Nationwide breaks norm and opens branch because of technology

Nationwide Building Society is opening a bank branch in the Somerset town of Glastonbury, which lost its last branch in April when Lloyds Bank pulled out as part of its branch closure strategy.

High-street retail banks such as Lloyds and the Royal Bank of Scotland have closed hundreds of branches and shed many jobs as the volume of services conducted through digital channels increases.

But next summer, Nationwide will open a branch in Glastonbury, a town of 9,000 people, that will bring technology to customers. About 1,000 local residents said they would open an account with the building society if it opened a branch.

“We believe there is still a role for the branch on the high street by offering people the choice of managing their money using the latest technology in-branch together with the personal service so many value in a digital age,” said the Nationwide in a statement. “This pilot, if successful, will enable Nationwide to test the viability of whether it can use its investment in technology to bring financial services to communities left without a bank.”

The building society will test technology such as Nationwide NOW with its customers. This uses high-definition video links to connect customers in-branch with Nationwide financial consultants around the country. The facility allows customers to complete mortgage applications and attend financial planning appointments at a time that suits them.

The advisers offer the same beginning-to-end, fully compliant mortgage service that is available in-branch. The high-definition video link and shared screen system provide an interactive display and there is a printer for paperwork. It is also creating 200 jobs across the country.

Plummeting connectivity costs has made video a genuine business tool. Years ago, providing such a service on Skype would have cost thousands of pounds, but today it is on everyone’s desktop and is practically free.

Nationwide chief executive Joe Garner said: “Our investment in Nationwide NOW, combined with personal service, is what allows us to explore this in a sustainable way. The people of Glastonbury have been crying out for a bank, and we can offer them something different – a building society.”

UK citizens use a mix of channels to interact with their banks and make transactions, according to recent Forrester research. It found that 28% use mobile banking, with 73% banking online this year, compared with 69% in 2015.

In recent years, Nationwide has become a leader in terms of adopting modern technology to transform its operations and customer interactions.

In 2008, the company embarked on a £1bn project to transform its technology after years of underinvestment, typical in the financial services sector. The project involved upgrading its datacentre, outsourcing IT for the first time and implementing Microsoft technology in the front office and SAP at the back.

Nationwide has since increased its adoption of digital technology. For example, it claimed to be the first high-street finance firm to offer an Apple Watch app and in September last year it announced it was using artificial intelligence technology from Tata Consultancy Services to reduce the complexity of back-end systems as it introduced more digital products.