Security, fraud, and risk Model Bank profiles: Alfa Bank and USAA

Banks have worked hard to manage the different risks across their institutions. It has been and will remain costly, time consuming and a top priority. Celent profiles two award-winning banks who have modelled excellence in their use of risk management technologies across their banks.

They demonstrated:

  1. Degree of innovation
  2. Degree of difficulty
  3. Measurable, quantitative business results achieved
(Left to right, Martin Pilecky, CIO Alfa-Bank; Gary McAlum, SVP Enterprise Security Group USAA; Joan McGowan, Senior Analyst Celent)

(Left to right, Martin Pilecky, CIO Alfa-Bank; Gary McAlum, SVP Enterprise Security Group USAA; Joan McGowan, Senior Analyst Celent)

ALFA-BANK: SETS THE STANDARDS FOR BASEL COMPLIANCE IN RUSSIA

Alfa-Bank built a centralized and robust credit risk platform to implement Basel II and III standards, simultaneously, under very tight local regulatory deadlines. The bank decided to centralize all corporate credit-risk information onto a single platform that connected to front office systems and processes. Using Misys FusionRisk, Alfa-Bank was able to implement a central default system with a risk rating and risk-weighted asset calculations engine. The initiative is seen as one of the most important initiatives in the bank’s history. The successful completion of the project has placed Alfa-Bank at the forefront for setting standards and best practice methodologies for capital management regulations for the Russian banking industry and Central Bank.

USAA: SECURITY SELFIE, NATIVE FINGERPRINT, AND VOICE SIGNATURE

The game-changer for USAA is to deliver flawless, contextual customer application services that are secured through less intrusive authentication options. The use of biometrics (fingerprint, facial and vocal) to access its mobile banking application positions USAA to be able to compete with Fintechs across the digital banking ecosystem and offer exceptional service to its military and family members.

USAA worked with Daon Inc. to provide biometric solutions paired with its “Quick Logon” dynamic security token technology, which is embedded in the USAA Mobile App for trusted mobile devices. Biometric and token validation focus on who the user is and who the verifiers are and it addresses increasing concerns around the high level of compromise of static user names, passwords, and predictable security questions from sophisticated phishing attacks, external data breaches, and off-the-shelf credential-stealing malware.

For more information on these initiatives, please see the case study abstract on our website.     

Why are credit unions changing vendors at a higher rate than banks?

Credit unions are almost twice as likely to change vendors as banks, with competitive churn rates of 7.6% compared to 2.7% for banks.  Churn Rate measures the number of institutions in a given time period that either change or drop a vendor contract.  Churn is broken down into two components: competitive churn, which measures the rate at which institutions are opting to change vendors, and consolidation churn, which measures uncontrollable factors like acquisitions or liquidations. The figure below (powered using data from FI Navigator) references total churn for the year ending March 31st, 2016.

FINPic

The figure reveals significant differences in churn between banks and credit unions.  But why is this difference so large? There are two possible drivers:

  1. Customer centricity: A focus on the customer could be a driver for higher churn. Banks and credit unions operate differently, and Celent has explored the variations in blogs and publications.  The mission statement of the credit union market has historically revolved around extreme customer centricity.  Over the last decade, mobile has become a critical component in quality customer service.  Emphasizing the needs of the customer could be driving credit unions to take more concerted efforts to maximize mobile/ digital, exploring competitive options more frequently than banks. Credit unions are low margin businesses that often give higher interest rates for products like auto-loans or deposit accounts through non-profit tax breaks.  Being member-owned, most of the smaller profits also go back into the business.  This creates a natural incentive to streamline the back-office, and credit unions have adopted cost effective technologies at higher rates. Thin margins combined with a focus on customer service could mean credit unions are more likely to evaluate provider options more frequently.
  2. Solution providers: Another perspective is that it’s the vendor market, not the CUs that are driving the churn. The vendor spectrum for credit unions in the US is much more diverse, with 43 vendors compared to 22 selling to banks.   This would reinforce the argument that competitive dynamics are more intense, and it would be reflected in sales cycles. With cost pressures that originate from their smaller size and lower margins, credit unions are more likely to look for alternative ways to provide products and services, leveraging mechanisms like Credit Union Service Organizations (CUSOs) to enhance the business.  Other similar joint ventures leverage cooperative arrangements to develop homegrown software products.  Consortiums not present in the banking market would introduce more competitors into the market, and as a result impact competitive dynamics.

