Hybrid Space Making: rethinking the bank branch experience ...Secure Site paper final...
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HybridSpaceMaking:rethinkingthebankbranchexperienceforthedigitalage
Abstract
Asdigitaltechnologydisruptsfinancialservicesglobally,howshouldbanksgoaboutplanningthenextgenerationofbankbranches?Intheageofonlinebanking,whatarethenewhybridstrategiesthatwilldrawcustomersin,improveworkingconditionsforemployees,connectwithlocalcommunitiesandoptimisethepropertyportfolio?ThispaperdescribesaresearchprojectconductedbytheUniCreditbankinggroupinpartnershipwithUnwiredandtheRoyalCollegeofArttoexplorethehybridbankbranchnetworkofthefuture.Thestudydevelopsthreeframeworks–architectural,people,anddigital–andproposesamodelwiththreelevelsofhybridity.Itsfindingshavebroadimplicationsfornewwaysofworkingandinteractioninfinancialservices.
Keywords:workplace,ethnography,branchnetwork,hybridspaces,digitalrealstate,innovation,connectivity,financialservices
Introduction
Asdigitaltechnologydisruptsfinancialservicesglobally,thebricks-and-mortarbankbranchseemstogetmoreandmoreobsolete.Banksareclosingbranchesbecausepeopleareusingthemless,infavourofonlinebanking.AccordingtotheEuropeanBankingFederation,bankswithintheEuropeanUnionclosed9,100branchesandcut50,000staffin2016,partofatrendthathasreducedEuropeanbankemployeenumberstotheirlowestlevelsince1997.
Atthesametime,multi-channelretailingthatcombinesphysicalanddigitalchannelsisontheriseascustomersincreasinglycombinetactileandvisualstoreexperiencesinpersonwithonlineordering,selection,reviewsandtips.Thiscollisionbetweenbricksandbytesisdisruptingretailatbreakneckspeed.
Bothtrendsforcedustorethinktheroleofthephysicalbranchinthedigitalworldandhowtogoaboutplanningthenextgenerationofbankbranches.
Context
UniCreditisaleadingEuropeanfinancialgroupwithaninternationalnetworkspanning14coremarketsandanother18countries,with5,500branchesand25millioncustomers. Inregardtoitsbranchnetwork,Unicreditembracedchangingcustomerbehaviouratanearlystage.Anewbranchmodelforabettercustomerexperiencewaskickedoffin2012andhasbeencontinuouslyrefineduntiltoday.Thelookandfeelmaydifferslightlyfromcountrytocountry–alsoreflectingheterogenousmarketsandcustomersegments–butall
followkeyprinciples.Eachphaseofthecustomerjourneyissupportedinanoptimumwayleveragingon:
• Transparencyandremovalofbarriers• Engagementandmobility• Blendingofphysicalanddigitalspace
Morethan1,000brancheshavebeenalreadyrefurbishedaccordingly-adoptingthenewmodel.
Figure1:NewBranchModel,SofiaBulgaria
Thechallengesofthedigitaleconomy,thecontinuousneedforinnovationandtheobjectivetomoveclosertothecustomerhasalsoledUniCredittonewbranchformatssuchasthemobilepop-upbranch(BranchUp!).Supportingthemainbusinessobjectivesofnewcustomeracquisitionaswellascostreduction,thepop-upbranchcomeswithaninnovativeanduniquedesigntoallowfor:
• Flexibilityandadaptability:thebasicstand-alonemodule(6.6sqm)canbecombinedtocreatetemporarybranchspacesof40-70sqmetresofferingmultipleservices(e.g.cash,advisory,accountopening)
• Lowcostofimplementation:EUR15-20kforpilotproductioncost(permodule)• Easytohandle(setupinlessthan2hours)• Abilitytoattractandengagethroughdigitalenhancementsandgamification• Sustainability(madeofwood)
Thefirstprototypestartedin2014.Morethan30installationsinAustria,Italy,Germany,RomaniaandCroatiafollowedtoprovetheconcept.
Figure2:MobilePopUpBranch(BranchUp!)inIasi,Romania(2016)
Themobilebranchconceptisalsoillustrativeofhowinnovativeformatscouldhelpaddressingcustomerneedsinacostefficientway.Themobilebranchliterally‘comestothecustomer’–itdeliversservices(e.g.cash,wi-fi),advisoryandthe‘humantouch’inlocationsandareas(i.e.ruralareas,universities,hospitals,andsoon)rarelycoveredbytraditionalbankbranches.
