A large European bank has a very robust transformation program underway which is looking to rethink their branches in light of the high levels of digital engagement they are seeing from their customers. Part of the transformation was to completely retool how their employees engaged with customers in the branch. Their goal is to move all routine “high counter” (i.e. teller) transactions to self-service and have their branch staff focused on developing a much deeper relationship with their customers.
Unfortunately, their software team was faced with an unforeseen delay that caused the deployment of the branch technology to be pushed back by about 2 months. Undeterred, the transformation team decided to move forward with their first branch pilot without the benefit of the new technology.
As a result, for two months, the bank tested a new approach to serving customers without the underlying technology upgrade. Surprisingly, in those first two months, the organization saw a measurable improvement in consumer satisfaction and sales. Once the technology came online, the bank found they were able to take the early momentum and improve upon it with the benefits of the new back office upgrades.
As banks continue to transform the way customers are served, branch transformation has been at the forefront of the conversation. Although the transformation process is commonly viewed as being a software and hardware initiative, a much larger, more holistic process – focused on improving customer experience – is crucial to long-term success.
When shaping the customer experience, financial institutions must first realize that transforming a branch is more than just deploying new and improved technology. All too often, banks and credit unions buy the latest technology as a solution without properly identifying and assessing the core issues first.
A thorough evaluation process is vital to successful immediate and ongoing branch transformation. Most successful financial organizations achieve their end-state-vision through a five-step process:
A key misstep many banks and credit unions are guilty of is not understanding that before technology can be deployed, they have to identify what is right for each branch. A consultative approach is critical for a transformation project to be successful for both the bank and its employees.
A bank is only the sum of its parts, and simply installing new technology will not fix critical underlying issues. A strategy must be in place before new technology is installed in the branches. Otherwise banks are likely to end up with suboptimal results due to having high-powered technology on the front-end, but discontent and confusion on the back-end.
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Utilizing All Channels
As branch technology continues to advance, so do the options that consumers have for conducting their banking transactions. With more and more consumers using self-service and digital channels, banks have to continue to evolve to make sure they are taking advantage of every possible client touch point.
Customers have yet to find a channel that they do not like. Every time a new channel is created, customers flock to it to see what new capabilities they might be able to use. For banks, creating an omnichannel strategy is important to give clients a consistent experience across all channels.
When going through the transformation process, banks have to review what activity they have been doing in each bank channel and carefully evaluate how they interact with clients. Banks should enable customers to interact with the institution whenever they want, but using the right channel for each transaction. By identifying which interactions make the most sense in each channel, this empowers banks to create consistent and successful user experiences.
What Does ‘Consulting’ Look Like?
The first thing that is likely to be discussed during a transformation consultation is the bank’s branch network. For this, a bank has to go back to the basics and ask themselves fundamental questions, such as, “Do I have the right number of branches in the right locations?” and “Is this branch the right type of branch for this location?”
With the current proliferation of digital channels in banking, a branch may no longer need as many ATMs as before. However, one size does not fit all when it comes to individual bank branches. Many variables must be examined closely, such as location (suburban, rural, urban) and typical customer needs (withdrawals, deposits, new account openings). Once a bank understands what type of branch they need, there are six standard variables they should also consider to positively change the customer experience within the branch:
- People – how can the branch staff be reutilized upon implementing new technology?
- Process – how should internal processes be updated in the bank both in front and behind the counter of the branch
- Design – does the branch need to be redesigned and if so, how should it be designed to enhance the experience of the customer?
- Sales and Marketing – how is the branch going to facilitate sales and market products more effectively?
- Security – what new security issues should be taken into account and how should the branch be adapted accordingly
- Technology – this is the last step, as technology can be the enabler of all previous steps. Which technology solution(s) will be the best fit within the branch?
By evaluating these factors and applying them with a critical lens to each and every branch in their network, banks can create a roadmap to success which will lead them to their end-state-vision.
Achieving the End-State-Vision
At the highest level, banks want to transform branches from transactional centers to sales and advisory centers. Because there are still many (albeit significantly fewer) transactions that take place within the branch, there are ample opportunities for banks to employ automation technology that can assist with even advanced transactions.
On the flip side, tellers must now understand and embrace the new technology, while also completing more complex consumer transactions. As branches evolve into centers for guidance, customer instruction and coordination becomes an extremely important step once a branch has implemented an automation strategy.
Once a bank understands its strategy and branch layouts, they can create a plan to successfully communicate the changes to customers. This can span from how branch employees greet customers at the door and guide them to their destination to simply advising customers on where to best complete certain transactions.
For a bank to achieve its end-state-vision, it is more important than ever for branches to take the right approach to transformation and utilize the appropriate resources to undergo a branch transformation project. With the right consultation process and strategic planning, branches can reinvent themselves to better meet the needs of their consumers, differentiate themselves from the competition, and stay ahead of the pack.