SunTec CEO: Bank branches need to become Apple stores

The bank branch of the future must become an experience centre like Apple stores, according to SunTec CEO Nanda Kumar.

In August, EY released the results of the EY Future Consumer Index which showed that the pandemic had forced 43 percent of consumers to change the way they bank. The index also warned that customers are not certain to prefer digital banking channels once the pandemic is over, with only 16 percent saying the crisis has changed the way they bank long-term.

Kumar believes that as the pandemic forces consumer behaviour to change, it is time for retail banks to adapt to the consumer too by looking to the tech giants for inspiration.

“Apple stores are to a certain extent, experience centres. It’s not there to sell the product, but for people to experience the product and educate them on the product and service and how they can make use of it,” says Kumar.

“Banks have to get into facilitating the business side of the customer or the lives of the customer. For example, by helping individuals to manage their finances… helping the customer to manage their aspirations like buying a home, going on vacation, or their kid’s education. Helping them to save and incentivising long term commitment. It is no more a case of just keeping your money as the traditional, utility service,” he adds.

Banks offering extra services in-branch to attract customers is nothing new, even if it isn’t the norm. In 2001, ING Direct opened its first US café in New York for customers to “experience banking that is as easy as having a cup of coffee”. While in 2002, documentary filmmaker Michael Moore began his film, Bowling for Columbine, by visiting a bank which was offering a free gun to anyone who opened a current account.

Kumar urges banks to refrain from selling guns, but says the point still stands. Bank branches have an opportunity to innovate and become places where customers go for advice, support and to be welcomed. But currently, most branches are not designed for that.

“If you look at a normal high street bank, they’re [the bank staff] are not there to service the customers, they’re just doing their work,” says Kumar.

On top of this, Kumar says that most of the functions these employees are fulfilling will soon be fully automated and there will be little need for them. That opens up a lot of space in the bank branch too, space that Kumar says must be for the “customer only”.

Much has been made of the rise of digital-only banks like Monzo and Revolut, with a study by Finder reporting that around 12 million British adults have opened a digital-only bank account already. The fear for traditional high street banks is that they could soon become obsolete. To prevent that doomsday scenario, Kumar says banks must look to the customer’s experience.

“A bank has to be a welcoming place. If the traditional banks don’t shift to that, I think it’s only a matter of time before the new generation of banks and fintechs occupy that space and these guys will become just a utility service.”

He adds that with bank branches often taking up “prime locations” in towns and cities, their branches can be one way to stay ahead of the digital-only competition. Digital banks don’t have branches because it’s expensive and online functions through mobile apps can provide all the services that a customer needs, Kumar says. But this is where traditional banks can capitalise.

“If the traditional banks improve their experience, that [physical location] definitely has got more value and more trust with the customer. But there has to be meaningful conversations where you can bring in experts etc,” Kumar adds.


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