Retail banks currently spend 50-70% of costs on outdated distribution models like physical branches. The document discusses how adopting an "agile" approach to distribution and marketing can help banks reduce costs and better serve customers. Key aspects of an agile approach include rapidly testing and adjusting distribution channels, products, and segments based on real-time customer data and demand. This allows banks to be more responsive to the market and focus on revenue generation over fixed costs of traditional branches. The document provides examples of how agile distribution may involve pop-up stores, self-service kiosks, or modular banking products tailored for specific customer needs.

1. #TheAgileBank
THE AGILE BANK SERIES
Pop-Ups, Pods,
Scrums and Sprints
The New World of Agile Distribution
and Marketing in Retail Banking

2. According to Accenture
analysis, retail banks spend
50 to 70 percent of their cost
base on outmoded distribution
models that cannot give them
the competitive edge in the
digital banking landscape.
With agile distribution and
marketing, banks can react
fast to market demand—
reducing fixed costs within the
distribution network, growing
market share and providing
superior customer experiences.
50-70%of cost base spent on
outmoded distribution
2 ACCENTURE AGILE BANK SERIES

3. New Era,
New Rules
Distribution and marketing strategies
correlate branch share and market share.
Banks have invested heavily in the branch
network—the industry’s crown jewel—to
generate business. Nirvana has long been
to reach a saturation point where market
share increases at a greater rate than
branch share. The goal was always to
improve the number of branches necessary
to help drive growth.
But that was then, and this is now.
Disruptive market forces are changing the
role of the branch, and with it, blurring
the direct line between branch share and
market share. These forces make “branches-
as-we-know-them” less of an asset than
ever. They also make it difficult for banks
to evaluate demand flowing to the branch
network—even as they make significant
capital investments to maintain and
expand it.
Digital banking is an unprecedented force
of change. Customers bank as they choose—
at the branch, online, on their tablets or
smartphones, and through emerging digital
channels. They also select from among
innovative financial services and products—
everything from payments to loans to
investments—from nimble, customer-
centered fintechs that lack the constraints
and costs of a large physical footprint.
Even with this much choice, customers
will not abandon the branch. According to
Accenture’s 2015 North America Digital
Banking Survey, 66 percent of North
American consumers plan to use the branch
in 2020 as often as or more than they do
today.1
Many will seek out the branch over
other channels when they want one-on-
one attention for account or service related
advice and issue resolution.
The bank branch is not irrelevant, but it
must be different. The trick for banks is to
synchronize branch distribution capacity to
meet demand in each market while balancing
operational costs. This is not solely about
closing bank branches. It is about
improvement and re-invention. But how?
Copyright © 2015 Accenture. All rights reserved.
The Agile
Advantage
Banks can debunk conventional distribution
and marketing wisdom and help grow
market share through other means than
branch network expansion. This is at the
heart of the agile model.
Agile distribution flips traditional
distribution and marketing on its head.
Today’s model has an inside-out, bank-
focused orientation. As a result, products,
segments, communication and channels
are static and predictable. Agile models
are worlds apart—highly nuanced and
built on a fluid, outside-in strategy.
They are hyper focused on the customer
perspective. Distinct markets help drive
product features, micro-segments, tailored
communication and a blend of digital and
physical touch points. The market helps
drive changes, and they happen fast and
often (Figure 1).
FIGURE 1: Retail banking distribution must evolve from today’s linear bank focus to tomorrow’s dynamic market focus.
TODAY
Products Segments
Communication Channels
Market 1 Market 2 Market 3
TOMORROW
5 Characteristics of Agile Distribution
• Fast twitch
• Test, learn, tweak
• Right channeling
• Customer first
• Revenue ready
Products
features
Micro-
Segments
Tailored
Communication
Digital-Physical
Touchpoints
Market 1
Products
features
Micro-
Segments
Tailored
Communication
Digital-Physical
Touchpoints
Market 2
Products
features
Micro-
Segments
Tailored
Communication
Digital-Physical
Touchpoints
Market 3
Pop-Ups, Pods, Scrums and Sprints 3

