Technology Enabled Business Model
In the many years leading up to now, Financial Institutions used the same Branch and Teller model to serve consumers. The solution for growth was simple, build another branch with the prevailing opinion being “If you build it they will come.” The rising cost of this model, the preference of the consumer and the growing demand and changing opinion of convenience make a new approach necessary.
Hub and Spoke
The “Hub and Spoke” model has been used for distribution and service delivery for many years. In this model, a central hub supports and enables many smaller distribution or service locations. In the case of the Financial Institution, the branch offering expanded personal service would act as the hub while self and Assisted Self-Service are the spokes. This model greatly reduces operational coast while improving convenient consumer service.
There is no single solution or model that fits every financial institution. These models will vary based on the size, budget and goals of each. The technology applied will also vary based on the demographics is the area, the proximity to the hub (branch) and the population they are intended to serve.
You need look no farther than the largest Financial Institutions to understand the transformation model that is currently prevalent. The 3 largest of these are currently using the same business model to transform their businesses. They continue to develop their Mobile capability, gradually close branches and use technology to improve the remaining. Also, they use Self-Service and Assisted Self-Service to provide convenience at a fraction of branch cost.