In a recent banking seminar Backbase held in Amsterdam, together with partners ConQuaestor and Virtual Affairs, we touched on some key aspects of the Engagement Banking ‘movement’ as it begins to manifest itself at financials in the Netherlands.
A main takeaway from the seminar was a better understanding of the level of commitment banks have to actually implement a digital strategy as well as some of the obstacles they face in fully achieving one. Rabobank, a Dutch bank with distant roots in the agricultural industry in the Netherlands, presented a look at how it is dealing with the phase-out of its legacy branches. There’s been much discussion in Fintech about how a ‘branch mentality’ has continued to suck the life out of some engagement banking initiatives. However, for most banks, the question of ‘how and when’ to get rid of branches is fairly difficult to answer. Unlike startups, which don’t have older, luddite customers to serve, most banks can’t afford to pursue a purely digital course at this point in time.
Rabobank’s Gerrit Scheers discussed, in detail, how the bank has implemented its virtual kantoor (office) strategy. The parameters for implementing this new approach, for example, included the necessity to take into account the needs of its more rural and older customers. Even in these ‘virtual’ times, there are many customers who are attached to branch banking, for instance, because they still don’t use the Internet or don’t have Internet access at home.
Rabo’s answer to this has been to phase out many branches and to replace most of their services with ‘live’ agents on their website. This has had the advantage of cutting real estate costs and also with allowing sales of products to happen all day long. Before, conditions such as bad weather, would limit the sales and other transactions a bank could do while they still had to pay for overhead. Now, poor weather conditions actually result in more sales because people can access services anytime. To continue to serve other customers and for times when it is necessary to go to a branch, Rabo has revamped its branches with touch screens that are connected to the same live agents you can find online. The personnel costs, therefore, are reduced while access to help and a ‘real’ presence is maintained. Educating customers on how to use these new services is one of Rabo’s main objectives.
Overall, this seems like a sane strategy for easing customers into a new way of banking. It’s still a far cry from the kind of engaged banking we envision, but it’s a start.