Over the past few years a number of leading retail banks have launched initiatives to improve branch performance, aware that branches remain the predominant relationship and distribution channel. The focus has been on increasing branch profitability by driving product sales more aggressively and reducing costs by continued centralization of routine activities.
Although these changes have made an incremental improvement to branch performance, there are a number of challenges that limit the ability to deliver significant, sustainable improvements in profitability. These include:
- difficulty engaging customers that are using the branch network purely on a transactional basis
- low levels of customer confidence that branch staff have their best interests at heart and are not simply ‘pushing’ products
- lack of staff motivation to meet targets created and imposed by head office.
To drive branch profit contribution, branch managers need to be made directly responsible for profitability and be given the control and flexibility to influence it. Implementing a radical change of this nature can yield a step increase in performance. Achieving such performance improvement is possible by challenging traditional retail banking paradigms in order to:
- transform the role of the branch manager
- create a focus on the local market
- return specific customer interactions to branch control.
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Banking Automation Bulletin Web site: www.rbrlondon.com/bulletin
