Skip to Navigation Skip to Main Content Skip to Footer

The Universal Banker the Real Gold in the Branch

What Would Motivate Consumers to Bypass the Most Convenient Branch in the World?

Think back 11 years ago. It is the Summer of 2007 and only a select few are forecasting the fall of the financial industry. Maybe even less see that a Senator from Illinois will be our new President in 18 months. And no one knows how Steve Jobs’ brand-new invention, the iPhone, will change the world. The iPhone revolutionized consumer expectation for convenience and experience. This is especially true in banking. As the financial industry recovered from the recession, consumers had been taught that the most convenient branch in the world lives in their back pocket.

The advent of digital convenience created omni-channel banking, the triune relationship between delivery channels:

Physical Branches, Cash Automation and Virtual Branches.

omni-channel

What do consumers want?

In a handful of years, consumers in one voice had communicated we want multiple channels. Few consumers held on to a single-channel approach to banking; preferring multiple ways to communicate with their financial institution of choice. And by 2017, consumers had said we prefer digital channels (website plus mobile) over the physical branch for day-to-day transactions. 

It’s remarkable that in less than a decade from the iPhone launch date, consumers had been reprogrammed

to understand the unique value of a digital branch.

What is so great about a digital branch?

This view (the convenience of a digital branch) is also shared by financial institutions. Thanks to some research from Bain & Co. we can quantify the real value of a mobile banking consumer. The average mobile transaction costs a bank or credit union about $0.10 for each interaction. The average teller transaction (visiting a branch or calling a person) costs at least $4. Therefore, there is tangible value in mobile banking that is unmatched by physical branches, especially for transactions.

What is so great about the branch?

However, consumers still visit branches on a regular basis. Study after study shows that over 50% of all consumers visit branches on a monthly basis, and 60% of consumers visit branches twice year. What’s more, millennials are the most likely demographic to visit branches every month.

 

Bringing the channels together…

So, what’s really going on? A 2018 report by Foresee brings many of the pieces together. In their study, they found that 60% of all bank and credit union new-account journeys start online. (About 35% of consumers go straight to the branch.) Probably not too shocking to hear that people shop online? What is shocking is that over 70% of all consumers end up in a branch during their journey.

The Real Gold in the Branch

Therefore, there must be something intrinsically valuable to a consumer that they would bypass the most convenient branch in the world to visit one further away than their elbow, back pocket, or purse. The ongoing dance by consumers between digital and physical branches explains why physical branches continue to transform at a rapid pace. Consumers use the branch for something they cannot get over a device – a face-to-face personal interaction. Open environments, cash automation, pods, branding, point-of-purchase imagery, and transformative experiences are in place in today’s branch to leverage the high-value opportunity of a face-to-face interaction with consumers.

In 10 years from now will we have fewer branches? Yes. Over the next decade will the branch continue to change? Yes. Will the need for a human experience diminish? No. Because the real gold in today’s branch isn’t in the vault, it is you and your team. We call this the Universal Banker.

Since everything in today’s physical branch is about optimizing the face-to-face interaction with the consumer, then we need a guide to walk us through the process.

How about a three-legged stool?

Click Here

Micro Branches | The Next Big Idea?

Enhancing your branch strategy with the most flexible of solutions – the micro branch.

Branch density is the goal. Space to build is the challenge. What makes a financial institution’s branching strategy successful? Many experts point to density “more locations and brand”.  Agreed! However, what if the target community doesn’t have any suitably sized site options within the desired market? Or, what if there is not a lease space available in this market?

Are more branches an opportunity? Or a  risk?

This begs a follow-up question: What about branch network density? Should a financial institution continue to invest in branch density given the advent of new technologies that may lead to a decreasing need for branches? On the other hand, what if digital and mobile channels, video tellers, and smart cash equipment don’t decrease the number of branches, but rather enhance the capability of the branch to better serve consumers? Is it possible the micro branch can be a solution for these facility questions?

