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Forrester advises bank branch upgrades
Thursday, May 02 2002
by Andrew McLindon


Banks will need to do more than Web-enable branches if they want to reduce
operating costs or improve customer service, according to Forrester Research.







 



Forrester estimated that European banks have invested around EUR13 billion in
Internet and call centre technologies between 1999 and 2001, but said they have
yet to see the results of such investment. During that time, many banks have also
reduced their physical branch networks.

 



Nearly three-quarters of European banks interviewed by Forrester believe the
Internet has had little or no impact on branch distribution and just over 60
percent said that branches will remain the dominant banking channel by 2007. 

 



In this context, Forrester said that banks should now look to transform their
branches into networked service centres. The research company defines such
facilities as lightly staffed collaborative service centres based on open
standards and connected to internal or external service networks through
integration hubs. 

 



"These centres would be based around collaborative networks that allow branch
staff and customers to interact with each other in a much more efficient manner,"
Forrester senor analyst, Remus Brett, told ElectricNews.Net "For instance, by
using instant messaging or a video/audio link, a client looking for specific
information could communicate from their local branch office with a specialist in
the field who might be based in another part of the country." 

 



Brett said that the introduction of such technology would also give bank agents
more detailed information about customers. "They could view real-time customer
profiles and data such as Web usage and a client's history. This would give staff
a new sales tool and increase customer satisfaction," he commented. 

 



According to Brett, banks would also be able to reduce costs in the areas of
development and maintenance through introducing such centres because they would
centralise customer applications such as bill payment and fund transfers on
integration hubs. In addition, staff would be able to work more efficiently due
to the introduction of workflow technologies. 

 



He added that banks generally have not updated their branch technology in around
five years and should now start doing so with priority given to those branches
that have been ignored the longest and those with the best profit potential.

 



The Forrester report notes that some banks are making moves in this regard with
nearly half of the firms surveyed saying they have begun to connect their
branches to on-line banking applications as part of a multi-channel integration
strategy, and another 24 percent plan to do so. Close to 40 percent of banks
believe such initiatives can cut costs by upward of 15 percent and also improve
customer service.