Future Branches in Europe

It’s not new that guessing how future branches will look is the ultimate headache; I myself have heard countless times the expression “branch of the future”, and our main customer banks are themselves struggling to put together different customer needs. What I can certainly say first hand is that my daughter and my son (21 and 18) have no idea of what a Bank actually is or, better, they know that they can install an APP which is what their account is all about, and where dad can magically make some money appear.

Interestingly enough, many studies around (Deloitte and others) do agree that there is no black and white choice between keeping or leaving branches, but that European Banks with more than 1000 branches could see a 50% cost reduction per branch by leveraging technology. For sure, allowing customers to have hybrid access will be a winner, customers want to start an experience with their mobile, continue it with their PC or in branch, and they pretend to have horizontal coherence between those steps, where all their moves get properly traced and documented. On the other side, many studies agree too that the need for customers to have a personal experience with the Bank operator is still strong and not going to disappear anytime soon; customers learned that money deposit or withdrawal can be automated and the related risk low, but they certainly hate to deal complex or urgent matters (or that they perceive as such) with unfriendly answering machines. So, when his old uncle will bequeath him a billion dollars, the customer will pretend to enter a physical branch and see a face, sign a physical paper, receive a physical receipt issued by a smiling physical operator. It’s all a matter of trust. 

Whichever underground branch revolution was in action at the beginning of 2020, the pandemic has forced all of us to answer an urgent question: how can I deal with my money and my finances if I simply can’t leave home? Many of us are probably surprised by the amount of things we sorted out having dropped travels and personal relationship to zero. I am sceptical about the “new normal” mantra I've heard so many times - humans are social animals and nothing can replace an handshake in building trust and speeding up relationships and processes. That said, Banks will see their customers expectation to move in fast forward, and they must react at the same speed. We can easily predict that technology will progressively remove an increasing number of operations from branches, but customers must fully trust innovation to let it take off. On the other side, Banks must definitely maintain physical access, have a strong and recognizable brand, and never forget that the day when all Banks will be reduced to machine interactions, all Banks will be the same.

Pierpaolo Bubbio
R&D Director, Panini