Whether you speak to customers or building societies, they will tell you just how important branches are – even as financial services and wider society continues to shift towards a digital-first or digital-only philosophy.
Branches are still deeply valued by members, who see them as staples of their high street and a cornerstone of their communities. The same is true for mutuals, with the overwhelming majority committed to maintaining or even expanding their branch networks.
As competitors continue to leave the high street and scale back their physical presence, branches serve a far greater purpose than simply as service points – they provide a real competitive advantage.
Realising this advantage requires mutuals to be proactive and embrace the right technology and processes. Rather than rounds of cost-cutting or reducing headcount, the branch of the future must be defined by efficiency and people-first processes – unshackling staff from resource-heavy, back-office complexity to focus on driving customer service.
Technology plays a critical role in this – not as the replacement, but the wingman – to carry the burden of operational processes and enable staff to do what they do best.
STRATEGIC RATHER THAN A COST
Branches are far from sentimental. Research continues to show that members place significant value on the ability to visit a physical branch and speak to someone – especially for big financial decisions like mortgages.
It’s not just among older generations either. Research by Newcastle Building Society found that among Gen Z (those aged 16-26), one in five described in-person banking as ‘essential’. Meanwhile, 75% of Millennials (aged 27-42) prefer face-to-face interactions rather than managing their finances entirely online.
At the same time though, the industry tide has certainly turned, with large banks closing branches and leaving towns and villages with limited banking presence. While the Post Office has tried to help with its Banking Hubs, their branches haven’t exactly been safe from the chop either.
This has undoubtedly created a vacuum, but also an opportunity. Rather than the last hold outs, mutuals that retain and importantly optimise their network can capitalise on this clear consumer demand and turn branches into a strategic asset.
KEEPING BRANCHES VIABLE
It’s a clear opportunity, but one that comes with a real challenge. Keeping a branch network alive doesn’t mean creating a time capsule of the days of banking past. To ensure viability, branches have to be more efficient and tech-enabled. We mustn’t go too far the other way though where each branch is a gin palace filled with self-service screens.
Keep colleagues front and centre, and allow technology to handle the heavy-lifting of those repetitive, resource-heavy tasks and processes. This can include automating key administrative tasks and integrating smart tech to deliver data-led insights and streamline customer communications.
Just as key is digitising the back end to simplify both the customer and colleague journey for mortgages and savings. This could include outsourcing key servicing processes to remove any friction and cut processing times.
This shift puts staff back in the driving seat and allows them to concentrate on nurturing that client relationship, building trust and providing expert guidance.
DRIVING EFFICIENCY THROUGH OUTSOURCING
It is certainly easier said than done. While building societies may be able to recognise the change required, it’s not guaranteed that they have the expertise, resources or in-house capability to execute such a strategy.
As a result, many are looking towards outsourcing to not only answer any knowledge gaps but to upscale and digitise their operations. This way, they can hand off key functions to experienced third parties who have greater knowledge and capabilities to deliver real efficiencies – whether that’s originations and servicing, or the likes of compliance and customer care.
Transferring the complexity of back-office tasks helps to unburden branch staff, while swift integration and deployment of tried and tested tech platforms accelerates adoption.
Unlocking that extra bandwidth at both a branch and mutual level means societies can focus on their core responsibilities and their duty to their members.
A BRANCH-FIRST FUTURE FOR MUTUALS
We continue to find ourselves in a sector and society where expectations are built around digital convenience and tech-enabled experiences. As we have seen though, consumers still want the reassurance of human service and a branch down the road.
Building societies are in the position to be able to offer all of this to members, so long as their branch network is operating efficiently.
In addition to embracing technology, outsourcing many of the complexities to an established third party allows building societies to optimise their branch network and deliver a real competitive advantage.
With a digital backbone driving efficiencies and colleagues at the heart of a customer-centric approach, there is no reason why branches can’t just survive, but absolutely thrive.
