RETAIL BANKING | Roxanne Uy, Singapore

Digital channels still can't beat bank branches as profit centers

Find out what DBS, RCBC, and CIMB have to say on how the role of the branch has evolved as customers migrate to electronic banking.

ABF: In today’s highly digitized banking environment, what is the role of the branch? With the concept of mobility (in terms of payments and connecting with customers) rising in Asia, is the branch still considered a profit center?

DBS Bank: Jeremy Soo, Managing Director and Head, Consumer Banking Group (Singapore)
Branches will continue to be an important customer touchpoint. The role of branches have changed to one which provides more value added service such as loans and investment related services as customers migrate to self-service banking and online banking for basic transactions such as cash withdrawal/deposit and funds transfer.

RCBC: Ismael Sandig, Senior Executive Vice President - Retail Banking Group
At the end of the day, customers will still want to go to the branch. Low value transactions can be migrated to electronic channels. The branch role really is to accommodate queries and to build the relationship. For RCBC, it is considered a profit center.

CIMB Bank: Renzo Viegas, Group Deputy Chief Executive Officer and Head of Consumer Banking
The advent of internet banking and other digital channels have not marginalised the branch as an important channel and profit centre especially for an effective face-to-face interaction with customers. In Malaysia where services are becoming the main differentiator in an extremely competitive market, the traditional brick and mortar structures of the branches are the “welcoming faces“ which represent CIMB’s values. The ability to create this exceptional first impression has been one of the contributing factors for CIMB’s excellent turnaround since its rebranding exercise which started in 2006.

Over the last few years, CIMB has also invested substantially in other channels – internet banking, mobile, contact centres and self service terminals – in tandem with the growth of internet and phone penetration in the country.

With household broadband penetration reaching 62.9% as at the first quarter of 2012 from an estimated 6.7 million households in the country, we believe internet banking will become the channel of the future. Mobile banking will also feature dominantly especially with the country’s cellular phone subscriptions having breached 35.7 million at the end of 2011 or over 124% penetration rate.

Going forward, we see all channels complementing each other and creating its own niche, with branches as the shops that provide the advisory services and internet and mobile banking as the transaction platforms.

The challenge for banks is to provide the same exceptional customer experience across all these channels.

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