CFIC Introduction
◆ The banking industry is transforming towards intelligence, lightweight, and scenario-based, and some banks adhere to the principle of "small and light" scale and "comprehensive and refined" functions for branch layout. In terms of scenario-based innovation, some banks try to play with "finance +" services across borders, using 18 kinds of martial arts to attract customers, so that branch outlets can play a value beyond traditional financial business, and expand the infinite possibilities of characteristic operation.
In early July, Wang Tong, a college student studying in other places, returned home from summer vacation to find that the Dandong Bank in front of his home had "disappeared". According to the financial license information of the State Administration of Financial Regulation, the Dandong Jiangjingzhidu Branch of the Bank of Dandong, located at No. 19-1 Jiujiang Street, Yuanbao District, Dandong City, Liaoning Province, will be closed in January 2024. With the development of financial technology, "fingertip banking" has become the first choice for many bank customers to handle business. As the front-line position of customer expansion, the bank's offline outlets have shown a downward trend in recent years. According to statistics from the China Securities Journal, in the first half of 2024, more than 1,100 commercial bank branches, business offices, branch offices and other institutions will close down and withdraw. Behind the abolition or merger of sub-branches, banks are considering the balance between revenue and cost, and are more sensitive to operating costs. While the branches are "slimming", how to improve the service quality is undoubtedly an important issue for banks. On the whole, the banking industry is transforming in the direction of intelligence, lightweight, and scenario-based, and some banks adhere to the principle of "small and light" scale and "comprehensive and refined" functions for branch layout. In terms of scenario-based innovation, some banks try to play with "finance +" services across borders, using 18 kinds of martial arts to attract customers, so that branch outlets can play a value beyond traditional financial business, and expand the infinite possibilities of characteristic operation. Changes in customer behavior prompted changes in the setting of outlets Talking about the reasons for the aforementioned branches being abolished, an insider of Dandong Bank told reporters: "Due to the lack of business, there is no benefit. Very few young customers come here to do business. After the branch was closed, the original staff was assigned to other branches. Employees who have access to the door are willing to move upwards, and front-line tellers have been in short supply. "It is clear that in recent years, some banks have fewer and fewer branches. But this has little impact on me, I usually don't go to bank outlets much, most of the business is operated on mobile banking, which is very convenient, and there is no handling fee for inter-bank transfers. Wang Tong said. Wang Tong is the epitome of contemporary young people, and the development of financial technology has made "fingertip banks" fly into the homes of ordinary people. According to a report released by the China Banking Association, in 2023, the number of off-counter transactions (business handled through non-counter channels) of banking financial institutions will reach 491.439 billion, a year-on-year increase of 9%; The total off-the-counter transaction volume was 2363.82 trillion yuan. Shifts in customer behaviour are prompting banks to make changes in their branch setups, most notably in the form of a reduction in the number of branches. On July 4, the reporter inquired on the financial license information platform of the State Administration of Financial Supervision and found that since 2024, more than 1,100 commercial bank branches, business offices, branches and other institutions have closed down and withdrawn, including many "old outlets" that have been established for more than 40 years. In contrast, about 960 commercial bank branches, business offices, branch offices and other institutions have been approved for establishment. In the first half of 2024 alone, there will be a net reduction of more than 140 bank-related institutions. "The goal for 2024 is to reduce the proportion of inefficient outlets and significantly reduce loss-making outlets. The person in charge of the Jiangsu Huai'an branch of a bank told reporters that the current bank attaches great importance to reducing costs and increasing efficiency. In 2024, the bank will promote the full-functional, integrated and experiential construction of outlets under its jurisdiction, gradually eliminate small outlets, sink personnel and business, and build an all-round outlet with integrated operation of assets and liabilities. In the opinion of experts, the large number of outlets is a prominent characteristic of the mainland's banking industry, especially large commercial banks. For a long time, branches have been the main channels and places for banking services, and they are an important embodiment of the competitiveness of banks. Banks can expand their scale and increase their market share by increasing their branches, attracting and serving customers. However, branches are also the most expensive, difficult to manage, and risk-intensive service channels for banks. If the distribution of bank outlets is scientific and reasonable, the functions are fully exerted, and they can meet the needs of customer service, then they are good marketing networks, trading platforms and service places; Otherwise, the branch will become a burden for the bank. A number of industry insiders said that in the context of increasingly fierce competition in the industry, banks are turning to refined management and increasing their sensitivity to operating costs. If some banks' branches are not profitable enough to cover their costs for a long time and lack a clear advantage in customer acquisition, they may be eliminated or merged with other branches. "In particular, some community sub-branches have relatively single functions, and under the trend of integrated financial services, it is difficult to meet customer needs in one stop, and there are service shortcomings." According to the account manager of a bank, most of the customers of his community branch handle bank card loss reporting, printing credit reports, and inquiring bank card statements on weekdays, and it is difficult to expand new business. Compared with other banks that have reduced their outlets, Zhang Ran (pseudonym), a person from the head office of a city commercial bank in East China, told reporters that from 2021 to the first half of 2024, the bank will add a total of 18 new outlets. The decision to expand the network is made after analyzing the market space and profit expectations. "For banks, the difficulty of adding new outlets mainly lies in the scientific location of the location and the rationality of operating costs. From an economic point of view, the location of our outlets