The world is transforming, and retail banking is just one of the many industries struggling to keep pace with changing consumer attitudes, desires and behaviors. Objectively, we can step back and nod knowingly at the changes that must take place: orchestrated technology, omnichannel experiences, a marriage of human and digital touches that not only empowers consumers but also reinforces the retail bank as a trusted source of advice and a trusted repository for their hard-earned money.
But the reality is that we’re mostly caught up in an ever-changing environment with shifting priorities and an unclear long-term roadmap. The fact of the matter is that transformation is a continuous journey that never truly ends – and facing that hard fact is almost enough to make you want to throw your hands up and forget the whole business.
A 2015 Celent panel series revealed that 40% of retail bankers say they are “unclear or have no vision,” half say they’re in the process of developing a vision, and just 10% say they actually have a clear vision for their branch transformation strategy.
Those are some shocking numbers when you consider that, as an industry, we’ve been talking about branch transformation, automation, even mobile banking and biometrics, for many years. But they illuminate the difficulty of committing to a strategic path that may not look quite right in just a few months’ time, when the “next big thing” comes along.
A clear transformation strategy requires some heavy lifting, no doubt about it. It requires financial institutions to think comprehensively about their current pain points, and the current pain points of their consumers.
Typically, we see FIs focus on two areas: technology and design.
Are you nodding your head?
Of course! They’re crucial components of branch transformation and transaction migration, which are critical to improving operational efficiency and strengthening relationships with your clients.
But they can’t be your sole areas of focus. Think about the infrastructure buoying tech and design:
- Your people
- The processes that have been in place, sometimes for decades
- Sales and marketing
In meetings with hundreds of FIs around the globe, our Advisory Services team has continually found that transformation initiatives often fail to meet objectives – because the strategies focused too much on technology and design, and often overlooked the other four, particularly people and process.
Set yourself up for success: Whether you’re one of the 40% with no clear strategy, or one of the 50% in the planning stages, make sure you’ve asked yourself and your team the right questions:
- Who are the key stakeholders in our branch transformation process?
Unless you’re a large national bank, you likely have employees who are wearing many hats, with little time for lengthy, strategic projects that have many moving parts. But if you don’t have representatives from across your organization at the table, you’re missing part of the picture.
Staff from retail banking, branch and/or ATM ops, human resources, marketing, training, facilities, internal communications and risk management all play an important role in the branch transformation process. That can be a daunting task – and that’s why our Advisory Services team members have honed their expertise as “quarterbacks” who can lead diverse, disparate, busy teammates toward a unified goal.
- Have we committed the necessary funds to train our staff and create in-house champions of our transformation and automation efforts?
Your job descriptions, staffing model and compensation plans will need to change. Your approach to training and hiring will need to change. You may need to relocate individuals from one location to another if they don’t support your transformation efforts. Those can be some tough things to think about, and some difficult conversations to have. But it is your people who will take your initiatives across the finish line. You need a human capital strategy, and you need one earlier, rather than later.
- Have we clearly articulated how we expect consumers to conduct their transactions post-transformation?
So you want to automate transactions, and free your tellers to become sellers and universal bankers. Have you identified a process for each and every transaction that clearly outlines why a consumer would migrate to a self-service terminal? Have you created a so-called “journey map” defining the consumer experience for certain types of interactions (i.e., a routine deposit)? You may install fancy new technology, but if it’s not intuitive, compelling or functional, your consumers – and your staff – may treat it like the world’s largest paperweight. It’s not enough to add bells and whistles; make sure your technology improvements are meeting the actual needs of your individual consumers. Think about it from this perspective: What solutions can I implement that will generate the greatest ROI for my organization?
- How are we introducing and promoting changes to our clients?
Be prepared! Really, it should be the theme of this entire article, and of your entire strategy. But when it comes to modifying consumer behavior, you can never be too prepared. Be prepared to ask probing questions – and to answer sometimes difficult questions. “What brings you into the branch today?” “What kind of transaction are you looking to conduct today?” If it is a routine transaction that can be performed via self-service, then asking “Have you ever considered using our new terminal?” is a great way to start, with a follow up of “Let me show you how it works.”
Anticipate questions your clients may have and script the responses your branch associates can use. Invest the time to educate your team on the technologies you are deploying and give them time to practice, using their own accounts if possible. Doing so will help build their confidence in their ability to discuss the new solutions with their clients. Follow the lead of the TV pitchman: Get excited! Give your clients the information they need before they have to ask. Highlight the features and benefits. Toot your own horn!
- What impact will new design elements and technology improvements have on both physical and information security of the branch?
An open layout looks great, but it can lead to questions from clients about security implications for branch staff as well as consumers. Those implications must be addressed early in the transformation process, lest they become too difficult and costly to change later on. As technology and design elements change the processes of your staff and consumers, are your security standards going to keep up? What changes are required to your security processes and training to support the new environment?
- What is the role we want our ATM channel to play in the current complex retail delivery environment?
Is the ATM basically a utility for the purposes of meeting consumers’ cash needs? Or is it a device with more advanced functionality that can help migrate transactions to a lower-cost channel, thereby reducing operating costs and helping position the branch as more of a sales and advisory center? Can it help support revenue generation efforts by providing tailored marketing offers to consumers using the ATM?
Determining your institution’s self-service strategy is critical in order to prioritize your channel investments and define the experience you are looking to provide in your branches. Without a clearly defined strategy, you may not realize the value of the investments you are making in the ATM channel. And once you have a strategy, it is important to communicate it throughout the organization so that branch staff can interact with consumers appropriately.
Six loaded questions … and there are so many more to ask along the way. Branch transformation is not an easy endeavor, and that’s why we believe so strongly in working with the right partner from the beginning. Whether you need a quarterback, a head coach or a sports psychologist, getting an outside perspective is often the first step toward achieving the results your team needs for continued success.
Let’s talk about the right answers to these questions, and how Diebold’s experts can help make a meaningful difference in your ROI.