Browse Sections

• Education
• Business 
• Blog
• Special reports

The changing face of retail banking

Sheryl Moore
28/ 8/2008

IT wasn't too long ago when the closure of local bank branches prompted outrage, as did the decreasing hours banks were actually open to the public.

Saturday morning opening became a fading memory - of an age when customer service mattered.

The big banks were merrily setting up call centres, ignoring frustrated customers who often found themselves on hold or batted around by `telephone banking' staff.

While this may have all been very well when nobody had heard of the credit crunch, it seems they have now had a huge change of heart.

High street banks are ploughing millions of pounds into refurbishing branches, with play areas for kids, late-night and even Sunday openings.

Some are opening mini-branches to cater for time-poor customers.

While the cynical might see it as an attempt by cash-strapped banks to rake in much-needed deposits, others believe it is a sensible reaction to an increasingly competitive market.

Earlier this week the Co- operative announced it is investing £2.5m in trials of mini-banks in its food stores. The Manchester bank, which is hoping to roll out the initiative nationwide, said it needs a bigger physical footprint for its banking business.

Last week, NatWest revealed that 20 of its branches in Greater Manchester will be opening their doors on Saturday mornings for the first time, in a move which, said Sharon Waine, manager at the Piccadilly branch, "shows our customers that we really understand and respond to their banking needs."

It was a similar story at Barclays when it opened a revamped branch on Market Street earlier this year, complete with modern décor and play area for children. It is open to 7pm most days and between 11am and 4pm on Sundays.

It is all a major U-turn by the big boys who are keen to lure back customers. Peter Birch is a director of financial services at Deloitte in Manchester, which recently published a report - Winning With Branches - which highlights how branches are vital to the future success of retail banks.

He says that financial institutions have viewed branch networks as a significant cost, with the balance shifted towards extracting savings rather than revenue generation.

He says: "A lack of investment has left an unhelpful legacy of poorly located and maintained branches. Retail is all about detail, and a walk down any high street quickly reveals that the banks are being outgunned by retailers when it comes to giving customers an appealing experience."

Peter says: "By changing the basis of competition and leading on service rather than price, banks can transform branches from a perceived burden into a very real benefit."

"It's a win-win scenario - reward your customers with a superior service, and they are more likely to reward you with greater loyalty which, in turn, leads to more sales of products to the customer and greater branch profitability."

John Pal, lecturer at Manchester Metropolitan University, says the banks have got to differentiate themselves through personal service.

He says: "It is a big reversal of strategy from the banks, but the market has changed considerably over the last few years. Who can get to a bank between the hours of 9am and 4pm? I certainly can't.

"The banks have had to react to customer demand."

Most recent 1 of 1 user comments