With the opening of 4G and the extensive use of Smartphone and ipad, there are a series of changes in banking, including new technologies changing the interactive mode, social culture, and communication pattern; changes in the discursive power of banking services; changes in customer base; changes in social demand. The bank user terminal is being transferred to the mobile terminal. As the mobile Internet becomes an inseparable living scene for more consumers, the role of banks, especially physical bank outlets—one of the traditional main channels for customer cultivation and market occupation, in financial product development and customer relationship maintenance is impacted.

Inluence of mobile Internet on banking & financial services

The function of physical bank outlets is weakened. Adding physical outlets is always the principal means for domestic banks to expand, because lots of outlets and large-scaled total asset mean high profits. However, the presence of mobile Internet weakened the function of physical bank outlets: The developing mobile Internet makes consumers unlimited by both the location of banks and the business time of financial institutions. One can enjoy the financial services whenever and wherever possible under the coverage of mobile Internet as long as he/she holds such mobile terminal as smartphone. In the times of mobile Internet, smartphone has been an important port accessible to the banking network, and its importance is more and more greater among bank channels. Meanwhile, banks are less important among the original channels, especially among physical networks.

       In recent years, the physical outlets of commercial banks increased less rapidly. Some banks showed a negative increase. The business outlets of China Minsheng Bank increased by 166 in 2014 and by 80 in 2015; the outlets of China CITIC Bank (601998, guba.com.cn) increased by 143 and 137 respectively in 2014 and 2015. In 2015, the business outlets of Commercial Bank and Bank of China increased by 26 and 6 respectively. However, the business outlets of ICBC kept decreasing for successive 2 years. Compared with the adjustment of physical bank outlets, the decreasing trend of bank tellers was more obvious. According to the data published by China Banking Association, just 3 state-owned commercial banks showed the decrease in bank tellers in 2014, but many commercial banks cut tellers in 2015. Among the listed banks, a total of 5 banks cut tellers by 9,758 people, including Bank of China by 4,014, China Construction Bank by 4,881, China CITIC Bank by 537, Huaxia Bank (600015, guba.com.cn) by 35, and Industrial Bank (601166, guba.com.cn) by 291. Besides, postal savings bank of china cut its tellers by 2,538, and CGB by 131. The channel management and back-end support capacity still need to be improved. In the context of mobile Internet, user’s mobiles have been a new bank customer terminal. Consumers start to face the whole bank instead of original bank outlets, which influences the existing channel decentralized management system of banks. Since mobile finance allows consumers to make transactions whenever and wherever possible, the time and frequency of peak transactions are hard to predict, which requires a stronger bank-end support capacity of banking services.

      In the mobile financial status, the system pressure is increased at the peak of transactions, and even server breakdown and transaction failure occur, because banks cannot control the transaction flow. With mobile financial services, transactions are quicker and more frequent. However, consumers are less patient with the bank response speed. They hope banks can respond to the customer requests timely. For this reason, in the mobile financial environment, the back-end support system of bank is required to respond quickly to the transaction peaks and customer requests at any time. To this purpose, banks need upgrade their back-end support system and adapt it to the new environment by using such new technology as cloud computing. Also, the bank-customer relationship maintenance is required to be adapted to the socialization trend of mobile Internet. Customer requests are diversified and individualized. With the arising of such mobile social media as WeChat and weibo, consumers formed different social networks that have individualized demands. On the other hand, as the information propagation speeds up by means of the user’s one-key sharing, the mutual influence between social networks speeds up, too. To expand the mobile financial businesses, banks need fully understand and apply the community effect of mobile social network and estabilish and maintain a good customer relationship. Users care about the interaction with banks when using mobile financial services. They pay attention to the performance of general businesses and communicate with banks to get enough the information and professional advices they need in complicated business, including financing, cross border, credit, etc. They even communicate with the bank customer manager in an individualized and life-like way. This change requires banks to satisfy the customer demands in anytime interaction and to conduct the customer relationship management. It forces banks to improve the service process fundamentally. According to the incomplete statistics, financial institutions in banking reformed about 9,483 main business processes in 2015, and this datum is 9.14 times of that in 2014.

       Value of physical bank outlets in the mobile internet environment

        Due to the service space and time limitations, the customers and service time of high-cost physical bank outlets are not as much as other sales channels. What’s more, banks were blind in expanding outlets and the homogenization phenomenon was serious in the early stage. Thus, the bank outlets have a low business efficiency. While the mobile finance is developing constantly, physical bank outlets are most impacted. With the rapid promotion of traditional bank Internet business, a lot of bank financial services are not dealt with over counters anymore. According to the statistics of China Banking Association, the rate of business away from counter was 77.6% in 2015, 10 percents higher than that in 2014. It can reflect the “decrease in counter used” for bank businesses. Now, some people believe the physical bank outlets are out of date because of the strong propagation and connection capacity of Internet. Especially, the domestically first WeBank without business outlets was founded, which makes a great many people think that physical bank outlets will finally disappear in the times of mobile Internet.

