Despite bank branch closures making the headlines, branches remain an important channel for customers, according to McKinsey in its look at re-imagining the bank for the digital era. Branches are also a stronger determinant of overall satisfaction than either the online or the mobile channels. McKinsey puts this down to the "physical comfort" branches provide customers, providing human interaction, a local presence and a place of trust.
Banks have cited cost cutting and lack of footfall as the key reasons for closing branches. But Deloitte doesn’t believe banks should abandon branches yet. Its survey findings show that branches have a unique value. Instead, Deloitte’s 2019 digital customer survey maintains that branches shouldn’t be viewed as a standalone service, but instead should “fully and seamlessly integrate branches into the bank’s overall digital transformation strategy.”
The focus is on multichannel business, allowing customers to get easy and instant contact with the bank from wherever they are via smart devices, apps, voice calls and so forth. This also incorporates innovation and adding digital capabilities to branches, which will enhance convenience. This includes extending business hours utilizing virtual remote meetings with a personal banking representative or in-house robot assistants that can deal with initial queries and basic banking services. HSBC claims its trials of the Pepper robot have been so successful at boosting branch footfall, ATM transactions and credit card transactions that it is rolling out robots across branches nationwide.
Networking key to branch integration
Robust networking is key to incorporating the branch into retail banks’ digital strategies as part of an omnichannel user experience. Many retail banks, however, are hobbled by the challenges of legacy systems, which were not created to handle hefty cloud workloads. Widespread skill shortages and increasing operating costs further complicate the expensive maintenance of WAN infrastructures. This makes it difficult for branches to provide the omnichannel experience today’s customers expect. Software-defined WAN (SD-WAN) can improve agility and application visibility and reduce connectivity costs, while providing robust security in supporting digital branches and private cloud.
In its survey on the impact of SD-WAN on WAN strategies, Frost and Sullivan found the top SD-WAN benefits viewed by CIOs to be 24/7 resilience and business continuity, the ability to enforce granular policies together with superior application and WAN performance. In addition, there is the appeal of flexibility and pop-up locations for retail banking.
SD-WAN, alongside hybrid cloud service and network and application security, are the top priorities for businesses over the next 24 months, according to Roopa Honnachari, Business Communications Services and Cloud Computing Services Industry Director at Frost and Sullivan. “This is no surprise, they are intertwined and directly support the top business driver of improving the overall customer experience,” he says.
Consistent communications
According to IDC, SD-WAN is one of the fastest industry transformations it has seen in years. It expects the market to grow at a compound annual growth rate of 40 percent to 2022, reaching $4.5 billion.
SD-WAN’s attraction is its ability to rapidly set up and seamlessly connect remote branch locations to a private network easily and securely and in a highly cost-effective way. Retail banks, for example, can open up branch offices in regions where they see an opportunity for growth. They can now set up a network in days instead of weeks without the necessity of on-site support. A centralized management console enables network and security functions to be configured, controlled and tweaked remotely according to requirements.
At the same time, rural branches can have access to the same cloud-based tools as urban locations, thanks to strong, stable and dependable connectivity. Unified communications can be deployed with minimum pressure on the help desk. And to improve the customer experience, the branch can offer free Wi-Fi, remote expert video applications and kiosks.
“Retail banking clients are going through significant transformation. Their new business models require flexible and agile integration of cloud-based services and software applications. At the same time, multichannel and mobile technology solutions are key to driving a superb customer experience,” explains Philipp Ringgenberg, Head of Business Innovation and Verticals at Orange Business.
Flexible SD-WAN from Orange Business, for example, provides a fully-automated, intelligent network designed to offer on-demand virtualized services. It is centrally developed for end-to-end performance and control, providing retail banks with the visibility and consistent communications they demand as part of their transformation.
SD-WAN’s ability to leverage connectivity offerings including MPLS, LTE and Internet broadband services in real-time to prioritize the best path for data across the network is a boon to financial institutions for real-time data such as VoIP and videoconferences. In the future, we'll see 5G added to this list. Multiple technologies will build on the SD-WAN approach. Barclays Video Banking, for example, enables customers to have a secure remote conversation with a banking representative on a smart device. This trend will continue as it enables retail banks to provide a more personalized service to customers, allowing large retail banks to appear more local and accessible.
This hybrid approach to SD-WAN ensures that mission-critical applications have priority on the network and can help break the silos between physical and digital retail banking channels. It also enables banks to move to lower-priced bandwidth products to reduce costs without sacrificing quality of service. ING Bank in the Netherlands, for example, enables customers to make appointments at their nearest branch using their online banking portal, while carrying out other transactions remotely.
The app economy
Europe’s push for open banking has seen a growth spurt in app-only banks – which offer many of the services as traditional banks – but without physical branches. These challenger banks, such as Monzo and Bunq, are built on agility.
To compete, traditional banks are also increasingly introducing app-based services, such as robo-advisors, and are introducing investment cockpits, performance automation tools and analytics to increase productivity and efficiencies. But providing a powerful, premium service requires a network with sufficient bandwidth to address the stream of diverse customer requests coming in. Again, this is where SD-WAN comes to the fore, providing retail banks with dependable secure connections to multiple cloud services.
SD-WAN also supports the automation of an extensive range of services, such as virtual personal loan officers for banking customers, and enables them to be extended across branches thanks to a centralized management console. This makes for a seamless user experience.
Meeting the demands of next-generation technologies
It is imperative that retail banks adopt next-generation technologies and services, such as big data and analytics, the Internet of Things (IoT) and artificial intelligence, to meet the growing demands of customers who wish to deal with their financial affairs anytime, anywhere.
SD-WAN can meet the needs of these next-generation technologies with a robust network built on agility, flexibility, scalability, security and compliance and delivering an end-to-end premium customer experience by providing a broader array of branch services at sustainable costs.
If you would like to explore our SD-WAN offerings or find out more about our finance portfolio, download our brochure: The digitization highway for financial services.