Inthisway,themobilebranchconceptmaycontributetoanoptimizedfootprintofafuturebranchnetworkinacomplementaryway.Butthekeyquestionofhowbanksshouldgoaboutplanningthenextgenerationofbankbranchesremainsasubjectofongoingresearch.
Followingthetrendsofholisticcustomerexperienceandblurringboundariesbetweenphysicalanddigital,thehybridizationofspacesemergedasakeyfocusareatobefurtherexploredinthiscontext.UniCreditalreadyexperimentedwithhybridformatscrossingtraditionalboundariesbetweenofficeandretail,publicandprivatespace(seeCREJSandbilleretal.)Thenextstepwastodevelopasystematicapproachonhybridspace-making,drivenbyastrictbusinessagendaandcoveringtwodesigndimensionsofhybridspaces:
• Blendingdifferentusesandoffersintoonespace• Mergingphysicalanddigitalspace
Researchobjectives
Intheageofonlinebanking,whatarethenewhybridstrategiesthatwilldrawcustomersin,improveworkingconditionsforemployees,connectwithlocalcommunitiesandoptimisethepropertyportfolio?
Thisprojectisexploringanumberofquestionsaroundtheuseofthebankbranch,drivenbytheopportunityforUniCreditto:
• Leverageunusedspacewithinthebranchnetworkthatisofteninthecitycentreandwelllocated(IncreaseSpaceefficiency)
• Useexcessspaceinthebranchtosharecostsandgeneraterevenue(ReduceCost)
• Addofferswithinthebranchtoattractcustomersandgeneratetraffic,encouragingcustomergenerationandretention(Attractcustomers)
• Improvecustomerloyaltyandexperiencewithaportfolioofservices• Improvetheexperienceforthestaffinthebranch
ResearchApproach
Toinvestigatetheemergingopportunitiesforthehybridbankbranchnetworkofthefuture,itwasnecessarytodefineandunderstandhowthreeimportantelements–architectural,peopleanddigital–mightworkintandemandwhattheunderlyingbusinesscaseforthedifferentdegreesofhybriditymightbe.
Abroad-basedresearchteamwasassembledcomprisingrepresentativesfromtheUniCreditbank,theUnwiredconsultancy(aspecialistindigitalworkfutures)andtheHelenHamlynCentreforDesign,RoyalCollegeofArt(anacademicresearchpartnerthathasapeople-centricfocusandanexpertiseindesign-basedethnography).TheprojecttookUniCredit’sspacetypologymatrix–itsfourquadrantstoaidcollaborationandinteractionspanningfromprivatetopublicandfromworkspacetoretail–asastartingpoint.
Figure3:Matrixshowingfourspacetypologies
Theresearchteamorganisedtwostudytours–oneinLondonandoneinMilan–tolookatreal-lifeexamplesofhybridspacesthatcombineelementsofworkspace,retail,hospitalityandbankbranch.Theteamvisiteddifferentmodelsofcuratedandservicedofficespace,newretailandhospitalityenvironmentsandnewbankbranchformats,lookingforemerging
examplesofhybridspace.Ateachplace,thedesignapproachwasanalysedfromtheperspectivesofoffer/service,curation/deliveryandinteriorstyle.Thisprecedentstudypaintedarichpictureofthedifferenthybridspacescurrentlyonthemarket.Eachvisitwasrecordeddiagrammaticallyusingacolourcodingofredforbanking,blueforwork,yellowforhospitalityandgreenforretailtochartthedifferentelementsinrelationtoeachother.
Figure4:CopernicoinMilan,showingmixesofusesindiagramInMilan,forexample,theresearchersvisitedtheCopernicoco-workingspaceandpubliccafé,andanewcity-centrebankbranchformatforIntesaSanpaolothatfeaturesacollaborationwithafurniturecompanytohelpfosterbetterrelationshipswithclientsbycreatingapublic‘square’tohostevents.InLondon,wevisitednovelconceptssuchasthe02StoreretailstoreatWestfield,whichrethinksthetraditionalmobilephoneshopasaninspirationalshowcaseforthelatesttechnology,andVirginMoneyLounge,whichreimaginesthedeliveryofbankingservicesthroughafree,open,tech-enabledcommunityhub.EachplacewevisitedwasthenmappedontoUniCredit’sspacetypologymatrix.Adatabankswiftlybuiltuptoshowtherangeofhybridpossibilities,whichenabledustoidentifysomeessentialcharacteristicsofretail,work,bankbranchorhospitalityrelatedtodwelltime,permeability,flexibility,security/privacy,interactionandambiance.Thisbodyofworkalsopointedthewaytothecreationofover-archingframeworksforthearchitectural,digitaland
peopleelementsoftheproject.
