• Citibank and SBI experimenting human-less digital banking experience at the mall

It’s still early in the day at Phoenix Market City, one of the largest malls in crowded Mumbai. Da Milano, Debenhams, Vera Moda and Samsung have surprising company — a State Bank of India (SBI) branch. And its unlikely location is not the only surprise.

For all appearances the branch is more of a gallery or retail outlet — no tellers in cages, no withdrawal forms or deposit slips. Instead, there are swank interiors, impressive looking gadgets, a space for hosting events, tablets and kiosks for banking functions, and… no staff in sight. At Palladium, another mall in upmarket South Mumbai, Citibank has a similar hi-tech, fully automated branch. “There are no human beings. And if you need to talk to someone, they are probably on the screen,” says one impressed customer. “We want to attract youngsters,” says SK Mishra, deputy managing director (corporate strategy and new business initiatives), SBI, referring to both the location and features of the new branch, branded InTouch. “Everything was designed and built keeping in mind the target segment, Gen Y.”

Adds Aman Bhargava, director, Grant Thornton India: “The mall is an ideal location (for such automated branches) because of the high number of footfalls, affluent audience, and predominantly young crowd with spending power.”

Human-less Banking

These branches offer a near human-less banking experience. Almost every banking transaction, including opening an account, can be performed with virtually no human intervention. At the Citibank branch outlet, for instance, a machine performs the role that a teller typically does in a bank — counts the cash, deposits and dispenses it. “There is no need for manual reconciliation at the end of the day,” says Anand Selvakesari, consumer banking head, ASEAN & India, Citibank.

At SBI, a person who walks into the branch can open a zero balance account in 15 minutes. A machine allows any of the approved KYC documents to be scanned, the signature to be captured on the machine using a stylus, and biometric verification to done with a finger scan to authenticate the person’s ID with the Aadhaar database. A machine next to it can print your debit card instantly. The instant service and gratification is paying off in terms of winning new customer accounts. When Sorab Patel (name changed) walked into the Citibank branch at Palladium, he was looking to avail of the 20% off offer for Citibank cardholders on high-end Samsung phones at a store in the mall. He was able to get the card the same day at the branch, which had an instant card printing and embossing machine, and then buy the phone. He now holds a current account with the bank, says Vineeta Suri, the branch manager. These branches are also open on holidays and follow the timings of the mall.

Tech savvy Indians

Experience in the three months since the SBI branch opened show consumers are taking to technology. SBI plans to open more such outlets in major cities and scaled down versions in smaller cities. “A lot of changes have happened in the online and mobile world including in retail banking, but nothing much had happened in the physical world,” says Karthik Kaushik, country business manager, Citibank India.

More banks are getting on board and an SBI official who requested anonymity because he was not a spokesperson said a few had even approached Accenture, the vendor it had partnered with for the exercise, with requests to set up similar stores. Accenture is reported to have flown in several global experts to help design the interiors of the SBI branch store and even design costumes for the branch staff — all 35 or younger. The branches themselves are modelled on Apple stores and designs were shortlisted based on feedback from its own Gen Y employees.

Globally, other banks such as JPMorgan Chase, Wells Fargo and Bank of America are also rolling out similar intiatives to make physical branches more relevant to customers. New branches that come up are more likely than not to follow this format. “Digital banking customers have been immersed into the digital experience by iconic technology companies like Google, Apple, and Amazon. These customers also have very advanced expectations from banks,” a report released by the Boston Consulting Group (BCG) last month points out. The report adds that transactions will be the primary battleground for market share between banks. “Traditionally, ATMs have been found in malls. If the bank can take some more space and enhance the customer experience, why not?” asks Bhargava of Grant Thornton. “The reason for a point of sale — be it an ATM or branch — is to engage the customer in transactions. And more the transactions, more the revenue for the bank,” he says.

Attract, Sell, Cross-sell

Despite the costs involved in designing and outfitting such branches, they are less expensive than traditional branches in the longer run. The cost of a running a people-less branch is approximately a tenth of a regular branch, says Bhargava. “A huge chunk of the costs is people. It’s also limited by the fact that branches can’t be open 24×7 unless you are willing to pay for two or three shifts. Ultimately, you are entering into the alternative space — which is 24×7 on the mobile, internet. So basically, what you are looking at is a mix of brick and mortar as well as alternative solution delivery,” adds Bhargava.

Citibank and SBI operate with around 10 people each, who work in shifts, at their branches in the mall.

These branches also have the advantage of accessing a pool of experts that otherwise have to be duplicated across branches. Citibank has a video-conferencing room where you can fix prior meetings with experts in any area and interact with them almost like it’s a face-to-face meeting. These also open up avenues for crossselling other products. “Because of technology, experts who were earlier available largely to institutions are now available to individuals,” says Selvakesari.

The high level of automation at these smart branches also opens up opportunity for analytics and big data and more targeted offerings and efficient customer service. For instance, a simple queue management system at the Citibank branch in Palladium, where customers punch in what transactions they are there for and receive an electronic token, can provide insights on how long customers are waiting and for what transactions.

As the BCG report points out, there is possibility of dramatic change in the level of customer service. But stickiness of banking relationships is also under threat as it becomes easier for customers to switch between banks.

Perhaps branch banking outlets at malls can provide the glue the keeps the stickiness.

The article appeared in the Economic Times. The article can be found here.