Credit unions skew much smaller than banks (the mean credit union asset size is  $200 million vs. banks with around $2.5 billion), leading to a noticeably higher consolidated churn. Celent examined the pressures on credit unions here. As minimum viable institution size continues to get bigger, smaller institutions will be challenged to stay afloat. Vendors will face the risk that their customers are becoming targets for M&A activity resulting in more vendors competing for a shrinking demographic.

Credit unions need to think about how to best streamline their operations to remain viable.  This includes a mix of cost-effective customer service technologies like mobile banking.  Vendors need to have a better understanding of the competitive landscape into which they sell, as competition is intense.  Better data and detailed benchmarks can help vendors plan their strategy.

Celent is collaborating with FI Navigator to analyze the mobile banking market in financial services (in fact, FI Navigator wrote a great piece about credit unions and banks last year).  FI Navigator assembled a platform that leverages a proprietary algorithm to track every financial institution offering mobile in the US, as well as nearly 50 vendors.  Beginning with the first report at the end of April, Celent will be releasing a biannual examination of the mobile market. FI Navigator will also be making the platform available for further custom reporting and data analysis.  For more information on the nature of the collaboration and availability of data, go here.

Getting to digital while missing the point

Digital banking is so hot right now – for good reason. The recently published research sponsored by the Federal Reserve, Consumers and Mobile Financial Services 2016, reported that 87% of the U.S. adult population has a mobile phone and 77% of them are smartphones, up from 71% in 2014 and 61% in 2013. Admittedly, it is getting hard to find a phone that’s not internet-enabled. But consumers are acquiring them for a reason – and it’s not telephony. The same report documented the rise of mobile banking: 43% of all mobile phone owners with a bank account had used mobile banking in the past 12 months, up from 39% in 2014 and 33% in 2013.

Digital Banking Not surprisingly then, the significant majority of US financial institutions now offer digital banking capabilities to their customers. But, most were designed to migrate transactions away from the more expensive branch channel to lower-cost self-service mechanisms. A worthy objective, but it misses the point (more on that later).

Celent has research in the field now designed to understand just how far US banks and credit unions have come in achieving digital channel adoption targets. The short (however preliminary) answer: not very far. It’s not for lack of trying, however. Two-thirds of responding institutions said they have specific, measurable digital channel adoption goals.

Digital adoption goals Mar 16
Source: Celent Managed Research Panel, March 2015, n=32

Beyond Transactions More recently, a growing number of banks and credit unions are thinking beyond transactions toward digital sales and service. Another worthy objective, particularly among the large number of institutions that are, frankly, desperate for revenue growth. A minority have specific , measurable goals to increase digital customer acquisition. We expect that to change as more banks embrace the imperative for omnichannel delivery. Institutions thinking beyond transactions are paying close attention to the state of digital customer acquisition – for good reason. About three-quarters of banks in Celent’s survey track completion rates, but far fewer systematically follow up on incomplete applications. This is a problem! The apparent disconnect seems to reflect a bias towards digital delivery. If cost reduction is the primary objective (it rarely is) than good. But if revenue growth and customer engagement are what banks are after (I believe that to be the case) then many are missing the point.

In my opinion, the objective of omnichannel banking shouldn’t be tied to migrating an arbitrary percentage of customer interactions to the digital realm – whether transactions or sales. Consumers are becoming increasingly digitally-driven without bank’s involvement! The point of omnichannel delivery is to offer customers consistent and convenient ways to engage with your bank whenever and wherever they so choose, not to achieve some arbitrary channel mix.

The fact is, most consumers don’t want to open accounts on their mobile devices, even though they are very likely to be researching banking products and services online. That’s why banks need to offer a variety of low-friction ways to engage with customers and prospects. Click-to-call and digital appointment booking are two examples. Digital appointment booking (DAB), in particular, has emerged as “low-hanging fruit” among banks seeking to better integrate digital and in-person engagement. Although impressive results can be obtained from relatively modest effort, few institutions have taken this step.

Digital Appointment Booking First and foremost, DAB is not about driving branch traffic or somehow prolonging its relevance as some have suggested. Rather, DAB is about improving omnichannel customer engagement. Best practices suggest it is not a silver bullet either, but one of many customer engagement mechanisms that leading financial institutions are learning how to orchestrate to better serve customers. DAB is also not simply about booking appointments. When integrated with lobby management systems, DAB solutions help customers efficiently and effectively accomplish what they want and when they want it. Done well, DAB is very much a win-win. This is the point, isn’t it?

