Features > Finance
‘Smart Branch’ realized through Smart Services

You probably don’t visit banks as often as you used to. Still, once you’re in one, don’t you feel that the place looks much less crowded than before? And haven’t you been surprised at its upgraded services? Let me introduce you to the secrets behind the changes that have transpired in banks and their services.

Perspectives on Bank Branches and Directions of Changes

A bank branch enters into direct contact with its customers: It is the most important channel for boosting a bank’s image and marketing. The location and size of a branch, therefore, are crucial to a bank’s ability to differentiate itself from its competitors. According to the results of a reliable survey, people are still in favor of visiting local bank branches to collect information on various banking products and purchase them, despite the fact that the internet and mobile banking services have become widespread and popular.


On account of the importance of their branches, banks have set up diverse strategies for developing them and pay keen attention to their successful implementation. Let me sum up their strategies as follows:

First, branches have diversified into various types and now focus on providing specialized services. The needs of banks’ customers are becoming increasingly diverse. As such, banks need a new paradigm to cope with the situation. To that end, they offer various types of branches including mini branches, mobile branches, BIBs (branch in branch) and even unmanned branches.

Second, banking services have been connected to various banking channels. Banks are enhancing their links with different banking service channels (branches, ATMs, internet banking, mobile banking and call centers), enabling them to offer the full range of services to customers irrespective of which banking channel they happen to be using at a given moment, or whether they are purchasing banking products or asking for banking services.

Third, banks have installed new banking machines equipped with smart technologies. Banks are installing new banking machines to further reduce CWT (customer wait time) and boost their work efficiency. This is impacting greatly on a variety of banking business areas such as bank transaction systems, customer navigation, branch layouts and branch operation and management. A ‘smart branch’ means a future-oriented bank branch that has implemented all the innovations and reforms outlined above.

Progress Made at International and Domestic Banks

Smart Branch’ campaigns have made incredible progress at home and abroad. First, let’s look at what has happened at some major international banks. Under the banner, “We make our customers’ lives more comfortable,” Barclays, a British multinational banking and financial services company, has launched the Branch Renewal Program and successfully carried it out under a hub-and-spoke model. As a result, its market share and new clientele have increased by 20% and 30% respectively. Umpqua Bank in the USA has introduced the Next-Generation Store Model, whereby the bank has adopted slow banking theories and concluded that banking is a retail business. In collaboration with a variety of communities, it keeps expanding its business boundaries. Meanwhile, Citibank has launched a global Smart Banking Branch campaign and equipped its branches around the world with cutting-edge banking systems and technologies in accordance with the provisions of its ‘global manual’.


In Korea, KB Kookmin Bank has introduced ‘pop-up branches’ using a container module. When an installation is done in seven days, costs are reduced by 50% compared with the establishment of an ordinary bank branch. The cost reduction rises up to 80% if a pop-up branch is reused. Shinhan Bank has opened special branches, called S20 Smart Zones, for college students in special consideration of the lifestyle of ‘twenty-somethings’. IBK (Industrial Bank of Korea) has joined hands with a telecommunications carrier to operate Smart Square, where it has installed C-ATMs, a new type of machine for financial transactions, and to offer integrated services of both bank windows and ATMs in one place.


Smart Branch Service Offered by LG CNS

LG CNS embarked upon its U-Branch (Ubiquitous Branch) business to upgrade local bank branches in the mid-2000s. Now, it is recognized as the most distinctive market leader in the smart bank branch sector in Korea. As mentioned above, ‘smart branch’ does not just mean the incorporation of smart technologies into bank branches. In fact, it involves setting up strategies according to different visions of banks; making improvements to bank business processes; and optimizing the layout of smart devices in a single space. Finally, it works out a more balanced reconfiguration of a bank branch environment so that a new branch can realize all the required reforms. Most importantly, LG CNS seeks to establish a bank branch environment that will bring added values and convenience to all the parties concerned – such as customers, bank employees and bank management.

Specifically, the service provided by LG CNS to realize ‘smart branches’ includes the setting up of branch strategies, the redesigning of work processes, the development of smart devices, the layout of branches, and the design of the SBP (Smart Branch Platform) and related services. In this respect, the services of LG CNS will continue to expand, develop and blend with cutting-edge technologies.


What, then, will a future bank branch look like? Will unmanned branches completely replace traditional branches for the sake of efficiency? Will there be department store-type branches that serve a number of banks instead of just one? Efficiency and profitability are important for banks. Interest rates and preferential treatment are crucial for customers. Their interests seem to contradict each other. Yet I personally believe that the needs of banks and those of customers will converge and end up germinating the ‘seeds’ required to bring about much-needed changes in bank branches. LG CNS will continue doing its very best to ensure that bank branches can offer top-of-the-class services to their customers because branches are the most important points of contact (POC) between banks and their customers.

YOUNG A OH (jiio@lgcns.com)

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