Optimising the utility of "brick and mortar" in the digital age
Manoj Kumar
Social Alpha is on a mission to drive economic growth, social justice and climate action through the power of entrepreneurship and market-creating innovations.
While digital banking is taking over the mindshare of urban consumers, i still see banks opening new branches every day. My banker friends tell me that the branch is not yet dead, and in some cases its actually strengthening. I am a primarily digital consumer but can appreciate why they still need branches. Then i see a number of travel agents - who are still surviving despite the online threats from the likes of Cleartrip, Expedia etc. Same with the courier and taxi services folks...the brick and mortar seems to be surviving across the businesses despite the digital threats. The question is - how long can it survive, if the real estate and manpower costs don't show any signs of large corrections. I think that the time has come to optimise the return from these investments in prime locations. Banks may want to partner with these services.....so when you step into a branch, you can access the travel, insurance, courier, telecom.......whatever services you can offer to consumer.....I live in Bangalore and the government here runs something called Bangalore One (https://www.bangaloreone.gov.in/public/default.aspx) , the one stop shop (ok, nearly one stop shop) for various G2C/B2C services. Can banks learn from BangaloreOne and create nicer "brick and mortar" super bazar type structures where consumers can procure most of the services they need? They would probably pay for the cup of coffee as well, if you have a kiosk in the lounge. May be the economy of scale, reusability, opportunity for cross selling and cost sharing and finally the convenience of "nearly one stop shop" can extend the viability of brick and mortar little further. Worth a try?
Chief Executive Officer at Orient Bell Ltd
9 年This is an interesting flip to the traditional brick & mortar model , however the banks might have already achieved this ! They open branches primarily to acquire new customers both on the asset and liability side - servicing existing customers is only a side show. Check out the branch managers target KPI , service KPI will be few and of lower weightage.
Entrepreneurial executive - M&A Dealmaker - Family Office, Private Equity & Venture Capital
9 年Merging reality with virtual reality is key, where bricks & morter can capitalize on shopping emotions with iBeacon, NFC, IoT, Digital Signage etc.
Sales Head, South East Asia
9 年The discretion based, high quality transactions will always be face to face (in branch or via web interviews) because deviation from norm is required in some cases and sometimes customer is looking for a face-to-face interaction for trust building. Brick and mortar channel will continue to exist because of the reach and trust factor as of now. Also there are no incentives / punitive measures in place for customers to use a certain channel. e.g. cheaper online loan (lower int / lower processing fees), additional charges for in branch transactions etc. etc.
Head of Solutions & Sales, Asia, Julius Baer
9 年Good thought. However I feel that it will still fail. The reason that branches continue to grow in certain cases is because (a) a large part of the world is still not an online transactor but an online viewer which is just a matter of time before it changes completely. Also specially true about banking vs other e-comm sites because wealth is still controlled by older people (b) people at senior positions in consumer banks are people whose success has depended on branch banking. They will keep wanting to not let this go else all top positions will go to the young digital marketeers. Both these will take a decade to change but I feel it will definitely change
Managing Director, DesignSense Software Technologies
9 年I am not an expert in this domain but I think banks open new branches in geographies where they need to build their brand. Once the brand is strong and customer interaction is largely online, they scale down the branch or reduce to an automated e-branch etc., like what SBI is doing. They need to be agile in up-scaling as well as down-scaling. I guess it is true with all businesses. We all have online presence but we do not completely eliminate the face-to-face interaction.