I’ll be presenting on best practices in digital appointment booking at American Banker’s Retail Banking 2016 in Las Vegas on Wednesday afternoon April 6th. The presentation is part of Innovations for Credit Unions from 1:00 – 4:00 in the afternoon. If you’re planning to attend, feel free to stop by and say “hello”!

Mobile in the time of digital

Bank of America recently announced that it would triple spending on its mobile app. While no exact dollar amount was given, it made me wonder: what exactly does that entail? In the past, Celent has praised the Bank of America mobile banking apps as some of the best out there. The bank has been going strong with its digital strategy for years, even closing branches and reducing overhead to drive adoption. Bank of America recently added features like touch ID, debit card toggling, two-way fraud alerts, and more to its app, and has been outspoken about the desire to personalize the digital experience. Its commitment to new features and functionality is reflected in the comments and ratings on iTunes and Google Play. Shown in the graph below, the bank´s mobile banking adoption has been steadily growing, with a growing share of deposits. Pictureforblog                     Source: BofA Annual Reports/ Investor Presentations So again: what does “tripling” mean when talking about an app that has obviously been well-funded for quite some time? As digital assumes a larger role with the business, the funding required to build a digital customer experience will extend beyond the reaches of mobile. The capabilities many consumers demand can be difficult if not impossible without significant effort on the backend to align technology. Banks are starting to realize this, building out unified digital platforms that streamline the architecture and better position institutions to offer truly modern, data-driven, and value-added consumer experiences. These kinds of initiatives can often run in tandem with larger cultural and multi-channel efforts. In the press release for the announcement, Bank of America said it was launching a digital ambassador initiative which, similar to the Barclays Digital Eagles program, will see front-line branch staff reskilled to be able to assist with digital channels. The bank is also launching cardless ATMs later this year. I´m assuming the coincidence of these announcements is anything but, and that the funds for “mobile” will largely be dispersed over (or fit into) a wider array of strategic digital initiatives. Institutions need to create a solid digital base within the institution, bringing in culture, personnel, and technology across all channels and lines of business to start transforming digitally. Banks are being challenged by the notion of “becoming digital.” Many have reached the point of recognizing the inevitable digitization of the business model, and are in the throes of decision making that will determine how equipped they are to appeal to the new digital consumer. Most institutions are experiencing these growing pains, and very few have committed to digital at the level demanded by customers. If Bank of America is indeed tripling its budget just for mobile, then I´ll be very interested to see the kind of features the bank develops over the next few years. Yet there´s a lot that goes on to make the front end look good and spending more on the front will mean more spending on the back. Mobile banking is a significant part of digital banking, but remember that it’s only ONE part. While new functionality gets the headlines, it’s what’s under the hood – culture and backend – that truly matters.

Customer engagement: how little things make a big difference (one analyst’s experience)

Typically, analysts opine based on analysis of industry data, informed by product demonstrations, telephone interviews and occasional focus groups. This time, I simply share my own experience at a top-5 US retail bank to illustrate how even seemingly little things may have significant customer impact – both favorably or unfavorably. This past weekend, I had a document needing to be notarized. Both my spouse and I had to sign the document and we had a busy weekend agenda. Recalling that as an account holder at a top-5 US bank, notary public services would be free of charge, I planned to visit a convenient branch in-between Saturday morning events. What could be easier? Recalling this bank was one of the relatively few that offered digital appointment booking, I thought it brilliant to book an appointment, rather than taking my chances upon our arrival at the branch. Plus, I was looking forward to getting up-close and personal with the appointment booking workflow. The bank’s appointment booking application was marvelously easy to navigate, but to book an appointment; one had to select an area of interest. This is a reasonable and beneficial requirement, because selecting an interest area ensures the subsequent meeting occurs with someone with requisite knowledge. The problem was that notary services wasn’t listed in the drop-down menu of interest areas. No appointment for me! Without the ability to book an appointment, I sought to make sure the branch nearby to our other activities would be open when we were available. Back to the bank’s website. Easily done, except for the repeated “Make an Appointment” buttons staring at me upon nearly every mouse click, which at this point served as an irritant. It caused me to think. On one hand, well-done to the bank for making the ability abundantly obvious. On the other hand, why no appointments for notary services. Are such needs rare, or does the bank only invite appointments for direct revenue-generating activities? The closest branch was no longer offering Saturday hours, so we trekked to another branch that was a bit out of our way, arriving just past noon. Being a Saturday, I expected it to be busy, but was unprepared for what I saw. Three staffed teller positions were active. All offices were conducting meetings and there were four people waiting in the lobby – complete with restless children which we were happy to entertain. To “speed service”, I was invited to check-in. The process wasn’t exactly high-tech. It consisted of a clipboard resting on a small table with space to write my name and time of arrival. Most of the previous names were scratched out with a combination of black and blue ink, so I figured our wait time would be acceptable. User impressions aside, I was struck with the notion that this very large bank had no consistently gathered information about why customers visit their branch, if they were actually served or not, or what their wait times were – unless some poor soul transcribed all our scribbles into a database. Not likely. Maybe that’s why they don’t offer appointments for notary services. After about a 10-minute wait, we were greeted by a well-dressed young man offering to assist. He quickly affirmed his ability to perform notary services and asked what it was that we needed notarized. I presented him our 1-page quit claim deed, whereby he apologetically replied that, while he was a notary, the bank was not able to notarize deeds. If only we had another sort of document, he would have gladly helped us. At least, he offered an alternative for us – driving back to the UPS Store next to where we hadbeen. No wait + $2.00 and we were done. We didn’t even need an appointment. I learned an important lesson that day.

