U.S. banks will spend $1.4 billion on new technology on their branches by 2006, up from $800 million in 2003, as they transform branches into selling centers, according to a report by Datamonitor. Banks will renew approximately 30,000 branches, about 26% of the total, with new technology by 2006. Key IT initiatives include replacing legacy networking infrastructures, enabling teller and platform workstations with customer-relationship-management tools, and boosting customer self-service capabilities. Wireless technology will become an increasingly important tool, giving staff the freedom to move about the branch. Bank of America, for one, had experimented with outfitting tellers with wireless devices to roam the lobby but scrapped the idea as too costly.
The upturn in spending marks a return to a back-to-basics approach following a period of infatuation with Web banking; in an effort to shed costs, some banks had set up independent online subsidiaries, such as Bank One's Wingspanbank. They've since come to view branches as the cornerstone of their retail delivery strategy, installing Web-based technology to tie them into other distribution channels such as the Internet, call center, and ATM.
The teller platform is a core focus of branch renewal efforts. Browser-enabling the teller front end will enable banks to deliver services such as check imaging more effectively. The aim of turning banks into sales centers is also leading to increased investments in CRM, according to Datamonitor.