Are bank branches trying to replicate brokers?

By Larry Schlesinger | 26 Aug 2009

Comments made by senior bankers at the recent Retail Financial Services Forum suggest they may be looking to replicate some of the broker experience in their branches with a 'friendlier' feel

Speaking as part of a panel discussion looking at the industry post-GFC, Russell Jenkins, chief GM for retail and Distribution at Bendigo & Adelaide Bank, highlighted the fact that its branches had changed to be "fully open plan" and had moved away from counter service.

He said the bank saw its branches as community centers with facilities for conferences and places where local clubs could hold their meetings.

HSBC Australia's head of personal financial services, Graham Heunis, suggested its premier branches were more like lounges or living rooms and recounting how some international customers, visiting Australia, use its branches simply to "have a coffee or read the newspaper".

Ian Corfield, chief executive of BankWest, which has led the way in re-inventing bank branches, said when it comes to getting a mortgage, "people want to be in an environment that is friendly".

Corfield said it was a point of embarrassment for banks that "customers walk more quickly past any bank branches than they do any other store".

Related stories:

BankWest expands direct channel - Lender to open more than 50 branches in Victoria

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Commented by: Arthur at 30 Aug 2009 10:11 AM

I have no doubt that financial institutions would try to do whatever they can to satisfy customers. However, the one crucial point is, how can a bank promoting their own range of products compare with an ethical broker who can make a comparison on all products in the market. Furthermore, the modern philosophy of financial institutions is to cross sell other products. As a broker, sometimes I wonder whether the bank staff has actually consider the clients' position before selling? Or they simply have to survive the job by meeting their targets. Please do not be critical of brokers. I only sell my skill in financial borrowing. I advise customers to take out insurance, but I leave it to them to make their final decision. Never have I conidered to compensate my loss income in brokerage commission by cross selling insurance.

Commented by: James Veigli (Power Broker Secrets) at 01 Sep 2009 03:49 PM

Of course the banks are trying to replicate the broker experience - because they know it's what customers want!

A few 'minor' problems for them:

1. They can NEVER replicate the broker experience, they've only got their products to sell!

2. This may sound harsh, but most of the best bankers, loan writers and relationship managers have left banks to become brokers!

3. They are so 'cost-cutting' focussed (instead of 'value-add' focussed) that they'll struggle to offer LONG-TERM client support the way a good systemised broker does.

Not to mention they are S-L-O-W to make changes. It took ANZ years and years just to put in chairs and a ticketing system for their tellers. Go figure.

BankWest are clearly leading the 'friendly' branch race - but to me it looks more like a mobile phone store than a financial institution.

There's a fine line between 'boring bank' and 'try-hard-cool'... it's getting pushed!

James Veigli
Australia's Millionaire Lifestyle Broker Trainer
& Performance Mentor

Commented by: Glued at 17 Sep 2009 06:39 PM

A broker doesn't need a branch office with plenty of parking when they have the client's home or their own home office (or even their car) where they can sign the clients up. The problem however is that the banks have branch offices AND mobile lenders. Nevertheless there are SOME brokers who have the best of both worlds too and at the end of the day they will have a DISTINCT advantage over banks if they can outmatch them on the branch front. The distinctive factors apart from choice are locations, fit-out, parking space and number of branded vehicles on the road (mobile advertisements). The market leaders in financial services will be banks and mortgage broking/wealth management groups with great branch locations + mobile lenders/brokers/advisors. Individual banks may want to buy those groups and those groups may want to sell their own product suite. If price, fees and features are standardised (i.e. not much difference between lenders) then service and 'being liked/loved' is all that matters. Bring on the coffee lounges lenders, brokers and wealth managers... Actually why not look into the idea of joint venturing with established coffee retailers since coffee is now on the lender's product list and open plan lounges with a friendlier feel are now in demand. How about this for a deal... $2 coffee for the life of your loan! I'm perked! Sign up now ...I'm over here in the corner @@.

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