ArchitecturalFramework
Theprojectaddressedthechallengeofcreatinganarchitecturalvocabularyforhybridspace.Ouranalysisidentifiedandarticulatedaseriesofcoresettings–advisory,service,loungecommunity,meeting,exhibitandfoyer–andplacedaservicebaratthecentreofthemodelasthemainactivationelementforthespace.
Figure5:ArchitecturalFrameworkWhetheraservice,sales,receptionorcafébar,thebarisacommonarchitecturalcomponentthatcanactasa‘blade’penetratingthespace.Thebar‘blade’buildsontheexistingwelcomepointwithinthecurrentbankbranch,reinforcingtheemphasisplacedon
themomentapersonentersthebranch;itnodstothetraditionsandritualsofretailenvironmentsbutoffersanewandinnovativeserviceapproach.Critically,itprovidestheprimarypointaroundwhichaflexible,modulararchitecturalstructurecanbebuilt;havingestablishedthekeyparameters,thestudyfleshedoutanarchitecturalkitofpartstocreateeachoftheidentifiedsettings.PeopleFramework
Hybridspacesareanimatedbyhumanbehaviourandinteraction.Sothenextphaseoftheprojectengagedamixofbankemployees,customersandparticipantsfromthewidercommunitytogenerateinsightsintorealneedsandcontextsthroughtherecordingofpersonalstories.Wewantedtounderstanduserjourneysandinteractionsthroughdigitalandphysicalspaceasakeycontributiontobuildingthenarrativeofthehybridbranch.
Figure6:PeopleFramework
Frontofhouse,backofficeandheadofficestaff;existing,newandpotentialcustomers;smallbusinessowners,entrepreneursandfreelancesfromthewidercommunity–allareplayersinanyhybridbankbranchnetworkofthefuture.Soallwereinvitedtoparticipateinaprogrammeofobservations,interviewsandworkshopsinMilantoidentifyusermoti-vations,expectationsandgoalsresponsiblefordrivingbehaviouraroundbankbranchuse.
Figure7:Participatoryresearchexercises
Notonlydidwegatherrichinsightsbutwealsotestedourinitialarchitecturalideasonthesegroupsanddiscoveredarealappetiteforsomeoftheideasbeingdescribed.Fromthisbodyofethnographicresearch,wecreatedfourarchetypalbankbranchusers(twoyoung,twoolder)whohaveparticularunmetneeds:SofiatheUrbanite,whoviewsbankscurrentlyasold-fashionedandtraditionalandseeslittlereasontoenterabranch;GaiatheStartUpEntrepreneur,whofeelsthatbankscandomoretohelpherbusinessgrow;PietrotheProfessional,whomissesthepersonalserviceandclientmanagementearlierinhiscareer;andAntoniotheSenior,whostruggleswithonlinebankingandissentimentalaboutthelocalbranchofthepast.Thesefourpersonashelpedthebanktofocusonvalueandbenefitsforkeycustomergroups.
Figure8:Thefourpersonas
DigitalFrameworkMorefluidinteractionsofawiderangeofpeoplewithdifferentneedsinflexible,modularspacenecessitatedanewapproachtotheapplicationofdigitaltechnologywithinthephysicalenvironment.Sotheresearchteamdevelopedasmartbranchinfrastructurewithadigitalframeworkbasedonfourlevelsofinteraction:Detect,Connect,LocateandEngage.
Figure9:DigitalFramework‘Detect’providesubiquitouscomputing,withcustomers‘checkingin’forfreewi-fi.Thisenablesthebanktointeractwithpre-registeredcustomersonapersonalisedbasis,byutilisingcustomerprofileswithbankinghistory,searchhistory,traveldataandsoon.Thissystemwouldgenerateuseranalyticsthatcouldbeanalysedforreal-timeadjustmentstoservices.
