Bank branches undergo a digital facelift


As mobile and digital adoption continues to grow at a rapid rate across Asia, banks in the region are looking at alternate delivery channels, even transforming the existing brick-and-mortar bank branch. 

Across Asia, kiosks are popping up to replace banks, transforming the traditional bank into a more interactive and digital experience. 

In Singapore, Citibank is taking steps to transform the physical branch after the launch of the Citibank Express earlier this year. Citibank Express is a standalone ‘smart banking machine’ which allows customers to do most of their banking through the machine, eliminating the need to visit a branch.

“It will firstly go into our branches, so it will enhance the experience from being a regular ATM into one that is a lot more intelligent and interactive and can do many more things. Right down to the point where we may end up just putting these in a location where we have no other presence and it could almost work like a whole branch, because you could go pick up the phone, talk to somebody, you can video with somebody, you can set up an account, you can even give us documents, we can give you a credit card,” said Vikram Sud, Head of Operations and Technology at Citi Asia Pacific.

Citibank Express also has omni-channel capabilities which allow customers to begin a transaction from one platform or device, and pick it up again through another channel, according to Sud, “The big advantage that we have in the way we built this out, it is built right off our core back-end systems so it is very well connected… it runs right off our core banking platform, and that is the experience we think will be the best for our customers."

Still in Singapore, OCBC launched FRANK in 2011 to capture the Gen Y customer base. Its stores are strategically placed in and around university campuses, and are marketed around the FRANK credit card and helping young people manage their money.

The stores are designed to allow customers to browse products by looking and touching, with sales people roaming around to answer questions.

Standard Chartered Bank in Hong Kong rolled out their first digital branch in early November, that lets customers can scan QR codes to research products. Its staff also uses digital platforms to introduce products to customers.

According to Benjamin Hung, Executive Director and CEO of Standard Chartered in Hong Kong, the digital branch will take advantage of innovative technology and user-friendly features and simple banking services will be conducted through digital channels within the branch. 

The Bank of the Philippine Islands is also taking on similar initiatives, Manuel Tagaza, head of e-channels, told FST Media previously.“In support of the branch transformation initiatives, we also plan to deploy more Cash Accept Machines to the bank branches.

"We have seen a steep rise in the number of transactions done in these machines, which indicates the wider acceptance among our customer base… This initiative, together with the push for the online, mobile, and phone banking channels, can make the branches more productive by enabling our front-liners to focus on more revenue-generating activities such as engaging in financial conversations with customers in the branch.”

Some branches may live

In Indonesia, much of the population remains unbanked, but for those who do have access to the physical branch it is still a vital and important part of their banking experience, said Alit Asmara Jaya, Managing Director of Bank Sinar Harapin Bali.

“Mobile banking or branchless banking will not leave the physical branch totally. There are transactions that cannot be done through mobile, for example, withdrawals, deposits or loan evaluation. Deposits and withdrawals can be done through agents and this means the physical representatives of a branch are still needed.”

In these less mature markets across Asia, the focus is very much on mobile banking, which does not service the need for cash withdrawals and loan applications. Banks will still need to function in a physical form to serve the larger transactions and reduce costs, according to Jaya.

“In the model of mobile banking/branchless banking we choose, agents function as the expansion channel of traditional banks. With the massive campaign and promotion, gradually the underbanked customers will be removed from the agents. Branches will not need to handle customers who only need small transactions and are using only one product at the branch.  It is a must for banks in Indonesia to start thinking about this kind of transformation because of cost, running a branch is expensive.”

While self-service kiosks may be the way of the future, their emergence does not spell the death of the branch.
According to Victor Khor, Head of Group Transaction and Alternate  Banking at Alliance Bank, the two platforms will complement one another.

“In Asia Pacific, the human touch is still very important for higher  value and consultative transactions. Therefore, the combination of electronic anytime, anywhere convenience backed up by high quality  personal services when required is paramount to a holistic lifestyle  banking offering."
In Australia, Andrew Fell, General Manager at St George Bank, said he fundamentally disagrees with the idea of the death of the branch. He maintains that all St. George branches which currently exist will continue to do so.

Speaking at the Technology & Innovation – the Future of Banking & Financial Services conference in Sydney, he said 20 per cent of transactions which happen today will remain in branch, and those are the ones he wants.