Branches are in the middle of a significant transitional period. As the need to reduce operating expenses and grow profits continues, banks are looking to adapt to the shift by developing new strategies for attracting new customers, deepening relationships with existing ones, while attempting to provide the very best service possible.
Branches are also no stranger to the adoption of new technology. With the emergence of online banking, mobile banking, smart ATMs, interactive video technology, and other innovations, bank customers can now save a trip to the branch as they are given convenient access to perform common transactions and research financial products and services.
Unsurprisingly, branches have seen a decline in traffic as there has been a 45 percent drop in transaction volumes since 1992, according to the 2015 FMSI Teller Line Study. However, there is still value in the branch. According to a 2016 J.D. Power study, even though there has been a decrease in numbers in traffic, branches are still considered a key channel for resolving customers’ problems or completing more complex transactions. While many once thought the adoption of new technology would prompt the demise of branch-based banking, experts now see branch change as an open door for banks to gain a new competitive edge.
The changing landscape of the branch models
Although it may be simple for banks to see the benefit in the shift in the branch landscape, transitioning to the “branch of the future” is not a quick and easy fix. Modifying branches requires an ample amount of time, effort, and budget, so as banks begin switch gears to this direction, three different branch models have come into existence:
- The traditional branch model: This is probably what comes to mind when we think of a typical branch today. The layout is familiar and functional, yet set up in a way that tends to favor the bank, not the consumer. For example, account holders may have to work with two or three different employees to resolve an issue or learn about new products or services. Such a silo’ed approach also makes it difficult for employees to access all of the customer’s information, thus missing out on valuable opportunities to cross-sell or provide exceptional service.
- The self-directed branch model: This model represents the best of both worlds between the traditional branch model and the vision for the branch of the future. Self-directed branches are designed for maximum speed and convenience for their account holders. Instead of human tellers and long lines, these branches provide fast, easy transactions using video tellers, smart ATMs, touchscreen devices, and other technology. If customers need more assistance, these branches also make it easy to schedule an appointment with the right person to answer their questions. All of this is designed to help customers to get in, get out quickly, and get on with their day.
- The personalized, full-service model: To imagine this example, think of the Apple Store and how it has revolutionized the retail experience. Similarly, in this branch model, account holders receive hands-on, concierge-like service from friendly, knowledgeable staff. Bank employees are trained as universal associates, capable of managing transactions themselves or introducing the right team customer to resolve any additional questions. The focus is on the bank customer’s experience and satisfaction, and these employees do all they can to provide world-class service while also driving higher quality interactions and more profitable transactions.
Multiple models, multiple challenges
The management of an organization with three different branch models provides a few challenges, particularly those geared towards the way banks deploy their workforce. Different branches require employees with different talents, so banks must have a broad spectrum of employees with specialized skills, financial knowledge, dedication to customer service, and other attributes. Additionally, banks must also be able to schedule the right employee at the right place at the right time to meet demand and control labor costs. There’s a lot at stake: If they can achieve these goals, banks will improve their ability to serve account holders and create highly profitable, sales-centric branches.
The technology advantage
In order to attract and manage a high-performing workforce for all branch models, banks clearly need the best possible solution, yet many question how to go about accomplishing this objective.
Human capital management technology may be the answer they are looking for. Human capital management solutions are helping banks improve the way they hire, manage, and retain top talent, and in doing so, provide an ideal branch experience that increases satisfaction, loyalty, and bottom-line results.
For example, in the case of the personalized, full-service branch model, a manager can use specialized scheduling solutions to forecast future traffic volumes and then schedule the right employees to best meet this demand. These sophisticated schedules factor in such variables as employee skills, availability, certifications and other qualifications, balancing those employees’ labor costs against demand and budget. Additionally, specialized staffing solutions give managers detailed visibility to efficiency and performance. In this case, she can schedule a part-time teller for specific times and re-allocate other employees to secondary duties, such as outbound calls or balancing the vault.
The many benefits of a simple solution
With the perpetual evolution of branches, banks can rely on human capital management solutions to overcome staffing challenges inherent with the branch types of the future as well as today. In doing so, human capital management delivers a rare win-win scenario – technology that enables banks to increase customers’ experience and satisfaction while helping the overall organization reduce operating expenses, increase sales, and improve profitability.