4. In essence, being agile in retail bank
distribution means:
• Fast twitch. Dynamically expanding
and contracting the distribution model
in response to a granular understanding
of market demand, making channel
decisions quickly and frequently.
• Test, learn, tweak. Replacing complex
and time-consuming distribution
processes with quick wins based on near-
term forecasted demand and continually
adjusting offerings as the market dictates.
• Right channeling. Developing a new
intelligent distribution engine—a flexible
infrastructure that creatively combines
the digital and physical to help grow
market share without traditional branches.
• Customer first. Creating products and
services that deliver hyper-personalized
customer experiences to specific
segments, offering customers “what they
need” not “what the bank has.”
• Revenue ready. Improving distribution
costs by transforming fixed costs into
variable costs and investing savings in
revenue generation opportunities.
While agile distribution is not widespread
in banking, it is not new. It began as an
iterative software development method
rooted in continuous feedback and
adjustment to speed time to market.
Manufacturers co-opted its adaptive
philosophy, as have customer-facing
industries like retail. Boxpark, a pop-up
mall in London, is one example. A creative
alternative to a traditional bricks-and-
mortar mall where stores lease space for
long periods of time, Boxpark is a collection
of temporary stores housed in recycled
shipping containers. Stores come and go to
keep things fresh for shoppers.2
A Foundation
for Change
While retail banks are playing catch up in
becoming agile, they are in an excellent
position to make the transition because
they already have three elements, which
consist of:
1. Digital and physical. Unlike digital-
only competitors, traditional banks combine
the digital and physical. That’s why digital
giant Amazon.com, Inc. is known for its
physical distribution too. Italy’s CheBanca!
S.p.A. understands such dual strength. Even
in a country with a high branch density
ratio, this digital bank recognized a role
for branches to help build trust, brand
awareness and provide self-service and
advisor-directed options. After selectively
identifying branch locations and formats to
capture demand, CheBanca! has launched
50 branches to date.3
2. Analytics insight. Banks have access
to a wealth of customer data, which fuels
agile distribution. With the right customer
data, banks can create and test real-world
scenarios to define markets, product
format and customer micro-clusters. The
challenge is that many banks are paralyzed
by too much data and must focus less on
producing data and more on consuming it.
3. Innovation jumpstart. Banks often look
outside industry boundaries to innovate.
Some tap into ready-made distribution
networks through partnerships—like bank
branches in grocery stores or banking
services in European post offices. An
affinity for collaboration positions banks
to evolve by purchasing start-ups or
white-label capabilities to integrate into
the value chain.
The Traditional
Transformed
With these building blocks, banks can
develop an agile strategy by defining
markets, segmenting customers, improving
channels and developing products very
differently.
Agile banks assess customers across all
channels to define very targeted markets.
They divide markets into components based
on common characteristics using internal
and external data and nontraditional
methods, such as insights from digital
transactions, social media, geolocation
and account opening patterns. This is
highly granular customer segmentation—
like trading binoculars for a microscope.
Working with narrow customer clusters,
agile banks forecast demand with advanced
analytics and continually refine approaches
by testing and retesting their own
assumptions as market demand evolves.
Agile banks also redefine expected
assumptions about banking channels.
Both physical and digital touch points
help drive decision making on channel
selection—data analysis defines where
customers are most likely to bank.
Distribution managers must constantly
weigh all of their options when assessing
and responding to market demand.
4 ACCENTURE AGILE BANK SERIES

5. Agile Imagined:
When a Branch is
Not a Branch
Imagine that a bank has five full service bank branches in a
college town in the southeastern United States. An analysis
of sales patterns revealed that the two branches closest to
campus had the highest number of new account openings,
which spiked at the beginning and end of the school year.
The bank opened a pop-up store in August, offering a basic
checking account at special rates. Students could choose
from among add-on features. They could also download a
special expense tracking app with campus-based geolocation
features. The pop-up store reopened in May offering special
advisory services for recent graduates.
The bank ultimately closed two of its branches and worked
with the university to place self-service kiosks in the student
union and near the dormitories.
BANK$
Pop-Ups, Pods, Scrums and Sprints 5