‘Connect’providesambientinformatics,expandingdigitalmediaintothephysicalenvironmentwheredataandinformationisavailableinspaceandtimeassomeonerequiresit.Thiscreatesopportunitiesforthebanktostart‘conversations’aboutnewproductsandserviceswithpeopleloggedintothesystem.‘Locate’takesthistoamoresophisticatedlevelatwhichlocation-baseddataandlocativemediacanhelpthebanktolinkpeopleandplace,improvingtheuserexperience,interactionsandservicesbothinstoreandonline.ThereisbetternavigationthroughIndoorPositioningSystems(IPS).
‘Engage’isthemostadvancedlevel:itprovidesthetechnologyforsynchronouscommunicationandaugmentedenvironments,facilitatingcontinuoustwo-waytransferofinformationbetweenanynumberofusers.Real-worldenvironmentsareaugmentedbycomputer-generatedsensoryinputsuchassound,video,graphicsandGPSdata,creatingbespokeexperiences.Therearedigitaldashboardsforbothcustomersandemployees,andconferencingandaudio-visualcapabilitieswithinthebranch. Thefourlevelsofthedigitalframeworkhelpedtoprojecttoframetheideaofthefuturehybridbranchasmoreexperiential,community-mindedandmarketfocused.
ThreeModelsofHybridisation
Inbringingthedigitalframeworktogetherwiththepeopleandarchitecturalframeworks,theresearchteamdevelopedthreedifferentmodelsofthefuturehybridbankbranchatdifferentscales;MiniHybrid,alsoknownasBankBranchPlus;MidiHybrid–BankBranchShared;andMaxiHybrid–BankBranchJunior.
Figure10:
AllthreemodelsweredesignedtosupportUniCredit’sdrivetoleverageitslargepropertyportfolioinamoreimaginativeandcost-effectiveway,connectingtolocalcommunitiesandcustomers,andprovidingabetterworkingenvironmentforstaff.Allthreeweredesignedtobuildonthearchitectural,peopleanddigitalframeworksestablishedearlierinthestudy.
MiniHybridmodel:ThisBankBranchPlusmodelisstillrecognizablyabankbranch.Itoffersupto90percentofspacedevotedtobanking.Thebankownsthespaceandgetsasmallcostcontributionfromotherpartnerssuchasabookshopinthecorneroracoffeeshoparea.ArchitecturalelementswithinaMiniHybridmightincludeacommunityco-workingareaandinformalloungeandmeetingareasalongsidecorefunctionsofthebankbranch,includingadvisorysettings,self-serviceareas,privateconsultationroomsandothers.TheMiniHybridmodelexploitsopportunitiestousespacewithinthebankbranchmoreeffectively,adaptingtheinfrastructureandlayouttooffernewservicesalongsidetheexistingbankbranchfunctions.Thebankwouldoperateandmanagethenewspaceswithafocusonimprovingcustomerexperience,loyaltyandacquisition.
MidiHybridmodel:ThisistheBankBranchShared,offeringonlyaround50percentofspacedevotedtobankingservices.Thebankstillownsthespacebutalargeproportionofthecostsarereimbursedbyexternalpartners,helpingtoleveragethebranchnetworkinaneconomicandcommunitysense.ArchitecturalelementswithinaMidiHybridmightexpandcommunalco-workingandprivateindividualworkareas,meetingroomfacilitiesandinformalloungeareasalongsidecorefunctionsofthebankbranch.Thebankmightbringinpartnerstooperateandmanagethenewspacesasajointventure,withagrowingfocusonbuildingmembershipaspartofanenhancedcustomerexperience.
MaxiHybridmodel:ThisistheBankBranchasJuniorPartner,devotingonly10percentofthespacetobankingservices.Twoscenariosexistwherethebankstillownsthespacebutitishandedovertoaservicecompanyorprofessionalpropertymanagertorun,orthebanknolongerownsthespacebutrentsaportionofthevenuealongsideotherserviceproviders,witharealestatecompanyowningandoperatingthemodel.ArchitecturalelementswithintheMaxiHybridmightextendtohavingamixofretailstores,exhibitionareasandinteractivezonesbetweenothersharedandbreakoutspaces.Thismodelisaboutincreasingcustomercoverageinalessintensiveandmoreinterestingwayinwhichthehybridspaceisnotperceivedasabankbranchanymorebutmorelikeanew,mixed-useenvironment.Technologiesforthesehybridspacesextendwiththelevelofhybridityfrombasicpublicwi-fiandvideoconferencingwithbankexpertsinremotelocations(MiniHybrid)throughtheprovisionofwi-fiprinting,electroniclockersandanapp-basedspacereservationandcheck-insystem(MidiHybrid)toadvancedcloud-basedservicesandspecialistsoftwareapplications,ageniusbarandITsupport(MaxiHybrid).
