CCB’s Yu: “Defining the new role of the branch for the young”

• Amidst a rapid digitisation pace, Yu believes the number of physical bank branches will remain stable
• Yu believes that physical channels still play an important role as a bridge connecting customers and banks 
• China Construction Bank needs to better integrate technology into its system to promote the wider use of self-service bank

Brick and mortar branches remain an important part of China Construction Bank’s (CCB) service delivery and customer engagement strategy. While technological advances and shifting customer behaviour may change the design and functions of branches, they are still integral to the core customer experience with the bank.

Yu Jingbo, executive vice president in charge of channel and operation management of CCB, argues that despite the rapid pace of digitisation, the overall number of physical branches will remain stable. However, the types and purposes of branches that will exist in future will evolve.

“In the future, with the ongoing development of China’s economy, young customers whose age is below 30, will gradually grow and become the main forces of the society. Information technology will further change people’s behaviour, habits and lifestyles. Banks should change according to these changing needs,” he observed.

To transform into a “smart bank of the future”, CCB has in 2013 introduced a wave of innovations. It is taking lead in the industry by launching a big data platform, “Xiao Wei” (“小微”), to manage customer relationships in the frontline. In addition, the bank implemented the “cloud of finance” platform (“金融云”), leveraging the cloud to help manage data and information. It also has the most popular mobile banking app in the country, with the most number of downloads and users.

To date, CCB has established a combination of larger flagship branches, comprehensive branches and small-sized smart light stores, as well as thousands of simplified and standard smart teller machines (STMs), as part of its overall distribution strategy.

CCB’s flagship branches and light stores

According to Yu, the number of flagship branches and light stores will gradually grow in the coming years. In 2017, CCB targets to establish around 100 integrated flagship branches, which present a high-end brand image. These will be complemented by about 1,000 comprehensive light stores, which are designed to facilitate the “last mile” connectivity for customers who do not live in the urban areas.

The deployment of the two different types of outlets, Yu said, is based on two key considerations: first, to tap the economic growth potential of the area being considered for deployment, and second, to support the bank’s financial inclusion objectives.

With the deployment of more specialised and targeted channels, the bank hopes to enhance sales productivity. It also aims to increase sales employee ratio from the current 60% to 65%, which means that nearly 10,000 branch staff from transaction processing functions will be trained and re-deployed to sales positions.

The bank will also expand self-service banking. It will continue enriching service types, increasing product marketing efforts, and introducing more self-service functions.

And to ensure a seamless customer experience, Yu stressed the importance of online and offline integration. The digitisation of physical channels and augmentation of electronic channels, with more interactive customer experience and advice are facilitated by the use of video conferencing and augmented reality features and technologies.

Physical branches are still important

Yu believes that physical channels still play an important role as a bridge connecting customers and banks to improve the efficiency of the bank’s products and services.

“In 2017, we will build at least one model flagship branch for each of the light stores, as well as comprehensive branches in municipalities, provincial capital cities and other listed cities.”

Speeding up the use of intelligent technology and creating business model applications based on advanced analytical capabilities are also important. To meet these needs, the bank has conducted iterative development and had already launched 12 intelligent/smart banks.

To enable a timely and aggressive roll out of new branch types, CCB had to undertake a major exercise to document and standardise the procurement and management of all the major elements of the branches, from operations, compliance to sales and marketing. It also had to strengthen the branch management framework.

At the same time, as the bank upgrades its physical network it has also been persuading its customers to shift their transactions to the internet and mobile devices. It closely tracks and analyses changes in customer transaction behaviour to improve their mobile banking experience and to determine how best to integrate the user environment of physical channels into mobile environment. CCB proactively conducts marketing programmes to guide and shape customers’ mobile transaction habits.

A self-service bank needs integrated technology

The bank realises that to increase the use of self-service banking it needs to better integrate innovation and technology between the physical and digital user environment.

“We need to enhance innovation and improve the customer experience of the online environment. In order to promote the wider use of self-service bank, we need to strengthen and better integrate technology and the user experience,” Yu concluded.

Self-service banking, if efficiently implemented, could provide the seamless experience customers are looking for; but this should not, in any way, diminish the role of a physical branch in connecting clients to the banks.