BAI Retail Delivery 2012 in Washington, DC
BAI Retail Delivery kicked off yesterday with a keynote from Sir Richard Branson. Branson shared his perspective on entrepreneurship and innovation and spoke about banking in particular.
Virgin group took over beleaguered Northern Rock bank in the UK and now underwrites one in three mortgages according to Branson. While Sir Richard is known for his brash and maverick approach at established industries, his suggestions for banking were much tamer. “We took down the iron bars,” Branson said, “to make it more personal.”
Banks across the world are making far bolder moves to revolutionize the branch. EFMA CEO Patrick Desmares pointed to Italy’s “Inflatable Branch” and Germany’s “Lifestyle Branch” with expensive lounge furniture, food and electronics. Desmares declined to identify the banks directly since while studying the expensive German Lifestyle Branch they stayed all day and didn’t see a single customer come in.
These anecdotes reflect the larger issue with “Banking Innovation.” The industry does need innovation in checking account products and branch facilities, but they pale in comparison to the impact of innovation in “Alternative Channels” which are in fact the mainstream channels for most consumers – and certainly the most profitable consumers.
Strategic banking innovation ought to be toward more bold moves like mobile account opening, loan origination, wealth, and cross-selling. Certainly I spoke to banks planning these initiatives but they are the handful that will be industry leaders once they fight the uphill battle of entrenched interests within their institution.
Real innovation in banking often comes from the old guard simply getting out of the way.