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Enabling Branch
Innovation: The
Powerful Role of
Self-Service
Technology
1
Liam van Beek
Sr. Manager, Physical
Channel Strategy, BMO
Agenda
A changing landscape
• Understanding shifts in customer behaviour and their impact on the banking
industry
The response – Branch transformation
• Case study – BMO Harris Smart Branch
− The Smart Branch concept
− Executing with the customer in mind
The role of the ATM in the future
• The challenge – addressing key customer experience drivers:
− Simplicity
− Convenience
− Meeting needs
• Levers: Capability & Innovation
• Industry Opportunities
2
The world is changing and it’s having a significant impact across
industries, including in banking
Bridging the gap:
How are we creating a better omni-channel experience and more effectively integrating digital technologies?
Changing Customer Behaviour:
How are we responding to shifts in banking behaviour?
Disruptors:
How are we responding to the
impact of non-financial retailers and digital
disruptors?
The future of cash:
How are we adapting to the rise of P2P
payments, contactless payments, virtual
currency and mobile wallets?
3
A big part of the shift we’re seeing is centred on changing customer
behaviour
4
Accessibility &
Innovation
Personal Assistance &
Convention
Digital Natives Individuals who are most
comfortable interacting digitally.
Traditionalists Individuals who have not adapted
to the use of digital technologies.
Digital Immigrants Individuals who have adapted to
varying degrees to the use of
digital technologies.
• Value convenience over direct
personal assistance
• Seeking innovative and engaging
options
• High usage of digital channels
• Comfortable with virtual relationships
and communication
• Digital adoption is not universal
• Fuller adoption can be facilitated by
increased exposure to digital options
• Selectively engage across channels
with continued value placed on
physical channels.
• Little to no digital adoption
• Derive value from direct personal
assistance and face to face
relationships
• High usage of the physical channel
As customers evolve how they choose to bank, their expectations are
also becoming more dynamic
• Customers are looking for a more
seamless and consistent
experience across channels.
• There is growing expectation that
the customer experience will be
personalized.
• Customer journeys do not always
start and end in the same
channel.
• Satisfaction across incremental
touchpoints does not reveal
overall satisfaction with the
cumulative experience.
5
Call Centre
Online
Branch
ATM
Mobile
Data/CRM
Customer
The impact of this is reflected in evolving channel preferences which see
increasing reliance on digital channels to complete banking transactions
6
United States
Online Banking
• 31% cite online banking as their primary
method and 74% report using online banking
within the last year.
Mobile Banking
• 35% reported using mobile banking in the last
year. The most common use was to check
account balances or recent transactions.
Physical Channels Banking
• 21% of respondents in one survey considered
the branch as their primary method for banking.
In another report 87% stated that they had
visited a branch in the last year.
• 14% cite the ATM as their primary method for
banking.
Canada
Online Banking
• 55% cite online banking as their primary
method and 77% report using online banking
within the last year. Payments are a key online
activity.
Mobile Banking
• 31% reported using mobile banking in the last
year. Usage of mobile banking is increasing.
Physical Channels Banking
• 13% of those surveyed considered the branch
as their primary method for banking with 40%
reporting a reduction in their use of in-branch
banking.
• 18% cite the ATM as their primary method for
banking. 85% of those surveyed use ATMs
when making cash withdrawals.
Sources: CBA – How Canadians Bank (2015), Federal Reserve - Consumers and
Mobile Financial Services (2015), ABA – Survey: More Consumers Embracing Mobile
Banking (2014)
Despite these changes the branch continues to be the focal point for
advice based sales
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Balance Inquiry
Bill Payment / Transfers
Administration
Report a problem / obtain status
Buy / sell investments
Make deposit
Advice
Sales
Branch
Call Centre
ATM
Online/Internet
Mobile
Another Way
“While customers have embraced multichannel access, they also
expect higher value from face-to-face interactions at their bank
branch”
Sources: McKinsey – The Future of US retail-banking distribution (2014), Ernst and
Young Global Consumer Banking Survey © July 2015 Digital Banking Report
Given the context, we can expect a material shift in how FIs leverage
their channels going forward
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Changing Customer
Behaviour
1. In-branch banking, though on the
decline, continues to be valued
in principal, if not practice, by
many customers.