Learning from mBank’s branch channel investment

The recent article in Finextra, mBank to spend EUR17 million on new network of ‘Light’ branches, prompted this post. At first read, I thought this was a story about a celebrated direct bank building a branch network. Well, not exactly. About mBank mBank is no stranger to Celent. It has received two Celent Model Bank awards. In 2014, Celent recognized mBank’s digital platform redesign and in 2015, Celent recognized mBank’s Bancassurance initiative. For those unfamiliar, mBank is a Polish direct bank brand established by BRE Bank in 2000 as one of the first of its kind in the country. Thanks to the mBank’s business achievements and potential of the brand as first and the biggest internet bank in Poland, BRE Bank Group decided in 2013 to change company name to mBank. Thus mBank became a mature brand with an offer addressed to mass customers, affluent personal and private banking clients, as well as businesses, from microenterprises to the biggest corporations. Through 2014, mBank has grown to more than 4.7 million customers, 6318 FTEs, and deposits totaling $20.6 billion. It’s currently the fourth largest bank in the country. Before It’s Time Long before the Simples, GoBanks, Movens or Hello Banks of the world sought to capitalize on the shift in consumer behavior, there was mBank – serving customers where they want, when they want and through an innovative direct approach that, in its day, was one of the first of its kind. Rather than copying other financial institutions, mBank sought to deliver a best-in-class digital experience inspired from the world’s best retailers. For example: • Its Virtual Store inspired by Zappos • Advanced search functionality inspired by Google • Merchant funded rewards inspired by Cardlytics • Research and advice inspired by Amazon and Mint • Video banking inspired by Skype and Google Hangouts • Gamification and social media integration inspired by Foursquare, Like and Love In 2014, seeking further growth, mBank leveraged its new digital platform to introduce a complete digital transformation of insurance delivery to retail and SMEs, under its Bancassurance model. The platform is offered under an omnichannel environment, accessible through online, mobile, phone, video, or branch, all supported by a real-time, event-driven CRM engine. mBank enables the entire process to be handled electronically, while decision making and purchasing can be started and completed through different channels at the customers convenience. As a result of its efforts, the bank built the 5th largest insurance business in Poland aimed solely at existing checking account holders. Considering this represents only 7% of the market, the result is compelling. Starting from the overhaul of its digital delivery in 2013, and then extending into insurance services, mBank is a model for how digital can transform an institution, enabling innovative applications that can substantially grow the business. A Branch Network – Really? An undeniable digital success story, this celebrated “direct bank” wants a branch network? It already had one…sort of. Bart of the BRE bank family of brands, mBank had always been a direct bank. But in 2012, BRE bank announced it would simplify its branding and brand all its banks as mBank. That initiative effectively made mBank a universal bank franchise. In my opinion, this is itself significant – a universal bank operating in three countries adopting a direct bank’s brand for the enterprise? Imagine BBVA adopting Simple as its global brand. You get the picture – except mBank grew to many times the size of Simple. So, this isn’t really a story about a direct bank building branches. But, it is a story about a fabulously successful universal bank investing heavily in its branch network. To some, that still may seem nonsensical. mBank knows that point of sale is important and needs to be done right. Its’ new “light” branches will no doubt be right for its brand and its markets. Retailers across most all segments get this too. The latest published statistics from the US Census Bureau (November 2015) tells the story with great clarity. Despite two decades of steady growth, industrywide e-commerce comprises less than 10% of total retail sales. ecommerce trendsAs important as the digital channels are, the branch will remain central to retail delivery for some time. Celent’s Branch Transformation Research Panel gets this too. In its first survey (June 2015) we asked panelists how important branch channel transportation is. After all, the topic was virtually all talk and little action for years. But, 81% of the panel confirmed that branch channel transformation is not simply important, it is imperative. Branch Imperative Because of this, Celent intends to thoroughly research the topic over the coming year. One initiative is our Branch Transformation Research Panel. Celent is accepting additional requests for membership in panel and expects to field ongoing research through 2016 at semi-monthly intervals. To request to be on the panel, visit: http://oliverwyman.co1.qualtrics.com/SE/?SID=SV_cx9ir9zpWcRgyix .  

