Not everything I knew about Japan was wrong, just everything I thought I knew about its banking environment. For this month's feature story, I had the opportunity to explore banking in the land of the rising sun, reporting firsthand on Citi's branch of the future model in Tokyo, and consider what lessons it offers for the future of American branches.

My first Japanese surprise was that cash is still king. Except for major tourist destinations, card acceptance was low. Second, most bank branches seemed downright shoddy, located on upper floors of buildings with no air of efficiency, or sales or customer orientation. I expected to find Japanese consumers massively engaged in mobile payments, but other than some adoption in the rail network, NFC payments weren't widely visible.

These incongruencies clash with Japan's tech-savvy urban population, and give Citi plenty of room to satisfy its targeted affluent customers with its new approach.

But Citi's new model of a high-tech, self serve branch-and here at home the effects of mobility and regulation on the retail banking business model-again raise the question of the branch's role going forward. Is it a self-service or sales destination, or something else entirely?

Nascent trends in the American market indicate a hybrid future. More than 60 percent of North American bankers recently told Celent their first priority is to improve branch sales results. In this vein branch construction and remodeling projects lean toward open floor plans, installing CRM systems, and technology that frees branch staff for more, and more capable, selling.

On the other hand, when talking about the future of the industry bank analysts always bring up the airline industry-where customers have been trained to check in online and print their own boarding passes. Supporting this self-service approach are remote deposit capture rollouts and a whole host of smart ATM technology.

One unanswered question has been how customers will react to changes in the branch model. That question was answered, at least on a small scale, in late July when uGenius released independent survey results of experienced users of its "personal teller machines" that connect credit union customers to a teller via a video link at an ATM. High level results found that more than 90 percent of users were satisfied with the experience, says uGenius CEO Gene Pranger.

His takeaway from the survey is what Citi predicted when it designed its "smart banking" strategy, and good news for banks that hope self-service will cut branch costs so they can invest more in sales. Pranger says, "People are willing to trade off live personal service and use a more easily accessible transaction device-if it meets their needs."

I'd bet he's right about that. By revolution or evolution, self-service branches, and all the associated technology, seem as inevitable as the rising sun.


Rebecca Sausner


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