What is a micro branch?

Essentially, It can be whatever you  dream up! As long as it has a small footprint, is heavily branded and uses smart technology. For instance, it can be a shipping container converted into a permanent freestanding branch (see image above), equipped with an ATM and a universal banker office. Or it could be a 1,000 to 1,500 square foot freestanding branch equipped with video tellers, assisted self-service or ATMs and staffed with a few universal bankers.

[metaslider id=6389]

All kinds of possibility.

These imaginative facilities can contribute to branch density through a downsized, refined package while still offering similar services as larger branches. We have the technology; let’s use it!

The micro branching movement is putting the spotlight on a new way of thinking about service facilities…here’s how:

  1. Speed to market – Micro branches provide financial institutions the opportunity to enter the market quicker because design and construction durations are much shorter.
  2. Cost does matter – Because of the reduced branch size, these facilities require  less  real  estate, and the cost to build and maintain is lower compared to a more conventional cornerstone (hub office) or community branch.
  3. Staffing – Micro branches typically have a reduced staff. The staff is focused on high-value customer interactions – while technology handles the more mundane transactional components.
  4. Resiliency – Micro branches provide agility in decision making for financial institutions  needing  to  quickly  adapt  to the market. For example, a container facility can be converted to a cashless ­location, or due to a shift in market dynamics, the micro branch can be converted to a loan or mortgage facility.
  5. Dream big with less – Micro branches give financial institutions the opportunity to venture into markets that previously were not considered a possibility due to lack of site options. For example, in a dense retail area, where room is snug and will not accommodate a community size branch, a permanent container facility or small pre­fabricated facility may be a quicker and more effective solution for the market.
  6. Deliver the deliverables – Micro branches are outfitted to deliver the intended service solutions for targeted communities. In fact, these facilities give greater flexibility for branch density strategies by providing the financial institution greater access for entry into specific markets of  interest.
  7. It’s on the menu – Micro branches can have full-service capabilities such as cash handling technology (ATMs or ITMs), and even drive up lanes. Furthermore, micro branches can be constructed “your way” with the same high-quality construction, and architectural brand identity, as seen with a traditional facility.

Customized for the community. The beauty of the micro branch, besides its lower cost, is that it can meet the desired financial needs of a community, creating better opportunity for consumer loyalty and satisfaction. As is the case with all branches, micro facilities are targeted for specific market and community conditions. And, having the ability to enhance the product and service offerings to a community while contributing to branch density. The micro branch is an option that gives financial institutions greater flexibility to enrich its intended branching goals and improve its presence in communities once thought to be out of  reach!

The micro branch reduces the risk of branch density and rewards institutions willing to explore the possibilities.

The relevancy of branches for an FI is something to greatly consider. Maybe this article will help.

Click Here




Building Relationships: the Heartbeat of the Universal Banker

Technology hasn’t just required an upgrade in equipment, but a shift in employee skill sets.

As American as apple pie. Community based financial institutions (FI’s) are the heart and soul of America. These locally­ owned and operated institutions are woven into the fabric of the communities we live in, work in, raise our families and build our lives. That building involves our careers, our hobbies and our futures. That future in large part depends on…money, investment and risk.

The saying “It takes money to make money” is still…right on the money. Most of us are not born with the equity we need to see our hopes and dreams come true. We need money to finance our education, our houses, cars and businesses. We need equipment, tools, facilities and employees to make our lives work. The local community bank and credit union steps in to make all of this possible.   It is the reason they were created, and they fuel the economy and future.

In order to serve, first we must adapt. In today’s changing consumer environment, where omni­-channel delivery is the norm, community banks and credit unions are also challenged with delivering services in a way that deepens their wallet share, household penetration and margins…so they can continue to fuel the American  spirit.

The old way worked. In years past, that service was almost universally delivered the same way. A customer interacted with a “banker” in a branch across three feet of mahogany. Most interactions were transactional in purpose…check cashing, payments and order filling. The world had fewer channels for consumers to access financial resources and the delivery model…worked. No, it worked great!

