Page 34 - 630578_IBAT-Jan-Feb2018

to handle other functions, but fails to change the ca-
dence of how branches operate. That results in staff re-
The Branch of the Future is Here… verting to previous, comfortable roles. Getting it right
and It’s Still a Branch requires rethinking branches not as a collection of
Banks and credit unions still open about 1,000 new individuals with specific defined roles—teller, custom-
branches a year. Although the total number is declin- er service representative, personal banker, etc.—but
ing, almost all the attrition originates from the larg- rather a team of players who can, and do, perform all
est banks, while community banks drive the majority branch functions. They become a group of utility play-
of new branch growth. One thing is clear: customers ers, with the branch manager functioning as a coach.
still want physical locations. Countless surveys show
that branch convenience remains the top criteria for
selecting a financial institution. Data from Bank of Technology Will Facilitate Improved
America and Chase reveals that, contrary to popular Personal Service, Not Drive Self-Service
assumptions, millennials use branches with roughly Yes, there is a place for interactive teller machines
the same frequency as average bank customers. And (ITMs) or other similar technology, but it remains far
while it may change in the future, 85 percent to 90 from proven. ITMs require one half-time to one full-
percent of all new accounts are opened in branches, time employee per machine in the call center, which
not online. Even disrupters such as Amazon recog- begs the question of economic viability. No reduction
nize the need for physical distribution. Its Whole in staff despite significant capital outlay? Attempts to
Foods subsidiary now has Amazon Lockers where turn ATMs into mini-branches through video have
customers can pick up their online orders, and Ama- yielded similar mixed results.
zon is beta testing a physical store concept in Seattle. Branch technology pays off when it makes it easi-
er to serve customers. Cash recyclers, especially when
used in pods or open teller lines, can improve security,
It’s All About the Customer Experience staff utilization and customer interaction. Simplifica-
Customers have a choice. They know that almost ev- tion and automation of operating procedures moves
erything customers do in a branch they can also do non-customer activities out of branches and allows
through other channels—through call centers, on staff to focus on sales, service and marketing. Use ar-
computers, with smartphones or at an advance-func- tificial intelligence to augment, not replace, human de-
tion ATM. When they visit a branch, they choose cision-making to create a better customer experience.
human interaction. They don’t want to come into a
branch only to be told “use our self-service terminal
and do it yourself.” Rather, they want a personal ex- It’s About Agility
perience they can’t get at home or via a mobile device. We live in a time of rapid change in technology, com-
This does not suggest that self-service has no role in petition and customer behavior. Financial institu-
some locations, or as a strategy for some banks. But tions must adopt agile decision processes that better
be careful. If you believe that self-service represents prioritize opportunities and shorter go-to-market
the new normal, then why do you need branches at cycles. Many banks are adopting management con-
all? Banks now pay greater attention to the choreog- cepts learned from fintech partners, including rapid
raphy of the in-branch experience and the integra- idea generation, iterative development and fast test-
tion with digital and call center channels. and-learn pilots. Gone are the days of long-term de-
velopment cycles where the end product is obsolete
by final implementation.
The Universal Banker is the New Standard Agile project management concepts are not new.
With declining branch traffic, the traditional branch Around since the late 1950s, they’ve received fresh
staffing model must change. About 60 percent of bank attention thanks to successes at companies such as
branches are staffed at higher levels than required by Apple and Google. This revived management wrin-
customer traffic—security, dual control or standard kle is being adopted for mainstream decision making
staffing protocols drive the number of personnel. That at banks as varied as Fifth Third or Frost. You should
is not only economically unsustainable, but makes the ask: Is there a Scrum product management with a
customer experience even worse because it rarely pro- sprint timeframe in your future? H
duces the right mix of staff at the right time.
Financial institutions have experimented with David Kerstein is president of Austin-based Peak Performance
a “universal” model, though they struggle to get it Consulting Group, which specializes in community and retail
right. Too often, it simply involves cross-training staff banking strategies. Contact him at [email protected].

34 | THE TEXAS INDEPENDENT BANKER