is not concentrated in areas of oversupply, but focuses on county towns and towns, and some new county branches and characteristic branches have been opened. Zhang Ran said. It is necessary to ensure that financial services do not shrinkAlthough the reduction of bank branches is an inevitable result of digital transformation, the function of offline branches cannot be completely replaced by "fingertip banking". Some elderly people who are not good at using new technologies, or other customers who are not good at doing business online and are unwilling to do business online, still have a strong demand for offline outlets. For a long time, long queue times and slow business processing have made bank branches often criticized. Therefore, it is also important to ensure that the service of bank branches is not compromised while "slimming down". At the end of June, the topic of "only one of the three business windows of a state-owned bank is opened" sparked heated discussions on Weibo, and many customers had no choice but to leave due to the long waiting time. In this regard, the lobby manager of the outlet said that the "special situation" at that time would have two tellers to handle business on weekdays, but one of the tellers went to study and train. The relevant person in charge of the bank said that after the incident, it has been rectified, and two windows have been opened. Many customers complain about the efficiency of business handling in bank branches. "At noon on Wednesday, I went to the bank to replace the bank card when it expired, and I waited for 40 minutes. The average age of customers who handle business is more than 60 years old, and many of them do not have bank cards, and they don't understand mobile banking, which is to deposit and withdraw money with a passbook. The bank staff at the scene kept explaining to the old people that the business was very slow, but fortunately I was not in a hurry that day. Xiao Wu, a resident of Sichuan, told reporters. According to industry insiders, the proportion of elderly customers in some bank branches is relatively high, and staff will spend more time explaining business processes, "which does not match regional needs and often gives us headaches." "In addition, as the compliance requirements of banks become more and more stringent, the time for handling a single transaction has also increased objectively. For simple business, banks often guide customers to self-service machines for processing, and manual windows for more complex business. "It's not that I'm slow, it's that there are too many procedures, and I'm fast enough." A bank teller said helplessly. Li Ming (pseudonym), the person in charge of a branch of a state-owned bank, told reporters that whether the counter calling strategy of the outlets is reasonable or not directly affects the scientific scheduling of counter resources and the waiting time of customers. Therefore, the flexibility of the branch operation staff and the comprehensive operation ability of the tellers in each position are very important. "A few days ago, two corporate customers came to handle business at the same time. According to the business volume, our bank has configured an enterprise account opening counter. Normally, corporate customers should handle business at the corporate counter. However, at that time, the operation staff of the outlets did not stick to the fixed post arrangement, and guided customers to the cash cabinet to handle business. Li Ming said that on weekdays, strengthen the comprehensive operation ability of training tellers in various positions, and be able to deploy service windows in a timely manner at busy or critical moments, which can play a role in business diversion. In addition, many bank branches have optimized and adjusted the layout of business halls, adding self-service areas and rest areas. At the same time, through the introduction of intelligent equipment such as self-service ATMs and self-service inquiry machines, it can also reduce the waiting time of customers to a certain extent. Cross-border expansion of "finance +" services is the foundation of the bank's survival, and some banks are carrying out branch layout in accordance with the principle of "small and light" scale and "complete and refined" functions, and are transforming in the direction of intelligence, lightness and scenario-based. "When I went to the bank a few days ago, I was shocked that I could still see a doctor in the bank branch, which has a traditional Chinese medicine clinic, an oral health care room, and a rehabilitation physiotherapy area." Xiao Zhang, a resident of Shanghai, told reporters. The Shanghai branch of Xiamen International Bank, where Xiao Zhang went, built a characteristic outlet of "finance + health" targeted services around scenario-based financial services. In the hall, there is a visual health intelligent management center and a chronic disease health management support center, equipped with smart health equipment, to provide customers with self-service health services. At the same time, a famous doctor studio has been set up, so that customers can enjoy high-quality diagnosis and treatment services. Drinking coffee, tea, and dessert at bank outlets is nothing new. In addition to seeing a doctor and doing physiotherapy, customers can even experience 360-degree car viewing, car selection and test drive appointment functions in some bank outlets, and enjoy the "one-stop" full-process comprehensive auto financial services...... Industry insiders said that looking forward to the future, banks will accelerate the pace on the road of building characteristic branches or outlets, and it is expected that more small and medium-sized banks will join the ranks. However, in the context of the new development trend, financial institutions must think deeply about how to ensure that these branches or outlets are not just ornate decorations or empty gimmicks, but can truly implement unique operations and create their own distinctive brands. This is not only the key to competitiveness, but also a necessity for financial institutions to remain viable in an increasingly competitive market environment. "In the context of the development of digital finance, the existence of bank outlets can provide customers with more humanized financial services, better meet the needs of customers for personalized financial services, and at the same time, promote the better development of digital finance through the intelligent transformation of outlets. Banks need to comprehensively consider factors such as the development of digital information technology, changes in customer demand, industry market competition, and financial regulatory requirements, and comprehensively balance online and offline service channels to provide customers with high-quality financial services and promote their own sustainable development. Lou Feipeng, a researcher at the Postal Savings Bank of China, said.
Source of this article: China Securities Journal
Author: Zhang Jialin
WeChat editor: Wang Qian
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