Automation is Everything!

Automation is Everything!

 

Times have changed. However, today we have smart phones, the Internet, and global mobilization thanks to technology. Routine components of all things financial are now automated. Checking balances, moving money, making payments and even loan applications are handled via smart phones, tablets, laptops, drive thru’s, and ATMs. Therefore, the purpose of the physical channel i.e. the branch has changed and with it the identity of the banker.

Change didn’t happen overnight. But it still came fast. A 2014 study by Ernst & Young sheds tremendous light on what is happening, and what FI’s have done to adapt. The graph below shows consumer channel preference by banking task. The study found the more routine and automated the task, the more likely the consumer is to choose a “non­human” interfacing channel. However, the  more complex the interaction, the more likely the consumer prefers a physical channel…especially when it comes to sales.

Consumer Channel Preference

New skill sets emerged. Over the last decade, FI’s have been moving toward a different branch delivery model based on these preferences by consumers, so they can continue to deepen wallet   share, reach more households, businesses and boost margins. What was born are Universal Bankers who do so much more than the routine…they now educate, advise, and teach consumers as they discuss products, introduce experts and create deeper relationships with their customer or member in the process. In fact, NCR estimates Universal Bankers can handle up to 95% of customer requests; the remaining 5% are referred to subject matter experts.

From “doer” to “partner”. The deepening of relationships with the customer is the key. Consumers today are becoming so much better at research and analysis, but they need help making decisions and choosing a partner. So, they’ll ask a friend or a thought leader, and then go and meet the people others also trust.

How to grow your people. FIs can strengthen these interactions and introductions by following these steps as they develop their own Universal Bankers:

  1. Hire people who like people and are engaging. Customer engagement is a culture shift that moves away from transactions and toward conversations.
  2. Train the banker to ask questions. Educate the consumer before offering solutions. The Banker’s job is to listen first, and then speak from his/her wealth of knowledge or bring in experts…when needed.
  3. Invest in tools that automate routine activities and create margin for the banker to invest time with their customers. Scheduling tools, staffing models, cash handling equipment, ATMs, and   or Interactive Teller Machines (ITMs) are examples of such investments.
  4. Remove the barriers to the customer. Often this involves eliminating fixtures that separate the customer from the banker, but it doesn’t have to be radical. The key is the facilitation of the desired experience.
  5. Promote the bank or credit union’s brand in the physical environment. Stay away from artwork and use flat screens and marketing materials to communicate your unique brand message. Promote your value proposition so the community and customer know what you are about.

Why move in this direction? The answer…ROI.

Banks and credit unions that embrace this model often see dramatic results. According to FDIC reports, a community bank in the Southwest organically grew its assets from $1.0 billion to $3.5 billion in five years with this engagement model. Furthermore, NCUA loan and asset data prove a credit union in Tennessee grew its loan portfolio by 50% in four years and another in the Carolinas grew its book of business by over $100 million in a similar period. These are real results, from real financial institutions who have embraced the Universal Banker model ­- engaging customers in a new way…and there are more.

Investment in people and creating an environment that fosters engagement can change cultures. And, that culture is about building relationships…the heartbeat of the Universal Banker.

The Universal Banker delivers a world of knowledge in a very personalized way.

Today’s branch is moving at a rapid pace as well as its relevance. How has it changed? Read more below.


Click Here




The Changing World of Call Centers

“One-And-Done” is the new expectation.

Re-thinking everything. In today’s multichannel, no omni-channel world, the call center is in the midst of a transformation.  The transformation is comprehensive and involves rethinking performance metrics, staffing issues, and work space. In the area of performance metrics, financial institutions (FIs) are recalibrating to better align in a omni-channel world.  No longer can institutions look at just average talk time, abandonment rates, and after-call processing.  The call center agent is now responding to customers through several channels – telephone, social media, instant messaging, and live Web chats…to name a few.