Proposed new cyber security regulations will be a huge undertaking for financial institutions

New York State Department of Financial Services (NYDSF) is one step closer to releasing cyber security regulations aided by the largest security hacking breach in history, against JP Morgan Chase. The attack on JPMorgan Chase is revealed to have generated hundreds of millions of dollars of illegal profit and compromised 83 million customer accounts. Yesterday (Tuesday, November 10), the authorities charged three men with what they call “pump and dump” manipulation of publicly traded stock, mining of nonpublic corporate information, money laundering, wire fraud, identity theft and securities fraud. The attack began in 2007 and crossed 17 different countries. On the same day as the arrests, the NYDSF sent a letter to other states and federal regulators proposing requirements around the prevention of cyber-attacks. The timing will undoubtedly put pressure on regulators to push through strong regulation. Under the proposed rules, banks will have to hire a Chief Information Security Officer with accountability for cyber security policies and controls. Mandated training of security will be required. Tuesday’s letter also proposed a requirement for annual audits of cyber defenses. Financial institutions will be required to show material improvement in the following areas:
  1. Information security
  2. Data governance and classification
  3. Access controls and identity management
  4. Business continuity and disaster recovery planning and resources
  5. Capacity and performance planning
  6. Systems operations and availability concerns
  7. Systems and network security
  8. Systems and application development and quality assurance
  9. Physical security and environmental controls
  10. Customer data privacy
  11. Vendor and third-party service provider management
  12. Incident response, including by setting clearly defined roles and decision making authority
This will be a huge undertaking for financial institutions. Costs have yet to be evaluated but will be in the millions of dollars. It will be very difficult to police third party security because, under the proposal, vendors will be required to provide warranties to the institution that security is in pace. The requirements are in the review stage and financial institutions should join in the debate by responding to the NYDFS letter.

Unbundling, Fidor, and the model for approaching financial startups

I´ve recently had multiple conversations with financial institutions about the trend of unbundling financial services by FinTech startups. In fact, it’s hard to discuss the future of the industry without touching on it. Articles from Tanay Jaipuria, Tech Crunch, and CBInsights speak openly about inexorable disruption. They all tell a fairly similar story. Unbundled products and services disintermediate financial institutions by improving on traditional offerings. Banks lose that value chain. Banks become a utility on the back end, essentially forced by the market to provide the necessary regulatory requirements and accounts for nonbank disruptors. With images like this (see below), it’s hard to argue that it isn’t happening—at least at some level. Unbundling-of-a-bank-V2 There are plenty of reasons to be skeptical about the hype surrounding disruption by FinTech players (shallow revenue, small customer base, etc.), but even if only a few manage to become sizable competitors, that still represents a significant threat to banks´ existing revenue streams. There’s also data pointing to higher adoption in the future. A study from Ipsos MediaCT and LinkedIn showed that 55% of millennials and 67% of affluent millennials are open to using non-FS offerings for financial services. This number is surprisingly high, and the largest banks in the world are paying attention. The threat of losing the customer-facing side of the business is a legitimate risk that banks face over the next 5-10 years. But there´s a possible solution that could enable banks to remain relevant even as they begin to see some of their legacy products or services fall to new entrants: be more like Fidor Bank. Fidor Bank is a privately held neobank launched in Germany. It has a banking license and wants to transform the way financial institutions interact with their customers by creating a sense of community and openness. The bank views its platform, fidorOS, as a key differentiator that allows it to offer customers services from start-ups or new financial instruments. For example, it offers its customers Currency Cloud for foreign exchange as well as the ability to view Bitcoin through its platform. Going forward, it may make more sense for financial institutions to take this approach. Banks can´t be everything to their customers, and there´s a healthy stream of market entrants trying to chip away at the banking value chain. A middle way is that banks become an aggregator for popular nonbank FinTech offerings as they become popular. This would preserve the benefits of traditional bundling by aggregating offerings and re-bundling them alongside its home grown services. Some benefits include:
  • Maintain the consumer facing side of the business by letting customers access these service through your platform
  • Increase cross-selling and marketing opportunities
  • Preserve a convenient and frictionless experience by reducing the fragmentation of unbundling
These benefits would provide value to both the FI and the FinTech partner, and it´s not a new concept. Netflix is effectively an aggregator of content from a variety of production companies (along with creating great content of their own). The music industry has been offering bundled services for more than a decade. Banks are loath to forfeit parts of the business, but as other industries have seen, the longer they wait the more disruptive the change will be.

