Strategies to align branches with customer needs
Banking is an industry built on trust, and the majority of consumers still seek that human interaction through visits to brick-and-mortar branches. A recent Accenture survey found that branches are still the second-most preferred channel for banking (behind online) and that 25 percent of consumers still visit a branch at least weekly. In-branch banking isn't going away, but it is changing. The challenge for banks is to ensure their customers receive the same fluid, convenient experience however they choose to do their banking, whether that's online, via mobile, or in a branch.
"What's required is to shift the thinking about branches from transactions to engagement," said David Peterson, CSO and founder of i7Strategies. "Think about what you want people to do in the branch, and then the physical transition follows." In order to effectively transform their branches into customer engagement centers, banks must first establish clear strategic goals and ensure those objectives are aligned with the target customer base. "Building a bank culture is key," explained DeAnna Tittel, senior vice president of retail, Bank of Luxemburg. "Set expectations of what the customer experience should look like and sound like." While a bank's exact goals for the customer experience will vary depending on the institution's own strategic plan, in general customers want education or advice delivered in a convenient, efficient format during their branch experience.
Begin by Educating
"The biggest strength of a community bank is the trust the local community places in them," said Barry Thompson, managing partner, Thompson Consulting Group, LLC. "By becoming their financial advisor, banks will find that their marketplace will expand." Bank customers establish that trust through their interactions with frontline staff, often the first in-person interaction they have with the bank. "We find that our customers appreciate the knowledge they can get from a frontline employee," said Tittel.
However, the traditional branch layout (long teller lines with counters that divide customer from banker) doesn't foster engagement; it's designed to be transactional. To transition from transaction to engagement, banks should consider training frontline employees to teach customers about the various technology channels the bank makes available to them. "Have education sessions for your customers to come and learn how to use your tools, or make an appointment if they're having a problem," Peterson recommended. "Over time, you'll change the minds of the customers in your service area of what a branch experience is." In addition, Thompson advises banks to consider devoting time and resources to community education. "We're seeing more programs on elder fraud, on basic fraud, and school programs where bankers go into the schools and discuss things like social engineering and the problems that can occur over the internet," he said.
This knowledge-delivery strategy not only allows the bank to gain maximum returns on its investments in technology channels such as online and mobile banking through increased adoption rates, it also positions the bank to be a resource for customers and encourages engagement. By providing technology like tablets in the branch for customers to try out with staff assistance, the bank encourages adoption of its digital products and reduces customer hesitancy, especially among those who are not digitally savvy, while also delivering on the efficiency that many customers expect from their banking experience. "Our customers lead busy lives," said Tittel. "Empowering them to perform so many functions at a time that fits their schedules is key. Ensuring they feel comfortable and confident using all of those tools is a great benefit to them."
Technology can also enable staff to deliver efficient service within the branch. "Today's technology of online banking, mobile deposit, et cetera, not only assists the customer in getting things done quickly and at their fingertips, but internal software programs that allow accesses for frontline employees to obtain information quickly for the customer is key," said Tittel. "Giving those permissions to the right employee to fulfill that customer request creates a very positive impact when the customer can leave with an answer in hand."
Reimagining the physical space of the branch can also aid in creating the efficient, convenient experience most bank customers want from their branch visits. Peterson advocates envisioning the bank branch in a similar way to how Apple envisions its retail stores: as a place for customers to engage with staff and learn about the products they're interested in buying. "There's no register, no place to check out, because they want you to do everything on the devices, either theirs or yours, so you learn how to use it or you're encouraged to buy it," he explained. Peterson also recommends taking some of the space gained by removing excess teller/CSR space and converting it into something more community-facing. "Create a thinking lab that people from the community can reserve and use, or maybe install a 3D printer," he suggested. "Use that space for innovative community value-add to show you're both innovative-thinking and invested in the community." It can be as simple and low-budget as a meeting room with a whiteboard that the bank's customers can use as brainstorming space.
Designing a branch with teller pods and/or interactive teller machines allows staff to interact with customers in new ways and creates operational efficiencies for the bank. "Having a universal banker that can cover multiple functions and perform multiple customer requests can help reduce staffing and payroll budgets while keeping efficiency ratios in line," Tittel explained. However, Thompson strongly cautions against understaffing to the point where it becomes a safety or security hazard. "A branch should not operate with fewer than three people," he stressed, recommending interactive teller machines for banks that want to downsize their smaller locations, combined with service from a call center. "For rural community banks, the interactive teller machines are a giant leap forward," Thompson said.
Ultimately, any significant branch transformation must begin with staff training; no amount of remodeling will impact the customer experience as much as their interactions with bankers. "You have to have transformation not just of your physical space, but of your people first," Peterson explained. "It's not just customer service, but engagement - asking the right questions, listening, and being able to make recommendations based on the customers' responses. That 'consultative selling,' along with education and problem solving, are all high-engagement activities." By shifting the focus from transactions to customer engagement, banks can transform their branches into a place their customers—and potential customers— want to visit, rather than someplace they have to.