New branch models in the Italian banking industry

Branch models in Italian banking

By Paolo Capaccioni, Partner and Giuliano Cicioni, Partner, KPMG in Italy

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Modern glass stairs

UniCredit Group Case History - Exciting projects are re-shaping the Italian bank branches’ network of UniCredit Group.

‘RUN’ (Rethinking UniCredit Network) and ‘Open’ are the evocative names of the two main projects that are re-shaping the Italian1 branches’ network of UniCredit Group in terms of layout, structure rationalization and distribution model in the retail segment. 

The RUN project was launched between 2013 and 2014. It is not merely a physical restructuring and reduction of branches in the Italian network from the current 4,000 to a target of 3,300 by the end of 2015, it also implies restyling the visual identity of a large portion of branches in order to make customer experience more efficient, effective and engaging. It is quite an ambitious project with investments both in real-estate and technology, partially self-financed by savings from outlet closures. Project Open, instead, aims to change the service model, in particular redefining roles and activities.

Flagship bank branches

The flagship store of UniCredit Group in Piazza Gae Aulenti (Milan) has become the branch ‘standard’ in the Group. This branch opened more than a year ago on the ground floor of Unicredit Tower, the newest and most futuristic headquarters of the Group, and is an icon of the modernization project of the ‘Porta Nuova’ area.

At UniCredit, the change of pace in the new layout of the branches and services supply is the result of research, analysis of client operations in the outlets and continuous experimentation. The evolution of the branches is clear from the outside - transparent windows, double sliding doors instead of the classic revolving door, etc. The interiors are large open spaces where, instead of the traditional counter, there is a living room and a number of technological innovations such as self-areas, Automated Teller Machines (ATM) with touch screen interface, digital communication, ATMs for operations and video-rooms, which allow the client to talk to an advisor remotely, even when the branch is closed.

A new distribution model

At an organizational level, this has also led to big changes such as the introduction of new skills and an intensive plan of training and change management. The Customer Manager, for example, is a real guide to the services of the agency, a person who advises clients and welcomes visitors at a station with software developed specifically for queue management and appointments with advisors to find immediate solutions to basic needs (such as updating the master data). The disappearance of traditional counters, the open space and the multifunctional work environment have also led to the transformation of the teller into an advisor: they both use the same station as the front-desk is out of date. Each desk in the open space is equipped with a tablet to collect and accept graphometric signatures, while the advisors, when making cash transactions, have the latest generation of ATM. The waiting areas are designed to ensure maximum comfort and functionality thanks to the technology, equipment and complete furniture restyling. Clients can experience the functionality of internet banking at multimedia stations. The idea is to liven the waiting area not as ‘a waste of time’, but as a place of interest and cross-pollination between banking and non-banking products, which helps to foster and strengthen the process of customer loyalty.

With this in mind, two new initiatives have been launched: ‘Subito Banca’ and ‘Subito Casa’. The first gives clients the opportunity to purchase selected products and services from prestigious partners; the second is a real estate brokerage that also offers accessory services for buying and selling homes, shops, offices and luxury properties. This also represents a way to disintermediate consumer credit players and attract prospective clients in a sort of acquisition campaign.

Innovation in the banking sector

In summary, the disruptive and rapid innovation, the evolution of technological and cultural factors and the polarization of society are profoundly changing the banking sector. The needs and consumption habits of clients are significantly changing: they tend to go to outlets less as they perform the ordinary and simple operations through direct channels - especially the generation of digital natives - but they want more added-value services such as advisory. The recourse to branches is evolving from the high frequency use and low variance needs model, to a low frequency use and high variance needs model. This transformation is related to the change of the concept of proximity and relies on a new role and function of the branch. The branch network is changing looks: following the hub & spoke model, the current trend is to minimize the ‘light’ branches even in such countries like Italy, where direct contact is still quite common for specific client segments and age ranges. The branch is still essential in client relationships, especially during products advisory and sales as well as more customized services, and it is an important source of revenue related to some client segments. All this implies full and effective integration with other channels in order to ensure customer focus and improve the customer experience.

Perspectives

Perspectives offers unique insight and opinion on emerging customer trends and channel developments in the banking sector.

 
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