Less in-person banking should mean smarter branch design, not more closures
The mass takeup of digital banking and mobile bankers has led to a sharp decrease in branch visits. While maintaining excess overheads makes no sense, shutting branches will lead to a loss of customers. So, the million dollar question is, how do you maximize the return from your physical spaces?
Fewer branches is not the answer. Yes, closing 10% of branches will slash costs in the short-term, but it will also lead to lost customers, less differentiation and a race to the bottom on margins over the long term.
As we covered in Why the rise of digital banks makes branches more important than ever, when up against pure-play digital banks, the branches of legacy players provide a major competitive advantage. They leverage the personal relationships, community connection, face-to-face service and brand trust that have long been integral in financial decisions.
How can you intelligently reduce, reconfigure and optimize your overall property footprint and design to realize savings without sacrificing branches or service quality?
The barrier to optimizing space is a lack of real-world data
We know that less branch traffic means reduced demand for tellers, meeting rooms, equipment and physical space. But how do you define precisely how much less?
Collecting the required operational metrics is a major challenge. Traditionally, tracking branch activity involved running manual time and motion studies. Beyond being costly and slow, they have major limitations. For example they extrapolate findings based on small samples, averages, assumptions and theoretical models, and they ignore seasonal variations, demand spikes and location specific differences.
In reality, the resulting data is a ‘best guess’ of compounding errors. It doesn’t provide an accurate snapshot across the network, let alone deliver the intelligence needed to identify optimization opportunities.
Real insights for intelligent property design are now possible
Fortunately, the latest artificial intelligence (AI), and machine learning (ML) technologies, combined with in-branch cameras and sensors have filled this intelligence gap.
By continuously and discreetly capturing and analyzing real-life branch activity, it is now possible to optimize physical branch design and resourcing based on up-to-date and detailed evidence including:
- Customer entry counts and arrival times – hourly, daily, weekly, seasonally
- Precise utilization frequency and times of each in-branch touchpoint
- Queue length, movement and waiting times
- Staff responsiveness and service levels
- Handling times
- Meeting room utilization over time
- Clear view of teller, staff and facility utilization and latent capacity in branches
- And much more
Use AI to cut capital investment and operating costs
Applying the latest AI and ML techniques to this data enables banks to optimize property sizes and layouts to minimize costs while maintaining target service levels and net promoter scores.
With access to real-world data and analytics, you can use intelligent queue simulations to deliver individualized branch design recommendations that not only cater for demand but maintain high quality customer service.
The latest solutions provide precise answers to important questions such as:
- How many meeting rooms and tellers do you need?
- Exactly what equipment and fitout is required?
- What floor space is needed to deliver target service levels?
- What staffing levels are ideal and how can they be best allocated?
- How can we dynamically reassign staff from physical to digital channels?
Whether you are refurbishing, moving, negotiating new leases or opening new branches, effectively optimizing the precise space, fitout, equipment and staffing needed to deliver the required customer experience will save significant costs without sacrificing service levels.
If you multiply these savings over hundreds of branches, and apply them across your rolling refurbishing, leasing and branch opening plans over, say, just the next two years, the savings are significant.
For example, we helped a major Australian bank optimize their workspace with powerful results:
“RocketBoots Beehive for Retail Banking showed opportunities to reduce refurbishment and leasing costs by hundreds of thousands of dollars over the life of the lease of a branch.”
By right-sizing your infrastructure, not only can you reduce your overall property footprint by thousands of square meters, but you can also cut your costs per square meter by saving on fitouts, technology, meeting rooms, furniture, air conditioning and more.
Proven technology and ROI
An ASX-listed Australian company, RocketBoots Beehive applies the power of AI, mathematics, machine learning, cameras, sensors and simulation to provide banks with real-world metrics and intelligent analysis.
The result: you can optimize physical space requirements and floor space usage for both customers and staff – improving the customer experience and maximizing capital investment.
With a rapidly expanding user base, RocketBoots has been deployed at 5 of the 7 largest banks in Australia, with proven return on investment and savings across hundreds of branches. As more branches re-open nationally and globally post-pandemic, growth projections are strong.
If your bank is interested in optimizing operational costs and improving customer service at scale, contact RocketBoots to learn more or arrange a demo.
CEO of RocketBoots (ASX:ROC), software that assists with the transition from branch to digital banking by optimizing staff productivity, service levels and property spend.