and we are proud to have supported them in becoming the first multi-cloud digital bank in Hong Kong. Temenos cloud-native, cloud-agnostic strategy means we can satisfy the needs of the most innovative and ambitious neobanks like WeLab Bank to run on multiple cloud providers. We know this is just the beginning for WeLab and we are excited to be part of their story as they revolutionize banking for people in Hong Kong.”
Bob Walmsley, CEO of NuoDB said: “We are excited to be partnering with Temenos to help WeLab Bank achieve their aggressive launch timelines and deliver innovative banking services to its customers. We were inspired by the technical vision of WeLab and knew that executing an on-demand, multi-cloud strategy was a perfect fit for NuoDB. Our enterprise-class, distributed SQL database combined with Temenos’ cloud-native technology helps banks of all sizes around the globe migrate to the cloud to improve agility and reduce costs.”
The Bank is Where the Heart Is
By Nick Barnes, Practice Director, Financial Services & Customer Success at JRNI
When unexpected events occur, people turn to their banks to provide a sense of trust, security, and stability. They need to be available anywhere, anytime, and from any device. As it’s a business based on trust, one-on-one communication is key.
With the world still emerging from the COVID-19 crisis and endeavouring to avert a possible second wave, every country, state, and region has their own unique requirements. Plus, every customer or member has their own demands. Experts and pundits have discussed a new normal, but what’s normal for now involves keeping customers and employees safe while also providing the same sense of stability as before.
For banks, building societies and credit unions, the main concerns include how to maintain personal relationships amidst social distancing; how to be available at any time on any device; and how to provide a sense of calm and security amidst the chaos.
Adapt or fall behind
Customers are quickly learning which of their service providers are adapting best to this new world. Are financial services providers like banks and credit unions adapting, or falling behind?
Finances are a highly personal topic, and often, illogical or emotional. Will I have enough? Will it be available when I need it? It is always a hot topic of conversation, but especially during a pandemic when unemployment rates are rising, and the economic landscape is unsettled. In the past, a customer could walk into the bank, have a reassuring conversation with a representative and move on.
So, how can banks help their customers through tough financial times during the current crisis, when in-person communication is nearly impossible? One solution is to provide helpful, personalized customer service through digital channels.
While in-person assistance will remain important after COVID-19, customers are looking for assistance now. Banks are turning to remote video and voice appointments to boost customer satisfaction and meet customer expectations.
3 reasons to use remote appointments
1. To comply with social distancing
Our Modern Consumer Banking Report last year showed that when consumers visit branches, it’s primarily to talk face-to-face and ask questions/get help. Research from Bain reinforces this, and emphasizes that “many retail banking customers think it’s easier to purchase through a human channel, or prefer to speak with an employee before buying a product.”
Due to social distancing measures, branches cannot be customers’ primary way of managing their finances during this pandemic. However, this doesn’t mean that customers aren’t interested in personalized attention that can be made available via video and voice.
2. To meet new demand
Although spending habits may have changed, consumers are still making critical financial decisions during the COVID-19 pandemic.
Individuals: The financial effects of coronavirus are drastically different from one customer to the next. While some are counting down the days to receipt of their unemployment check, others may be taking advantage of low-interest rates to buy a house. Ultimately, banks and credit unions need to address each customer segment with a unique message and way of providing assistance.
Small business banking: Countless small businesses around the world have been forced to close their doors. Whether they’re needing loans, payment deferrals, or advice, small businesses are looking to their bank as a guide, and a comfort.
Investment management: A recession is upon us, and with that comes a new approach to investing. Financial advisors are fielding questions, providing recommendations, and staying up to date on the market. Beyond this, many are building entirely new strategies for their clients.
Regardless of customer type, it’s clear that each subset of customer needs help from their financial institution at this time.
3. To boost customer retention
Financial institutions cannot afford to lose customers during the pandemic, so customer retention is crucial. Great customer service boosts customer loyalty, and research from Bain shows that loyalty is key to retention:
- Customer loyalty increases revenue, and loyal customers are less likely to switch to a competing bank.
- Customers who are a bank’s “promoters” recommend the bank to others as much as six times more than “detractors.”
- A bank’s “promoters” spend one-quarter more than detractors on their primary credit card.
Ultimately, being able to connect with a customer in need using video or voice can give customers peace of mind and boost loyalty. Delivering personalized financial services without interruption is crucial.
Initial results from video banking show that consumers consider the service valuable. Phoenix Synergistics’ survey from December 2019 found that 17% of customers polled had used video chat through a website or app with their financial institution. Of those that had used video chat, 89% found video chat valuable.
