0MANAGEMENTCONSULTINGPREP©2014MConsultingPrep,Inc.1BranchOptimizationinRetailBankingDespitetheevolutionandaddedconvenienceofalternativechannels,thebranchnetworkcontinuestobetheheartofmostretailbanks.Manycustomersstillharborstrongpreferencesforthepersonalinteractionthatonlybranchesprovide.Evenremoteuserswanttoknowthattheycantaketheircomplextransactionstoalocalbranch.Withretailbanksfacingarangeofpressuresandpursuinggrowththroughdeposits,itismoreimportantthaneverforthemtogetthemostoutoftheirbranchinvestments.McKinseyhasbeendoinganongoinganalysisofbranchnetworksacrosstheUnitedStatestoseewherethesenetworksarefallingshortandhowFargoBank,amajorclient,canmakeimprovements.Exhibit1showsthathumaninteractionremainsimportantinamultichannelworld.DataisfromsurveystakenatFargoandotherNorthAmericanretailbanks.Exhibit1DatafromFargoandotherNorthAmericanretailbanksonchannelsofinteraction21.WhichofthefollowingstatementscanbeconcludedbasedontheExhibit1?A)Ofthosesurveyed,customerswhohaveanaverageof5ormoreWebinteractionsperweek,atleast85%eitherinteractswithabranchorcallB)10%ofsurveyedcustomersuseboththeATMandCallchannelsC)Ofthosesurveyedcustomerswhodon’tusetheWebchannel,58%useATMonlyD)Ofthosesurveyeddigitalusers,33%callsPersonalinteractionandservicerankhighlyintheconsumerdecisionprocessaboutwheretobank.Whilealternativebankingchannelsdeliveraddedconvenience,itisbranchofficesthatcustomersturntowhentheyseekassistancewithnon-routinefinancialneedsandwhereprospectsgotolearnaboutandopenaccounts.FargoBankhasacknowledgedthisbycontinuingtoinvestheavilyingrowingtheirbranchnetworks.TheHeadofRetailDivisionadds:“Today’seconomicenvironmentplacessignificantpressureonoperatingcostsacrossmostindustries,andforretailbanking,asubstantialportion(60to70percent)ofthesecostsarecenteredinbranchnetworks.Recentandexpectedregulatorychangeswillputadditionalpressureonprofitability.Sowhilethebranchisstillacoreassetandavitallinktocustomers,wewillneedtotakeahardlookatourbranchnetworkstoensurethatourcontinuedinvestme...
