PSBs can gain from branch network despite digital push
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Published on 24 August 2015
MUMBAI: Despite the onslaught of digital banking, public sector banks hold an advantage in their physical branch network and can reap the benefits by optimizing channels.
According to a study conducted by JD Power and associates, an American marketing information services firm, even in a highly "digitized" banking market like the US, 75% of customers sign into a bank by visiting a branch. Also when they have a problem, one-third of the customers prefer to try and resolve it by visiting a branch.
Speaking to TOI, Gerrit Kuyntjes, Vice President and General Manager, JD Power Asia Pacific, said even though digital channels are more efficient from a cost perspective, branches are not going to go away.
JD Power, which is well known for its research in the automotive sector, is now expanding to cover the country's financial services industry in collaboration with Percipient, an Asia-based technology and analytics company.
According to Navin Suri, CEO of Percipient, the banking industry has reached a stage where products are all commoditized and the only differentiating factor is customer experience and the way the bank uses data. He added that PSU banks are sitting on a gold mine in the form of their physical branches, considering that the average size of private and foreign bank branches has halved to 1000-1500 square feet and is now showing in crowds and queues.
"PSU Banks have to only gain from optimizing their channels. There isn't anything that is going to be taken away," he said. He added that more study was required on the customer profile and transactions in order to align the branches with the other offerings of the bank.