Is your institution leading or lagging?

This question comes up often. As a research and advisory firm, Celent fields ad-hoc research with regularity. No matter how well thought out our surveys, however, we nearly always wish we could have asked additional questions. This led us to launch two research panels focused on topics representing significant and growing interest among Celent clients. The purpose of the effort is to look deeply into the objectives, priorities, risks, barriers, and likely outcomes of two seminal retail banking topics in North America. Specifically: • Digital Banking • Branch Channel Transformation Both panels consist of bank and credit union leaders with significant interest and involvement in one or both of these topics, willing to invest in bi-monthly surveys and interactive webinars in return for complimentary access to the resulting Celent reports. Many are not Celent clients and would not otherwise have access to the research. Why are they doing this? We asked that question in a recent survey. Virtually all panel members are involved primarily as a benchmark to see how their institution is doing compared to the industry overall. It’s highly useful and timely insight for those involved (see below). Perhaps you’d like to join us. You could have compelling and timely benchmarks for your financial institution. Celent is accepting additional requests for membership in the Branch Transformation and Digital Banking Research Panels and expects to field ongoing research through 2016 at semi-monthly intervals. To request to be on one or both panels, apply Here.  
Why banks and credit unions participate in Celent's research panels

Why banks and credit unions participate in Celent’s research panels

Is the branch the newest digital channel?

The branch is an important channel is every bank, but the rise of digital raises two questions: what’s its role in with a digital engagement model, and how should banks think about its value? First, consider some of the challenges of the traditional branch for the modern, digital consumer:
  • Branches suffer from lack of talent availability. The best person for the job is not always going to be in the right location at right time. Yet mobile is driving “right time, right place, instant” contextual interactions, and consumers are increasingly expecting this level of service.
  • Many of the frontline staff are underpaid and undertrained, yet are the face of the institution. They often aren´t trained properly or paid enough to care about delivering the kind of customer service banks are trying to deliver through digital.
  • It’s difficult to distribute foot traffic across locations. Some branches suffer from massive queues, while employees at other locations are killing time on Facebook. This adds cost, lowers efficiency, and is incompatible with demand for instant service from consumers as well as modern IT delivery.
Digital has allowed industries to overcome some of the barriers facing other customer experiences. The challenges facing branches are no different. Virtualizing the workforce, aggregating talent, and allowing customers to access them remotely, either in a branch environment or from a personal device, is at least one path forward. Banks need to start thinking about the branch as a digital channel. Some institutions like Garanti Bank in Turkey, ICICI in India, and Umpqua Bank in the US are already starting to think in terms of remote delivery. As video service becomes more mature (i.e. video advisory through tablets), user experiences across devices will begin to blur, and the branch of the future will look even more like a digital experience. In the new environment, the branch becomes another presentation layer. Vendors like Cisco are already starting to move in this direction, combining telepresence, remote signature, displays, and other infrastructure to allow banks to facilitate remote interactions using context information. Others in the market are beginning to follow suite. The branch of the future has been a topic of discussion since the advent of online banking and mobile. While some meaningful progress has been made in branch transformation, some large institutions have launched numerous pilot ideas and concept branches that have amounted to little more than PR stunts. The role of the branch is changing, but it’s obvious that many aren’t exactly clear what that role is going to be. By talking about the branch as a digital channel, institutions may be better able to craft a true omnichannel strategy for customer experience.