Agents are now the FI’s ambassador, information officer, and mediator.  A key performance metric that has evolved in call centers is “one and done” as described by Jennifer Fox, SVP Customer Care & Operation Manager for Associated Bank in Green Bay, Wisconsin.  This philosophy empowers the agent to resolve a customer’s issue in one call.  This philosophy lends itself well to the new instant-gratification generation of customers who are reaching out to the FI as part of their busy schedule.

Higher expectations. As this example illustrates, the traditional metrics for the call center must be revisited. Customer expectations in our omni-channel world have changed.  Further, the call center employee must be “smarter” than ever.  Their knowledge base and training must allow them to meet the customer’s expectations of a “one and done” experience.

The emergence of ITMs. Organizationally, call centers are being transformed by the introduction of Interactive Teller Machines (ITMs) as a service distribution channel.  ITMs bring the dynamics of retail transactions, once isolated to retail branches, into the call center.  The ITM requires both visual and audio communication with the customer, amplifying the emphasis on personal service.  This dynamic requires financial institutions to rethink the hiring, training, and staffing models for the call center.

They’re not just agents. They’re your new brand ambassadors. Today’s agent needs to be comfortable conducting video sessions, and maintaining eye contact with the customer.   For FIs with geographically diverse networks, agents must be able to relate to the various needs of their customers. This includes the diversity of products that may be associated with various regions and demographies.  In most cases, agents need to be empowered to resolve the customer’s issues in keeping with “one and done”. Beyond the staffing issues, the physical environment also needs to be addressed.  Agents for the ITMs need to be isolated within the call center space to eliminate background noise, including visual background activity.

Design should be people-first. Because ITMs often operate during non-traditional hours, the space needs to include access to the restrooms, break rooms, and points of ingress/egress without violating other security zones in the facility (like the branch).  The non-traditional hours also require safety considerations regarding ingress/egress into the facility.   These are important steps when designing a new facility to house a call center and doubly important when retrofitting a call center in an existing space.

An investment that can pay off. Great results can be achieved by providing ITM agents with the resources and space required to meet customer needs and serve their clients while keeping with the “one and done” attitude.  One Southeast FI embraced the omni-channel approach and weaved it’s online banking, ITMs, and call center into a cohesive strategy. Over a three-year period, its revised approach generated 1,400 new accounts and $140 million in new deposits.

Three Legged Milking Stool

The stool of success. So in pulling all this together, the three-legged stool of the Call Center in an omni-channel world includes:

  1. Smarter Support: Agents must have at their fingertips a knowledge base that provides them the ability to deal with the majority of customer requests.  This knowledge base consists of product information, empowerment guidelines to resolve customer issues, and a decision tree for dispute resolution beyond their authority.  All of this geared to the “one and done” philosophy.
  2. Personalized Service: This concept connects the knowledge base with the agent’s ability to customize services or products to fit the customer’s request. Agents must be able to interact with the customer to determine his/her true needs elevating the agent’s role beyond that of an order-taker.
  3. Faster Connect and Up Time: This addresses the infrastructure of the call center.  The goal is to ensure the center is able to operate even if there are power outages or systems issues.   Continuous system monitoring insures the center can absorb a sudden spike in activity.  The worst thing for a customer is the inability to reach the contact center in a timely manner.

A call center’s ability to attain these three legs will enhance its effectiveness, and better equip agents to serve customers through its channels, leveraging the “one and done” concept, which has become the customer’s expectation!

The call center isn’t just another channel in your strategy. It can be a true differentiator. For good or bad!

This is the 2nd post in a multi-week series addressing the main office  and it’s transformation. We started our quest with How Loan Growth Ripples Through the Main Office.


