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Common Pitfalls that Hold Back the Power of the Branch

November 7, 2016

This article originally was published in Credit Union Business

By Meredith Deen, Director Product & Services, Kronos

The branch isn’t just for collecting deposits anymore.

But for those who think branches have gone the way of the typewriter or rotary-dial phone, think again. Banks and credit unions must use their branch infrastructure as a competitive advantage as they fight high-tech startups that threaten to eat into their business.

With mobile banking’s surge in popularity, the branch is no longer a place for consumers to stand in line, hand an endorsed check over the teller counter and walk away, while stuffing a paper receipt into their purse or wallet.

As banks and credit unions have moved into the mobile space, it’s put them in direct competition with the likes of Apple and Google. It’s not just Apple Pay, either. Venture capitalists have invested $23.5 billion in Silicon Valley fintech startups in just the past two years, according to an Oliver Wyman study.

For many traditional financial institutions, the challenge is how to compete with fintech companies that don’t have bricks-and-mortar, when your own company has plenty of real estate and must pay the employees who work there.

Sales Centers, Not Transaction Hubs

Tellers are a prime example. Sure, tellers can provide advice on how to balance a checkbook, or offer a friendly introduction to a loan officer. But if your financial institution still thinks of its tellers as the primary facilitator of basic banking transactions, it’s time for your management team to reserve a conference room for some serious discussions. FMSI’s Teller Line Study once again shows how the role of tellers is changing drastically.

Start by rethinking how your branches are staffed. Instead of recruiting workers whose experience is limited to bank or credit union branches, branch out (no pun intended) to find staff with pure sales experience.

Now your branches are a potent weapon against the nameless, faceless offerings of fintech companies, whose products and services are limited to screen-based or phone-based conversations.

Branches are sales hubs, places to meet a financial professional in person, where a consumer can have an actual conversation. It’s the place where your loan officers or investment advisers can get a read on what the customer really wants or needs.

Ask any sales person and they’ll tell you: If you can talk to a customer in person, you can adjust what you’re selling on the fly, pinpointing the customer’s needs and directing him or her to the perfect product or service.

The branch offers something a smartphone can never provide: real human interaction.

Rethinking Branch Staff Models

When the branch is recast as a sales center, it also means the employees who work there must be assessed in the light of revenue-generation. That’s how banks’ and credit unions’ new competitors assess their own employees.

The average revenue generated per employee at Apple in 2014 was a staggering $1.96 million. At Google, it was only slightly less impressive, at $1.23 million per employee. Compare that to Bank of America, where the average revenue-per-employee in 2014 was $597,484. Fifth Third Bank’s staffing model was even less efficient, at $361,111 per employee. And Navy Federal Credit Union was lower still, at $333,333 per employee.

Track the sales performance of your branches’ workforce with queue management applications, like Kronos FMSI Lobby Tracker™, which offers ways to assess how long it takes an employee to help a customer, the rate of cross-selling products, the total amount of sales per employee and more. Performance management information systems, like Kronos FMSI Performance Analytics™, can show how sales-based staff members, compared to traditional branch employees, generate much higher levels of cross-selling.

Remember this important point: There will be a transition period before financial institutions can fully transform branches into sales hubs. Many branches still handle significant traffic for routine transactions. To manage the transition, software solutions like Kronos FMSI’s Scheduler™ can help with administering staffing schedules, putting workers in place at peak times during the day.

When crunching the work schedule, there’s a bonus when you hire employees with sales experience. Many sales professionals will come from the world of retail, where they are used to working weekends. With many banks and credit unions expanding weekend hours, if the staff is already comfortable with Saturday or Sunday shifts, that makes it much easier to create a schedule.

The Newly Empowered Consumer

Thinking of a branch as a sales hub also raises the question, who are you selling to? If your institution still thinks a branch’s target audience is the holder of a traditional checking or savings account, then it’s time to once again reassess.

Many customers walk into a bank branch armed with information. That’s because they’ve done research on their own ahead of time, typically online. Your branch-based sales staff must be ready to handle these newly empowered consumers.

Also, your credit union or bank also should upgrade its website or mobile app to satisfy consumers’ desires to learn as much as they can, before walking into a branch to meet with someone. If a potential customer can’t find the information they’re looking for on your site or app, they may decide you’re trying to hide something, or at least make it difficult for them to get the knowledge they need.

After your staffing models and technology have both been upgraded, you don’t want potential customers to walk into a stale environment. Branches should be upgraded with new designs, with focus placed on pod-systems, rather than traditional teller windows; self-service kiosks; smart ATMs; and other tech-based features.

Upgrading branches with technology can also help in the fight against fraud. Some new branches include security cameras to prevent fraud. Cash recyclers also help root out fraud.

Thinking Outside the Box

Banks and credit unions aren’t the only places that generate new ideas for branch models.

Borrow an idea from the world of cell phones: Set up an online appointment system for your branch. While potential customers are researching your offerings online, they’ll probably also be looking at their calendars. They want to come in and have a follow-up discussion with your universal bankers about the loans or investments they’re considering. Kronos FMSI Appointment Concierge™ makes it easy to add this important piece of the puzzle to your website or mobile app.

There are exciting innovations for customer interactions in the retail world, too. Restaurants like Chili’s offer tabletop ordering systems, as well as the ability to pay the check at the table.

Rewards don’t have to be limited to credit cards, either. Take airlines as an example. Many airline carriers have expanded far beyond the standard miles-for-tickets approach, and let customers apply their points to hotels, luxury merchandise and more. Banks and credit unions can devise their own rewards programs for their most-valued customers.

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