Driving into Edinburgh from our borders abode the other afternoon, I came to the lights at Leith Walk and noticed on the corner of Leith Walk and MacDonald Road the now-defunct Leith Walk branch of Clydesdale Bank, which suddenly seems to have vanished in recent weeks.
It caused me to reflect on the malaise that pervades UK Banking, through the wholesale slaughter of the ‘branch network’. I say this advisedly, as almost no credible defence has been put forward to prevent this from happening, thus disenfranchising hundreds of thousands of bank customers across the UK, who actually still like to have access to a branch; this includes many of my own age, who are not yet users of Internet banking and arguably never will be (I exclude myself from this particular category!)
Interestingly, any time that I go into RBS or Bank of Scotland Branches in Kelso on The Square, I find them to be busy with a pretty high degree of footfall and a good blend of young and old. At the same time, I find them resolutely shut at hours, which could be more convenient to many, ie. those who have to work for a living with set hours daily and those for whom an evening or a weekend would be much more “convenient”. I then wonder why this potential need has been utterly ignored.
Many moons ago, in a bank I ran, we engaged in a piece of market research, which examined the behavioural propensities and switching likelihood of our customer base – this was in 1993!
The results of the research were powerful, indicating a variety of customer preferences in respect of opening hours and service levels depending on locations, ie. the suburban customer demonstrated quite different propensities and needs compared with either the rural or the city centre customer – it became very clear that a generic proposition in terms of opening hours simply didn’t cut it!
Accordingly, we started to experiment with different opening hour models, including Saturdays for branches in malls (where you were paying top dollar anyway for retail space!) to town centres and also took a look at early morning opening on market days in rural towns, where there was a strong farming preference! The differentiation was immediate!
Obviously, staff had to be consulted and had to acquiesce in terms of agreeing to work different shift patterns etc. In the main this was achieved although not without a certain amount of opposition from the Union.
This dissipated over time when it became very clear that customer preferences were really being met. One of the criteria that was expressed in the research by customers was that if we were to open on Saturdays, they expected full service banking ie. not simply peddling home loans and personal loans. This we dealt with.
Given the tragedy in UK banking following the crisis of 2008/09 where our reputations were dragged through the gutter, one would imagine that banks’ managements would have taken real care to ensure that they would rebuild the trust that previously prevailed with the customers.
However, it seems that the “bean counters” are alive and well and that the concept of using a branch presence (not necessarily the existing bricks and mortar) as a pivotal piece in a bank’s distribution strategy along with online/mobile/telephone/etc is either misunderstood or totally disregarded. One suspects that the current crop of bank chief executives who have little or no experience of “the customer” cannot comprehend what this is doing to their business.
Challenger banks will gradually erode the existing top heavy franchises and hopefully we can see some genuine competition coming back, which will benefit customers as a whole.
* Glasgow-based John R Wright is an academic, veteran banker and a former CEO of Oman International Bank and Gulf Bank, Kuwait.
BANKER
