Magazine article Marketing

News Analysis: Called to Account

Magazine article Marketing

News Analysis: Called to Account

Article excerpt

Supermarkets and the web have changed banking habits. Can the branch networks keep up, asks Samuel Solley.

There are few things more irritating than facing a long queue in a bank when you have only an hour for lunch. At best plain boring, at worst frustrating, the experience of visiting the big banks' high-street branches has hardly changed in years.

Now HSBC, the UK's biggest bank, wants to shake things up. It plans to radically overhaul its 1600 high-street branches by developing an interior concept that will change the face of UK banking (Marketing, 3 August).

Although HSBC and design consultancy Fitch refuse to discuss plans for its branch network, it is widely acknowledged that the traditional high-street banks can no longer rely on apathy to maintain their customer numbers, particularly when there are so many alternative ways for people to deal with their finances.

'Banks haven't altered much since 1983, when the Midland was the first to become a retail bank. Before that it was simple long counters and bandit screens,' says Andy Myring, head of brand experience at The Brewery, who worked with Midland (now HSBC) at Fitch during the early-80s.

He is sceptical about how far HSBC will take its branch redesign, and says the banks' unwillingness to change dramatically is a hereditary problem.

'Banks now need to think radically differently, not just about their interiors and branding, but beyond into their basic offering,' says Myring. 'They need to take different approaches and metamorphose. Go into banks at lunchtime and the queues are horrendous. So why not take a look at opening hours, targeting different consumers with extended opening hours. Nine to five doesn't suit everyone.'

Changing needs

Before appointing Fitch, HSBC had already started experimenting. In a handful of its branches, it has instigated a complete refit, including the installation of online terminals so that customers can bank online while in the secure environment of the bank.

Although cashiers still serve customers from behind screens, for obvious security reasons, in these branches there has also been a marked increase in the number of customer service personnel, indicating that the majority of customers do not come into branches for cash transactions, but to speak to someone face to face.

HSBC's refit is not the first time dramatic changes have been heralded in the sector. In 1999 Abbey (then Abbey National) announced plans to put Costa Coffee bars in its branches to create a more relaxed environment for customers who were making financial decisions. The target was to open 50 coffee bars, but four years later Abbey's slide into losses spelled the end of investment in the concessions. The coffee bars were not sufficiently profitable for Costa, and plans to add to the existing 15 were put on hold.

The continued growth of online banking brands such as Egg and First Direct, and the launch of financial offerings from retailers, in particular supermarkets such as Tesco and Sainsbury's, suggests that future demand for a high-street presence could be at risk. The traditional banks' combined branch network has declined by a fifth in the past decade, according to Mintel.

With only 254 branches, the Alliance & Leicester is one bank trying to punch above its weight through online banking. …

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