Delivering efficiencies in banking retail programmes

The banking industry has changed more in the last ten years than the previous 100; with new online entrants to the sector alongside global tech companies, such as Google, Amazon and Apple, challenging the historical players.

But these new entrants do not have the years of customer trust which has been built from establishing a solid physical branch network. A network that has supported major life decisions such as opening your first bank account, applying for a student loan, receiving your first credit card or successfully agreeing your first home loan.

The daily interactions of paying in money may have declined, but these large and important moments still tend to play out in the comfort and security of your local high street branch.

However, this does not mean the banks’ property teams can sit still. There is a constant challenge to ensure that capital is spent wisely on the network; to identify and secure the best locations to design and build a flexible design and recruit a team with the right skills to drive the best value from the market. We asked leaders from the property teams of Australia and New Zealand Banking Group (ANZ), Bank of Queensland (BoQ), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Suncorp and Westpac for their insights on those challenges and what they are doing to make sure their customers and staff have the best possible in-branch experience.  This is what this group told us.

Near and medium challenges for banks

The branch networks for the big four banks (CBA, Westpac, ANZ and NAB) vary between 500 to 800 locations. This is a significant portfolio of mostly leased properties that need to be maintained under constant negotiation alongside potential co-locations of existing sites. This network needs to be managed within the context of a solid retail strategy that drives decision-making on investments.

The group highlighted that unsurprisingly cost reduction and value-for-money remains top of the list; how do we deliver a full refurbishment programme with tight funding? But ensuring that we have flexibility in branches in terms of size and design to meet the evolving customer model is equally important. It was recognised that there is a need to align all customer channels so that an interaction initiated online can be finalised easily in branch. 

The requirement for a modular approach to design, so that the operational processes can be adapted, is also paramount in branch planning and site selection according to the group. 

The challenges in delivering an efficient programme of new or refurbished branches to support the retail strategy of the bank are significant and linked to value, flexibility and certainty of delivery in a changing retail environment.

Addressing the challenges

These large organisations are addressing these challenges by building foundations for success, driving continuous improvement, innovating delivery and efficient programmes.

Building the foundations for success

The group agreed that having absolute role clarity and clear end-to-end delivery processes is a key foundation for success. To deliver efficiencies, the internal property team must understand who is involved and when to drive decisions and approvals. In large scale programmes, ambiguity in accountabilities is a major problem that needs to be addressed.

This focus on stakeholder engagement has increased in recent years and, as the number of projects has increased, engagement needs to be targeted at programme level. It was noted that bringing the internal stakeholders on the planning, design and construction journey is incredibly important in reducing late variations and managing any stakeholder issues. 

Everyone needs to understand the goals and objectives of the entire programme and where challenges and opportunities can impact all roles and teams. It is important to set up unified goals with business case objectives at project level that everyone is responsible for.”

However, it was recognised that efficient processes and responsibilities increasingly need to be underpinned by an experienced property team. A team of people with the knowledge to spot issues early, drive quality, engage the supply chain, understand the construction industry and have the passion for delivering great outcomes. This can mean recruiting from a different pool than previously and encouraging property professionals to move from a consultant role into a full-time client-side position.

It was highlighted that recruiting and retaining those people requires an exciting and innovative programme of work to keep them motivated and engaged. According to the group, the ability to collaborate and innovate together is a skill that is needed at the heart of any retail capital programme. Collaboration must be recognised and celebrated at every opportunity.

Improving in-branch customer experience

It was unanimous across the group that the physical branch is still incredibly important to each bank and its customers.

Transactions are becoming more digitally enabled and this is changing the services required in the retail branch. However, there is still a need for bricks and mortar branches, not to move money but to have human interactions. Branches are a fundamental presence in the community.”

The group emphasised the need for the property team to understand that the ultimate goal is to serve customers by delivering the best product and to constantly evolve and find ways to improve that branch experience.

There is a need for more visibility of the business outcomes achieved by a successful branch refurbishment to connect the capital investment on property back to an increase in bank revenue or uplift in customer experience scores. It was felt that more visibility here could drive further innovation and value in the branch design and construction process.

This validation of the work undertaken by the property team is both rewarding to the project resources but can drive the continuous improvement culture. Each group is looking at the KPIs to be monitored and targeted for improvement.

With more visibility on outcomes, property teams should use these insights to implement innovation.

Innovation in delivery

The group highlighted the potential benefits of a digital strategy aligned to programme delivery that underpins the programme with the right systems and tools (whether used internally or externally). 

It was recognised as vitally important, when managing a complex programme of work, that could consist of major projects, minor works and facilities management initiatives, to be able to efficiently produce reports that supports effective governance and decision-making. 

Having the fundamentals in place is a priority to manage projects in an efficient way. However, internal technology change is tough and slow.”

Every organisation is driving the development of a single source of truth that’s accessible by every part of the business to ensure all stakeholders are on the same page. This platform should report on current project performance but be used to drive decisions on future investments, identify trends and help improve programme performance. 

Lastly, it was agreed that engaging with the market and suppliers is imperative for driving innovation. The use of benchmarking to understand where improvements could be made and to bring ‘the outside in’ keeps property teams fresh and stops them from becoming too insular. 

The future of banking retail programmes

Insights from Australia’s most influential banks tell us that despite the rise of digital technology, in-branch customer experience is still one of the primary objectives for every bank and they each continue to invest annually in in-branch stores.

Property teams can be a facilitator of great customer value by working closely with retail colleagues to plan, design and build a flexible network of branches that encourage human interactions with the customer.

The biggest challenge for property teams now is to be able to adapt as the retail model evolves. To achieve this, teams need to clearly define roles and responsibilities, build high-performing teams with construction industry experience and use data and insights to understand and respond to customer experience. If property teams can deliver efficient retail programmes with these elements, then they will continue to drive customer improvements which align with the overarching bank strategy.