2. Customers no longer bank in
channel isolation, they complete
tasks across physical and digital
locations.
3. Customers prefer to deal with a
person for complex and advice
driven transactions and opt for
digital or self-serve when
completing basic transactions.
Branch
Digital
Self-Serve
Call Centre
The branch will remain critical to
driving customer acquisition and
advice based sales but its role in
fulfilling basic sales/service
transactions will begin to diminish.
The call centre will shift to a supporting
role for other channels and will become
a core location for issue resolution.
The role of self-service channels in
fulfilling basic sales/service
transactions will increase as
technology advances and we develop a
wider suite of allowable
transactions/services.
Digital channels (with an emphasis on
mobile/tablet) will grow in importance
for driving customer acquisition/share
of wallet and fulfilling basic
sales/service transactions.
While many FI’s are investing to enhance their digital capabilities, we are
also seeing a dramatic transformation in the branch landscape
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Transaction Focused
Relationship and Advice Focused
Ass
iste
d S
erv
ice
Self-S
erv
ice
In the current state
ATMs are
transaction
focused.
Established
Emerging
Aspirational
In 2015 BMO Harris introduced The Smart Branch Concept as a way to
engage customers with innovative ways to bank
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Smart Branch is a small footprint, technology enable format with a focus on
consultative sales.
With customer experience in mind, we equipped the branch with key
convenience features, including:
• Integrated sales and service space with universal bankers capable of
meeting both simple and complex needs sales and service needs.
• Innovative self-serve technologies including enhanced ATM (e.g.
customer selected bill mix, mobile cash) and Live Teller capabilities
(ITM) to manage basic transactions.
• Digital displays to engage and delight customers.
• Instant Card Issuance to provide fast and easy access to accounts at
the ATM and POS.
• Video Expert capability to connect our customers with specialized
sales teams without the need to book an appointment.
• Employee facing technologies to encourage banker mobility and create
a fluid customer choreography in the branch.
11
There were several factors driving the successful execution of the Smart
Branches in Chicago
12
Customer Engagement
Change Management
Capability
Creating comfort with the format
and technology and evolving to
meet customer needs.
Preparing customers and
employees for the change.
Creating the right
capabilities to enable
customers to choose
where and how to bank.
So what does all of this mean for the ATM Industry?
Customers expect…..
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Simplicity
Using an ATM needs to be quick and easy: • Intuitive user experience and interface
• Minimize the number of steps it takes to complete a
transaction
Convenience
Create flexibility in how customers can interact: • Innovative authentication options
• Provide better access through partnerships
• Integrating with other channels
Their needs to be
met
We need to meet increasingly complex customer
needs: • Expanding ATM capabilities
• Creating a personalized experience
• Moving beyond service to sales
Can we move the needle and leverage the ATM to build better
relationships with our customers?
14
Transaction Focused
Relationship and Advice Focused
Ass
iste
d S
erv
ice
Self-S
erv
ice
Established
Emerging
Aspirational Can we innovate
and increase ATM
capability to build
better
relationships?
There are several levers that we can pull within the ATM industry to help
build customer relationships
15
Network and Operations Capability Innovation
What can’t customers do
at an ATM?
How will we challenge
ourselves to think
differently about the
function an ATM can
serve?
How am can I run my
network more efficiently
and most effectively
manage customer
information?
ATM enhancements that
exist, but are not widely
deployed
ATM enhancements that
are aspirational
Expanding capabilities and driving innovation will be key in the evolution
of the ATM Industry
16
ATM enhancements that exist, but
are not widely deployed
ATM enhancements that are
aspirational
• Personalization
• Dynamic Currency Conversion
• Foreign currency
• Customer selected bill mix
• Mobile ATMs
• Better integration of branch
format and ATM access
• Referrals and customer
opportunities
• Biometrics
• Omnichannel interface and
preferences
• 360 view of customer portfolio
• Viable commercial and small
business solutions / coin option
• Sales capability
• Problem tracking & resolution
What are the opportunities for the industry?
1. How can we increase capability without making things more complex
for our customers?
2. How can we rethink the value proposition for the ATM and make the
shift to relationship building?
3. How can we break down barriers for those customers who don’t
traditionally think of the ATM for more complex servicing and sales
needs?
17
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