How Thai banks are breaking the branch mold

Krungthai Bank is looking to launch five more retail-like branch formats in 2019.

Thailand’s banks are transforming the intimidating look and feel of their brick-and-mortar branches to resemble friendlier, cafe-style ambiances in an effort to bring in more customers to their doors.

Despite the proliferation of digital tools and the emergence of mobile banking, physical branches remain an important tool to interface with clients.

In an attempt to merge the digital experience with the branch experience, TMB Bank launched a prototype concept, TMB Experience, allowing small and medium-sized enterprise (SME) clients to generate their own avatars in February. Available at its branch at Icon Siam, customers who enter are immediately presented with a 4-5 question e-form to create their avatars. From there, they will receive a QR code based on their needs, as well as instructions on where to proceed for their transactions.

“The small quiz is so that we can find out who they are, and what they need, so that we can offer quick-match services,” Sasapak Kiatsommart, team head of retail marketing management - bancassurance and mutual fund at TMB Bank, said at the Retail Banking Forum held at Bangkok on 16 May.

“For example, if you are, let’s say an affluent customer and you’re looking for a new source of funds, then we will know from the small questionnaire and we will pop up the service or recommended product, and we can direct them to the right station we have in the branch. They don’t have go around and ask people,” she explained.

Krungthai Bank, Thailand's second largest bank by assets, is also embarking on a complete revamp of their physical branch network to enhance the overall banking experience. Krungthai Bank opened the second flagship of its Precious Banking service in Singha Complex in early 2019 that draws inspiration from a hotel lobby and features expansive meeting rooms and lounge areas to replace traditional and clinical transaction counters.

“We’re putting in a lot more new technology at different parts of the bank - not only new queuing systems with a camera for facial recognition,” Arapat Sangkharat, EVP, Transformation at Krungthai Bank, highlighted, adding that new applications and hardware are also being installed at high counters to enable clients to transact with the use of their national IDs.

“That will change the customer journey because it’s not about coming to a branch, pushing a button to queue and sitting there waiting to do your transaction, when a lot of the transactions can be done upfront,” he explained. 

Also read: Thailand embraces facial recognition tech for e-KYC

He pointed out how US-based Umpqua Bank has converted its bank branches to resemble an upscale cafe or contemporary store in an effort to deepen customer experience. Its San Francisco flagship location reportedly broke the mold back in 2013 with its outdoor seating and free “loaner” bike clients can use for a couple of hours. The transaction area was also designed to look more like a hotel registration desk, and features two mobile concierges or associates equipped with iPads and headsets, to service customers anywhere in the branch.

How Krungthai Bank is future-proofing the bank branch from Charlton Media Group on Vimeo.

Sangkharat further noted that employees dress can also significantly tone down their ‘professional’ look to ease customers’ minds. This could mean simple slacks and polos for front-desk personnel at low counters dealing with day-to-day transactions for the average customer, to a blazer and ‘smarter’ casual wear for senior level workers dealing with affluent clients.

Krungthai Bank is looking to launch five more retail-like branch formats in 2019, with over 10 new technologies to be deployed to augment human touch.

Given how mobile banking is becoming more common amongst locals, concerns have been raised on whether there is still a place for brick-and-mortar branches. But Sangkharat and Kiatsommart agreed that, at least in the short term, they are here to stay - so long as they efficiently meet the needs of their clientele in a way that entices them to ditch their phones and come in for personal, face-to-face financial advice.

“In reality nobody wants to go to a bank branch. I think people get excited about going to the mall or going shopping, or going wherever - to hotels or restaurants - but a bank? Yes, we still do need to look professional but it has to be more retail-like, and that’s in the design of the look and feel,” Sangkharat said. “We need services where it’s like you’re going to a hotel. You don’t feel like you’re coming in to do a transaction; you feel like you’re getting a service.”

Although Thailand has one of the highest digital interactions in the world at 73% compared to the US (46%) and Singapore (66%), the country is still heavily reliant on physical bank branches for day-to-day transactions, which explains why so many Thai banks are changing their physical branches.

All of the presenters at the forum acknowledged that their banks would not be expanding their branch networks with additional stores, so for now the battle has shifted from who has the most locations to who has the best branch, and perhaps coffee too.

Photo from Krungthai Bank.