6. As physical and digital channels blur, the
agile bank “branch” defies any textbook
definition. Maybe it is a traditional full
service branch. It could be an open concept
store with activity zones such as an ATM,
touchscreen walls, teller pods or self-
service stations. It might be a self-service
kiosk on a busy street corner or a digital
selling pod in a subway station. It could be
a pop-up branch on a college campus that
will close after the first month of classes.
Purely digital channels look different too.
Instead of public (brand) and private (home
banking) sites, agile banks create niche
digital channels such as micro-acquisition
landing pages or geolocation-based apps
for customer segments in target markets.
When it comes to the products available
to customers through these channels, agile
banks offer a modular, features-driven mix.
Customers build “just-for-me” instead of
buy “one-size-fits-all.” Barclays Bank PLC
serves customers this way today through
its Barclays Features Store. Customers
log in to their accounts to add feature
packs—such as technology, travel or home
protection—based on their needs.4
Agile in Action
Being agile means working agile. To do
this, banks must introduce agile practices
into the distribution decision process.
These practices allow distribution managers
to make on-the-fly decisions through
the use of data and analytics. It is about
continually asking and re-asking simple,
but essential questions:
• Which markets?
• Which segments?
• How do we change channels?
• What products do we offer?
Distribution agility means not always
having all the information to make
decisions. Agile banks work from available
resources, never getting stuck in the race
for perfection. They practice “minimum
viable distribution.” They release a product
to a high-priority market quickly, rather
than after months of analysis. Dynamic
market forces and customer feedback
loops shape the product, guiding whether
development teams scale it, start over or
scrap the concept altogether. At its core,
agile distribution is about having the risk
tolerance to fail fast sometimes.
Agile distribution teams work by borrowing
from agile software development methods.
They use scrums to “put their heads
together” to track market demand, plan
immediate actions using existing resources,
and brainstorm roadblocks. Agile distribution
also depends on sprints, accelerated and
iterative product development cycles.
Moving quickly is a competitive advantage
to banks that can implement agile tools
like these successfully.
A Continuing
Evolution
Retail banking has evolved dramatically
in the digital age—and distribution
and marketing must too. Moving from
antiquated to agile demands big changes
to the very core of distribution and
marketing—from the branch network and
digital channels through people, processes
and enterprise technologies. By thinking
big, starting small and scaling fast, agile
banks can reduce fixed costs, grow revenue
and serve customers in exciting new ways.
6 ACCENTURE AGILE BANK SERIES

7. Accenture Agile Bank Series
The series introduces agile banking concepts, explores the
building blocks for getting started, and provides insights
into how retail banks can strategically rethink all the
elements of distribution and marketing to address the
demands of the digital age.
To find out more, visit:
www.accenture.com/theagilebank
FAST
TWITCH
CUSTOMER
FIRST
TEST,
LEARN,
TWEAK
REVENUE
READY
RIGHT
CHANNELING
Pop-Ups, Pods, Scrums and Sprints 7

8. Notes
1
Accenture, Banking Shaped by the Customer,
2015, https://www.accenture.com/us-en/
insight-consumer-banking-survey.aspx.
2
Foolproof, Innovating for Agile Retail:
The Drum Live, July 19, 2013,
http://www.foolproof.co.uk/thinking/
innovating-for-agile-retail-the-drum-live/,
accessed June 6, 2015.
3
Chris Skinner, Why Would a Digital Bank
Have Branches? (CheBanca! Case Study),
May 27, 2015, http://thefinanser.co.uk/
fsclub/2015/05/why-would-a-digital-bank-
have-branches-chebanca-case-study.html,
accessed June 6, 2015.
4
Barclays website, http://www.barclays.
co.uk/FeaturesStore/BarclaysFeaturesStore/
P1242627664183, accessed June 6, 2015.
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Christine Duque
Financial Services
Accenture Distribution & Marketing Services
christine.duque@accenture.com
Marco Magnini
North America Banking
Accenture Distribution & Marketing Services
marco.magnini@accenture.com
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