Smart bank branches must first and foremost be people-centric

THE traditional bank branch as we know it, with most of the floor space devoted to tellers behind counters and bankers hidden in cubicles with desktop computers, seems headed for eventual obsolescence.

In July, OCBC Bank said it would cut the number of bank tellers by half and retrain affected staff, prompting concerns about whether there will be similar changes across the banking industry here.

The writing has in fact been on the wall for some time now. Technology has changed the way financial services are being provided and used. Consumers in Singapore, like others elsewhere, are increasingly using their smartphones for electronic payments and other banking transactions. According to a McKinsey study, financial institutions globally now process far more transactions digitally than in branches, heralding the advent of the "smart branch" - one which uses technology to boost sales and improve customer experience significantly.

But making branches smart is not a matter of simply installing new machines or buying a suite of tablet computers. Smart-branch transformation builds on three pillars: the seamless integration of cutting-edge branch technology, which has become cheaper, more reliable, and more accessible; the adoption of radically new, teller- and desk-free branch formats at every location; and the use of digital technology and advanced analytics to improve the operating model in branches, including personalised, data-driven sales and real-time performance management and skill development.

At the end of the day, for retail banks, the move must mean a better end-user experience, which hopefully will translate to more sales and business.

For retail banks, McKinsey experts say technology has several goals: the migration of transactions and sales to digital channels, 24/7 customer access for every interaction, a personalised approach to sales, and a unified, omnichannel user experience - meaning that customers get a seamless experience whether they are online, on a mobile application, or at the branch. Customers should be able to come into a smart branch and get anything they need - from new products like loans or credit cards to financial advisory services - quickly. And no matter what platform or device is being used, the user experience should be consistent.

Despite such systemic changes, branches will remain an essential part of banks' operations and customer-advisory functions. Brick-and-mortar locations are still one of the leading sales channels. Even in digitally advanced European nations, between 30 and 60 per cent of customers prefer doing at least some of their banking at branches, McKinsey notes.

As banks transform the way they do business, it is critical that they remember to take a human-centred approach to convenience - for customers as well as staff - and not just focus on hot new technologies. It is reassuring that the Monetary Authority of Singapore (MAS) is working closely with the banks and unions to pre-emptively reskill and redeploy affected employees into new job roles, be they in relationship management, quality assurance, process re-design, data analytics or digital marketing.

Technology is changing not just the financial sector, but industries across the board. No matter how far technology advances, people should come first. There's no better brand tag than that.