Some suggestions for banks using remote video or voice appointments would be to: firstly ensure your solution is secure and doesn’t expose personal information outside of the conversation; secondly create a culture of consultation to alleviate outstanding fears; thirdly leverage appointment setting to allow customers to pre-schedule consultations and enquiries; finally include remote appointments as part of a wider suite of ‘touchless’ offerings.
The dos and don’ts for bank branches
Forty-three percent of banking customers have expressed their desire to change the way they bank due to the pandemic. As with retail and hospitality, several key customer segments have doubts about visiting physical locations and are transacting more remotely.
The challenge for banks is to make services available wherever customers want to bank – be it by phone, online, or in branch – and when it comes to any transaction, the key is to make customers feel cared for, heard, and secure.
With social distancing parameters in place along with other health and safety measures, there’s significant focus on the need to retool the branch experience. Here are a few suggestions as we move into that next stage of business and interaction:
DO: Have a plan.
Think about how customers will enter and exit each location. Plan for increased space between people in line, how to attend to at-risk customers, properly spaced lobbies, and waiting areas. Consider your employees and what they need in order to stay safe including break rooms with increased space between lounging areas, removal of shared snacks, availability of hand sanitizer and masks.
DO: Make sure you can effectively manage footfall.
Overcrowding will create fear and loss of trust. Make sure you have plenty of directional signage, crowd control measures, and staffing. Solutions including people counters, occupancy managers, and pre-booked appointments both allow for the throttling of traffic, and the ability to build in cleaning time.
DO: Hire the right team and staff adequately.
Being courteous and in control will be the most important ingredient to success. Have enough staff, you will need the extra hands to ensure that all staff is properly trained and ready to enforce new protocols.
Some customers will be understandably anxious going into branches, and some will want to feel that everything has returned to normal, so staff may need to be very firm and well-versed in a new operating style.
DO: Offer customers the ability to bank when and how they prefer.
We’re not suggesting that you remain open for 24 hours, but the goal is to make it easy for the customer. Adding the ability to set an appointment with a wealth manager or an advisor online will enable customers to bank from home, and will enable banks to provide the personalized service customers have come to expect.
Leverage online appointment confirmations to remind customers to have key documents available if they need them. Virtual solutions position the bank to serve as an advisor rather than just a financial institution.
DO: Demonstrate your commitment to a safe environment.
Use clear signage to convey the measures in place to ensure customer and employee safety. Make hand sanitizer or wipes available throughout the branch, and in all high-touch areas. Ensure cleaning supplies are visible, around doorways and near greeters to provide customers with an added sense of security. And make sure that employees are following every measure required of customers.
DON’T: Lose customer confidence.
If you are not prepared, it will show, and it will be very hard to gain back customer confidence once compromised. Social media will not be your friend. Forrester Research reports that 52% of US online adults prefer to buy from companies that demonstrate how they are protecting customers against the threats of COVID-19.
DON’T: Overcrowd or fill your branch to capacity.
Consumers are being trained to avoid crowds, so failure at the branch to comply could result in losing their business. Most physical locations are operating with fewer staff and accommodating 10 – 25% of the traffic once allowed. Keep in mind that you only have one opportunity to make a first impression on customers, and they’re looking to trust you have their best interests in mind.
You will need to expect the unexpected and having more hands-on deck will prove to be beneficial in the long run. Having the wrong staff, or those that don’t take the time to learn new operating procedures or feel comfortable telling that customer who won’t keep a mask on, may not be the best fit.
DON’T: Make it difficult for customers to do business with you.
Social distancing introduces a number of disruptions to the way you’ve traditionally done business. So limiting options to customers – providing no ability to bank online or via phone, not having a live customer service voice or chat option – is not going to help. In addition to making sure the services are available, it is imperative to communicate all options to customers.
DON’T: Assume someone else will do it.
Bank staff need to show that the branch is being tended to, cleaned between visitors, and before opening each day. It is important that staff jump in to help move customers safely through the branch, ensure their questions are answered and overall, take a proactive approach to service without assuming that a sign or another staff member will take care of it. Customers will come to the branch, but gaining their confidence is everything. Don’t lose it by not being prepared. It will be very hard to win it back.
With the constant threat new restrictions in response to COVID-19 outbreaks, banks will need to take a long view on how they enable the operational flexibility that will be needed to adapt to fast-changing conditions. As people prepare to live more risk-averse lives, banks will need to go the extra mile to ensure customers feel less wary about visiting in person whilst also offering a seamless experience for those customers who prefer to remain in the safety of their homes. Those that manage to do so will emerge from the crisis with a sustainable advantage over their competitors.
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