Slow Going: How US Financial Institutions Are Tackling Branch Transformation

by Bob Meara, November 12, 2014
North America

Abstract

Digital channels need to be a high priority, but too many financial institutions lack urgency in tackling branch transformation, placing top line revenue and efficiency ratios at risk.

Consumer preferences are on the move, and their seismic changes are forcing most banks to play catch-up. In the report Slow Going: How US Financial Institutions Are Tackling Branch Transformation, Celent offers analysis of changing bank and credit union priorities and their specific, albeit protracted, plans for branch transformation.

In three consecutive biennial surveys of North American financial institutions, the number one retail banking priority has been improving top line sales results. When asked to rate the importance of various technology initiatives in terms of their ability to deliver top strategic priorities, branch channel transformation ranked a distant fourth behind digital banking channel development, despite the mobile channel’s comparatively low consumer usage and lack of mobile channel selling and originating at most financial institutions.

“Digital engagement is where things are headed, but in-person selling is where things are,” says Bob Meara, a senior analyst with Celent’s Banking practice and author of the report. “A bank’s slowness to redesign branch operating models is placing both top line sales and efficiency ratios at risk.”

The report begins with the need for financial institutions to evolve their retail banking business models, and then examines changing priorities uncovered from Celent’s three biennial surveys. It then foretells branch technology investments based on adoption. The report closes with a call for banks to take decisive, measured action now, even though they may lack a clear vision of the future branch.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Why Here Why Now?

1

Shifting Sands: Changing Priorities

3

Taking Shape: Elements of the New Branch

5

Recommendations: Transforming the Branch in an Omnichannel World

9

Appendix: Survey Methodology

10

Leveraging Celent’s Expertise

11

 

Support for Financial Institutions

11

 

Support for Vendors

11

Related Celent Research

12

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