Twoscenarios
Totesttheapplicationofthehybridisationmodel,theresearchteamlookedathowthefouruserpersonascreatedbythestudy(Sofia,Gaia,Pietro,andAntonio)wouldinteractwiththehybridbankbranchofthefutureintwoscenarios: abusycitycentreurbanlocation(800sqmetres)andapopularholidaycoastallocation(around400sqmetres).Thismarkedthefinalphaseoftheresearchandcreatedaplatformforquestioningthemodelandidentifyingservicesandfeaturesthatrespondtodifferentcustomerneeds.Forexample,acity-centrehybridmembershipclubenablesPietro,theProfessional,toofferspacetohisownclientswhoareinneedofsomewheretowork;acoastalhybridbranchenablesGaia,theStart-upEntrepreneur,tohostameet-the-innovatorseventatthebankforlocalbusinesses.
Figure11:Scenariosforuseincity-centreandcoastalbranchesexaminedthroughpersonas
UltimatelythisbodyofresearchprovidedablueprintforhowUnicreditcanadaptitsphysicalanddigitalspacestodevelopthehybridbankbranchnetworkofthefuture,reachingouttocustomers,staffandlocalcommunitiesinamoremeaningfulwaywhileoptimisingspaceandmanagingcostsofthecorporaterealestateportfolio.
ImplicationofResearch
Somefirst‘physical’implicationsoftheresearchcanbealreadyseeninMilan.InJuly2017,UniCreditlaunchedthefirstBusinessCenterforsmallandmediumenterprisesservingaround1,600businesscustomersintheMilancentralcommercialarea.Followingtheminihybridmodel,UniCreditconvertedtheformertraditionalbranchinViaVerdiintoahybridbusinesscentrecombiningtraditionalbankingservices(industryspecificfinancialadvisory,bothindividualandautomated24-hourtransactionalservices)andahybridserviceofferforbusinessclients(whichtheycanuseontheirownortointeractwiththeirclientsandproviders):
• Co-workingrooms• Meetingarea• Loungearea• Eventspace/Agora
Figure12:BusinessCenterinViaVerdi,MilanItaly
Conclusions
Fromtheresearchanditsfirstapplications,itturnsoutthathybridspace-makingmightplayakeyroleinthefuturedesignofbankbranchnetworks.Nevertheless,theapproachisnotlimitedtothefinancialservicesindustry,butisrelevantinallcases,whereitcomestothedesignofexperientialspacesandthecapitalisationofrealestateassets.
Additionalsocialvaluecanbecreatedbyopeningspacetothecommunity,providingaphysicalplatformforinteractionandcollaborationinthedigitalworld.Theprincipleofusingspacemoreefficiently,andtoshareitwithotherservicesincombinationwithincreaseduserexperience,willleadtonewmodelsofpropertymanagementandintermediation.
Asinthedigitalworld,aggregatorsorspaceplatformoperatorsmayevolvetohostandcuratedifferentservices(hospitality,co-working,banking,retail,andsoon)tailoredtoaspecificcommunity.Atthesametime,theymayactasnewintermediariesbetweenlong-termrealestateinvestorsandspaceoccupiersbytransforminglong-termrentalcontractsandbigfootprintsintosmaller,moreflexibleuses.
Suchnewbusinessmodelsmayevenacceleratethemergingofphysicalanddigitalspace,sincethisallowsformorefluidinteractionsbetweenawiderangeofpeoplewithdifferentneedsinflexible,modularspacesfosteredbydigitaltechnology.
Lastbutnotleast,alloftheaboveevolutionhastobeenabledbyadynamicandhybridprogrammingofspacesupportedbyarchitecturalanddigitalbuildingblocks–akeyobjectiveoftheprojectdescribedinthispaper.
Footnote:
Theauthorswouldliketoacknowledgetheexceptionalcontributionsoftheothermembersoftheresearchteam:DavideRimontaandGiuliaVarano(UniCredit);PhilipRossandOwenKing(Unwired);andAndrewThomsonandImogenPrivett(RoyalCollegeofArt)