Click Here


Branch Transformation | An Omni­-Channel Experience

A new distribution network emerges…Omni-Channel

Today’s financial services environment is characterized by change. The drivers of change include consumers, technology, and delivery systems. Moreover, financial institutions must change with these elements to remain relevant and competitive in today’s omni-channel economy. In addition, balancing service to younger and older segments and their preferences for how service is delivered will define success for the financial institution in the future – and keep in mind, that the customer is the judge of service quality.

Location, location, location

One of the biggest questions that we hear is, “How do branches maintain their relevance in an increasingly technological age?” Surveys underscore that 60 – 80% of new banking relationships are established through the branch network. Furthermore, a recent Ernst & Young study says 65% of sales occur in a physical location i.e. a branch. However, once the relationships are made, regardless of the financial institution’s size, customers migrate through a variety of delivery channels, with each customer seeking his or her most comfortable and effective method of interacting with the institution.

So…how does the branch fit today and tomorrow?

Omni­-Channel Delivery – defined

What we are describing is the distribution system that financial institutions will employ tomorrow (that is, if they haven’t already started) – the omni­-channel distribution network.  This network combines automated, physical, and virtual channels into a flexible, and consistent branded customer experience.

Furthermore, the physical branch synchronizes these channels by establishing customer expectations and the institution’s brand image in the market.

omni-channel network

It’s always on. The automated channel includes the institution’s ATMs and Interactive Teller Machines (ITMs). These channels are often self-service or assisted service and can operate 24/7/365, locally. The virtual channels include the phone system, web-based, and mobile platforms. These channels may be self-service or offer some level of assistance and operate 24/7/365…globally.

Evolution of Physical Channels

In the omni­-channel network, the physical channel contributes to service density by providing visibility, accessibility, and the institution’s full range of products and services. As always, convenience is a driver in the consumer’s choice of financial institution. Remember…65% of consumer sales occur in a physical branch. So, convenience is aligned with a habitual consumer commuting pattern between where individuals live, work, and shop.

The branch must find its purpose. As the retail branch evolves, it will be developed with a specific target market and “business case” as the motivation. Branches will have a reduced footprint, scaled to meet market and customer demands and styled to match those same preferences. Space within the branch will be open and flexible to facilitate change as needed to respond to changing market conditions.

The four types of branches

The branch of the future (or today) will be scaled and styled to accomplish several purposes. Many markets will include a cornerstone branch. This office is usually a large-format facility staffed by universal bankers and subject matter experts, and additional amenities. This office is the institution’s “statement” in the marketplace. (Here are some examples.)

Community branches are smaller than the cornerstone offices, but offer a similar level of service. They are focused on customer service and sales, staffed by universal bankers, and showcase the institution’s technology and automation. They offer the ability to schedule subject matter experts either by appointment of through an automated or a virtual connection. (Here are some examples.)

Micro branches are often found in storefront locations or leased space. These offices can be transaction focused, but are staffed with fewer employees and more technology to boost efficiency. They are heavy on technology, automation, and branding. Micro branches rely on automated channels (ATMs, ITMS, etc.) to provide most of the transactional capacity, with employees available for sales and service as needed. (Here are some examples.)

Finally, the self service branch is fully automated and heavily branded and has no employees. You can imagine a full service ATM installation or, more likely in today’s economy, an ITM creating an outpost of service for customers with extended hours capability.

Conclusion: Branches still matter

Although the role of the branch is changing, retail branches remain an important element in an institution’s omni­-channel delivery strategy. As financial institutions evaluate their current networks or contemplate new branches for branch transformation, they must be keenly aware of the market they intend to serve and the business case that supports the decision.

In the future, branches will be smaller and will focus on customer service and sale of more sophisticated products and services. The branch will work in a hub and spoke relationship with a variety of other delivery channels to offer the customer a wide variety of access points to the institution to deepen wallet share and long term stickiness with the institution.

In the omni-channel network, the branch plays a different ­and even more valuable­ role than ever – providing connection with the customer and community.

Sometimes stories bring new ideas into focus. We have an easy button for that!


New Call-to-action




 

 

Contact Us

Fill out the form below to contact us