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It Seems Clicks Have Not Replaced Bricks, but the Bricks Have Changed!

POV 11.13.2009

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Banking customers today have more channels to use for their banking needs than ever before. ATMs, computers, and cell phones—technology advancements continue to add channels and functionality. In August, USAA announced an application that allows customers to make a check deposit by taking a picture with their iPhones® and wirelessly sending the check image to their banks. Back in the 1980s, Bill Gates said the personal computer of the future would not be used primarily for computing, but for communication. Done any computing on your PC lately?  Now it seems using cell phones for conversation is quickly becoming secondary as the functionality of smart phones is advancing. And mobile banking is predicted to become a major banking delivery channel as it grows to support most of a customer’s banking needs.

But for all of these “clicks,” we have not replaced the bricks. The bank branch remains a prime banking delivery channel, and the best opportunity to cross-sell products and services, build customer loyalty and strengthen overall relationships.  And the branch of the future will adapt to changes in the retail delivery model, morphing into a highly efficient, cost-effective channel that speaks directly to customers’ needs.

For example, branches will evolve from a less “traditional” model that had the teller line on one side of the building and the “platform” on the other side, with a check-writer or two in the middle and maybe a plasma screen displaying the news or a marketing message. Instead, think kiosk banking, designed to promote customer interaction by removing barriers and distractions—private offices and desks will be reduced or eliminated.  Customers and staff stand side-by-side at computer workstations for basic transactions, or an associate services the customer using a wireless PC.

In-branch signage will become more interactive versus dynamic. With the future of Radio Frequency Identification (RFID), a chip imbedded in the bank card will allow for immediate customer recognition by a bank employee, or a customized marketing message on the display screen.

With technology advancements and the traffic demand declining in branches, the size requirements of a branch will shrink. Some branches may be best suited to serve the market needs as a self-service, heavily electronic “express” branch. Limited numbers of personnel will be available to assist customers and facilitate their service needs.

So what can you do today? Recognize the role of the branch is changing and look for opportunities to improve the customer’s experience and strengthen relationships. Even without the latest and greatest technological advancements, you can maximize what you have already invested in, and understand where your “moments of truth” lie within your branch and your customer’s experiences.

  1. Leverage existing technology and integrate systems.
    Innovate to benefit the customer’s experience and enhance the customer experience, not just for the sake of getting the latest and greatest technology. For example, bankers have a limited window of time when the customer is seated at a desk—this is precious time and needs to be used well.  So don’t ask the customer for the same information more than once. When opening a new account, how many times should a customer have to provide his address? Answer: one time! Too often banks still have not integrated applications, so when a customer wants a new checking account, debit card and Internet banking—all services we want the customer to use—the customer has to complete an application for each product or service. This is crazy. Utilize technology to document customer conversations and important sound bites. Allow all customer touch points, such as the Call Center, access to the information. You will look so smart!

    Further, look at your branch operations. Can you automate or eliminate?  Tasks that can be automated but are still being done manually are a major drag on productivity.  For those processes that directly affect customers, look at them through the lens of the customer: Are we needlessly asking the customer to jump through hoops?  And if the task has been automated, but the personnel are more comfortable doing it manually, to take a quote from Nancy Reagan, “Just say NO!” to this nonsense. Keep your branch employees facing and seeing customers.
  2. Ensure your customer-facing employees are knowledgeable about all of the bank’s delivery channels and are users of the bank’s services—eat your own cookin’!
    Knowledge is more important than sales skills.  Walk into an Apple store and ask a dedicated specialist about the iPhone.  The employee will know everything about the product: what it does, what it does not do, and most importantly, they personally will be using the product.  There are no questions they can’t answer. Are you comfortable your branch employees really understand the products and services they are asked to sell?

    Several years ago when Internet banking was just being introduced, I was in a branch of a national bank (to remain nameless). The branch had banners, counter cards, and signs throughout, all promoting its new Internet banking platform. Standing in line, I overheard the customer at the teller window ask if Internet banking was safe. The teller replied, “I don’t know. I really don’t know much about it.” And then the kiss of death: “I don’t use it.”  The customer responded by saying, “I guess it’s probably not a good idea.”

    A considerable amount of money had been invested in a campaign to promote Internet banking use, but a crucial key to success—employee training—was not executed. Bankers must train the branch personnel, not just deploy the technology. Further, employees must be encouraged, and possibly even required, to use the delivery channels themselves so they can effectively speak to customers about the features, functionality and benefits, and deal with any issues that may arise.

    New evidence shows customers who use multiple channels are more likely to stay with the bank. Customers as satisfied with the experience, ease of use and functionality provided by a second channel as they are with the branch will more likely stay with the bank. Key to this success is having knowledgeable front-line employees who can talk about and sell the idea of non-branch service channels.
  3. Eye future technology enhancements with a clear deployment strategy.
    If you are deploying new technology and delivery channels such as mobile banking as a defensive posture, just to check it off the list and be able to say, “Yeah, we have that,” you’re missing a great opportunity. Determine the strategy around a given delivery channel: How does it integrate with the current channels? How do we differentiate ourselves? How do we benefit from the investment?  Using e-statements as an example, do you have a clearly defined strategy to increase customer adoption of e-statements?  If you don’t, you should. Traditional statements cost on average $1 to produce and mail— how many things can you do today to reduce your costs by $12 a year for every checking account?  As you implement new products and services, first determine your strategy, ensure someone in your organization owns the service, and then deploy it with purpose, not just for the sake of saying, “Yeah, we have that.”  What is your plan for maximizing customer adoption of the new technology, and how will you market it to existing customers?
  4. Assess the opportunity to move to a universal branch staff position, using fewer employees who are more skilled.
    We all know the transaction volumes of branches have been trending downward for many years, requiring less physical space. This typically means we can staff our branches with fewer employees, but it also means the skill level of the employee needs to change. Fewer employees means we need cross-trained, highly knowledgeable employees who are able to support multiple customer service needs.  As a result, service and sales will improve when these “universal” branch employees can hear and understand the needs of the customer and offer them the best solution.

    In the old model, we always talked about tellers, customer service representatives and loan officers as separate positions. With technology and operations the way they are today, one person should be able to provide the services of all three.  Some may say training is expensive, but higher costs for staff training, performance incentives and technology investments can be offset through leveraging skill sets to reduce the number of staff required for any given branch.

  5. Take advantage of every customer interaction to build and deepen your relationship—listen to your customer.
    You don’t build relationships online. Talk to the customers, get to know them and most importantly, listen to their needs. When a customer inquires about a product or service, don’t subject them to a 20-minute “profile” session that, from the customer perspective, has nothing to do with why they came into the bank and may offend some customers by asking for too much personal information. Instead, make the sales process meaningful, make it personal and make it real.

All in all, banks need to react to the changing role the branch plays in our multi-channel retail banking environment. Customers still want to go into a branch. They go to resolve problems they can’t resolve elsewhere, and the majority of product and service sales still occur in the branch. Branch staffs are often called upon to deal with customer issues related to one of the other delivery channels—meaning branch staff must have a solid understanding of all the bank’s delivery channels. Branches are expensive and getting less profitable, making it crucial to seize each opportunity to serve the customer, build relationships, and maximize the value of every branch visit.