IDC Financial Insights Asserts That As Banks Undergo Digital Transformation, So Too Must the Retail Bank Branch
22 Feb 2016
New report provides blueprint for branch transformation project
FRAMINGHAM, Mass., February 16, 2016 – While transformative technology within bank branches is nothing new, it has evolved to the point where banks can no longer sit idly by and ignore their presence. Advances in analytics, high-definition video, and virtual and augmented reality are combining to assist branch employees in more complex transactions and to cross-sell/upsell in a more personalized manner. Customers' expectations about what they need from a branch are shifting rapidly. How institutions approach this transformation will make or break them throughout the next decade. In a new PlanScape report from IDC Financial Insights, How to Make the Retail Bank Branch the Face of the Digital Transformation (Doc #US40147616), offers a blueprint for a branch transformation project to assist financial institutions on this journey.
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IDC Financial Insights estimates that by 2019 total IT spending by financial institutions worldwide will exceed $310 billion. IT services will make up one-third of that spending and much of these services will be spent on transforming the institution into digital platforms. In fact, specific to the branch channel, almost $20 billion will be spent worldwide. With such a large investment to be committed to remaking the branch network, banks must judiciously plan to make investments and understand each phase of the transformation as it pertains to any individual banks' business priorities.
According to IDC Financial Insights, the most important concept to consider when discussing digital transformation at the branch level is recognizing the need to correspond with the customers' (and employees') digital lifestyle. This could mean opt-in tracking of consumers' handheld devices as a way of offering a differentiated concierge service when they walk into the branch, or possibly enabling financial advisors to visit wealth management customers at their homes, carrying the near-full capability of the branch with them.
"The challenges faced by banks when it comes to transforming their bank branches from a transaction center into a sales center have been a continuous obstacle for many years," said Marc DeCastro, Research Director, Consumer Banking Engagement Strategies at IDC Financial Insights. "But the time has arrived when the technology required to truly transform the branch has reached a point where the benefits can no longer be ignored. The end result of transforming the branch will be when the right mix of technology and personnel allows the bank to immediately engage with the customer, as opposed to the customer engaging with the bank, and both the customer and the institution can mutually reap the benefits."
IDC Financial Insights believes that there are five key milestones that must be followed to help facilitate the process in order to achieve optimal results:
- Audit the existing branch network.
- Benchmark and measure key performance indicators for the branch network.
- Assess the various technology solutions that adhere to the strategic direction of the organization, as well as, IT and business units.
- Once a new solution has been identified, and due diligence completed, then the implementation of the new system, inclusive of any workflow modifications, will need to be carefully deployed.
- When the system has had a chance to work out any bugs and be implemented on a larger scale, there is likely to be opportunities for refining and making modifications.
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About IDC PlanScape
IDC PlanScape reports help to assure business value is recognized from technology by developing a technology initiative that is aligned with business goals, scoped to succeed, and properly resourced. By helping technology leaders make the case for a technology initiative, recognize unique resource requirements, and identify risk factors, IDC PlanScapes mitigate the greatest risks associated with technology initiatives.
About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world's leading technology, media, research, and events company. For more information, please visit www.idc-fi.com, email email@example.com, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-insights-community.com/financial.
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