           However, people’s recognition of new technologies and new equipment is incremental and unbalanced. For example, young peole and residents of big cities are happier to accept mobile finance due to the influence of age, educational background, and network construction. Middle-aged and elderly people and residents of small cities and towns prefer bank outlet services. For the sake of safety and experience, people’s behavior pattern will not change much in short term and their demand for direct-contact social communications is still large, although mobile Internet equipment has been more and more generalized. Therefore, relative to mobile terminals, physical bank outlets are irreplaceable and can satisfy customers’ demand for direct-contact consumption. Financial services are based on trust and their nature is person to person. Even if various kinds of devices can finish transactions such as settlement and transfer through self service, consumers still need face-to-face communication services. Financial services can be finished through human-computer interaction, but the most efficient communication is person-to-person communication. Through the direct communication with bank workers, consumers can put the visual, auditory, and tactile organs to good use; understand the financial service information more easily; and are more likely to have trust. Such direct communication can diversified customer demands. Since customer demands are increasingly diversified, the settlement, transfer, stock transaction, financing, housing loan products, wealth management, and other services offered by banks are diversified too. To popularize the standardized individual financial products, Internet has a great advantage. However, to popularize the professional complicated financial products, physical outlets are required. Different customer bases have their different demands. Taking credit card application for example, young people may apply for a credit card online, but elderly people may prefer to go to bank outlets. The same customer also has different requirements for multiple products. For example, a customer may go to outlets to consult or purchase housing credit products while trading stocks on Internet. Outlets can strengthen the customer stickiness. To strengthen the customer stickiness is a factor critical to improving the customer loyalty. It requires customer demands satisfied. Bank outlets are generally deep in regional markets and have abundant customer resources and safe and steady images brought by long-term management. Thus, they are more likely recognized by regional customers, which is an advantage over mobile terminals. Besides, regarding the competition for big customers, bank outlets can get the customer loyalty improved quickly by binding customers to certain products on regional markets and by strengthening the customer service stickiness through product interselling. Outlets satisfy the need of risk management. As required by monitoring, customers still need go to bank outlets to open accounts or to change cards, which means the first deposit account of a customer cannot be set up anywhere unless at a bank outlet. Thus, how to maintain the win-win cooperation with customers is very important for bank outlets. Bank outlets are set up on the basis of regional markets. And this can avoid that customers and product sales are too concentrated, so as to reduce the risks involved with bank business. Moreover, physical outlets can shape the steady business image of a bank and have an effect of stabilizing customers.

         Transformation and upgrading of physical bank outlets in the mobile internet environment

          Although physical bank outlets are still irreplaceable at present, their advantages are being reduced little by little for the following reasons: in the times of mobile Internet, changes in bank business environment and consumers’ consumption habits; rise in domestic labor cost and land cost; progression in Internet technology and popularization of mobile terminals. Thereby, physical bank outlets should get adapted to these external changes and expand the service scope by means of scientific and technological advance, so as to satisfy customer demands based on professional advantages.

Bank outlets need adjust their orientation. In recent years, China has been promoting the transformation of bank outlets. Now, this transformation is in the 3.0 age: In the first age, bank outlets upgraded the hardware; in the second age, bank outlets enhanced and transformed the sales skills. Through these two ages, these bank outlets enhanced the service quality effectively and transformed employees’ sales philosophy. However, outlets are still oriented to traditional transaction type “Centered on products; offer indifferent services”. This orientation is not good for enhancing the overall business efficiency of outlets. It is required to accelerate the transformation of outlets into market service type outlets “that can maintain the middle-end and high-end customers; are capable to sell focal products; and emphasize the business efficiency”. Different from traditional business processing center that emphasizes bank outlets, modern bank outlets care more about the enhancement in “power of marketing” and emphasize business diversion. They spare the precious human resources as many as possible to expand the marketing team. They enhance the marketing service ability and booster the transformation from transaction settlement type to marketing service type by completing the assessment system, developing corresponding products, and strengthening customer caring. The outlets after transformation are an important channel for banks to enhance the customer satisfaction and to increase the sales volume because they not only have the functions of retailer banks but also can booster the thorough development of assets, liabilities, and intermediary businesses.

Bank outlets need optimize the distribution and internal settings. To optimize the regional distribution, they need carefully consider the microscopic factors such as local economic environment, population size, income level, and development potential and the concrete factors such as staged development planning, customer structure, consumption habit, industrial competition, traffic, cost, and future potential customer bases. They need also bring stock outlets back into active use and strengthen adjustment and optimization. To optimize the internal settings, they need follow these principles: 1. Centered on customer demands; adjust and optimize the functional area settings; add an open-type service area; cut the closed service area; add an open-type teller-customer experience area for private discussion and conversations. 2. Emphasize the construction of product marketing and exhibition area; add the demonstration of product services. 3. Add necessary auxiliary spaces (such as children game zone and coffee zone). Besides, bank outlets need improve the management system and operation mechanism. Bank outlets transformation need be supported by the reform of bank management system. At present, most banks still adopt the four-level management system “head office, branch, sub-branch, and outlet”. The transformation is trapped in a bottleneck and hard to advance, because of the slow transformation of management pattern of superior institutions and the lack of actions related to required operation support, human resources structural adjustment, performance assessment system, etc.

         Thus, bank outlets can use the traditional architecture “head office, branch, sub-branch, and outlet” of internal hierarchies to break through the organization rigidity and to improve the organization flexibility. They can organize a project team to take charge of the whole-course planning, whole-course management, whole-course coordination, communication cost cutting, management efficiency enhancing for the project, according to the project task and objective. In terms of human resources allocation, they can allocate the human resources to high-input and high-output posts to ensure a high efficiency. They can satisfy the overall transformation requirements for functional integration and services by enhancing the employees’ capacity and the customer manager’s and tellers’ comprehensive capacity. They can complete the assessment system and prepare the assessment methods for customer manager, teller, hall manager, and other posts to motivate related employees. They can apply big data and cloud computing technologies to data digging and smart marketing, information construction, and promoting the marketing management and customer service levels.