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At BAI Retail Delivery: Redirecting traffic at the branch

In an omnichannel banking session, panelists discussed universal bankers and pods, migrating transactions to self-service devices, and making customers feel comfortable with it all.

November 13, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

"The branch is dead! Long live the branch!" Though perhaps not in so many words, this has been the general idea in recent years. Because while the branch model we've known all these years seems to be fading, the branch as a concept is far from dead.

Naturally, the conversation was bound to come up at this week's BAI Retail Delivery Conference and Expo at the McCormick Center in Chicago.

A day-one session in the event's Omnichannel Delivery track took a closer look at the experience of two financial institutions currently grappling with practical questions about branch transformation:

"Does the branch still matter?";
"How can we simultaneously drive customers toward nonbranch banking channels while selling them products that they're used to learning about in the branch?"; and
"What is the best way to make our customers feel comfortable using new self-service technologies — while not making them feel that we don't care anymore about personal relationships?"

BAI Director of Research Mark Riddle put these and other questions to panelists Patrick Myron, SVP of retail network strategy and sales analytics at Rockland Trust, and Shawn Bradley, EVP of customer insights and reporting, direct marketing and retail strategy and design at Regions Financial Corp.

Riddle shared findings from BAI research showing that customers do, indeed, still value the branch, but that they also value the convenience of self-service.

"The branch is still plenty important for making deposits and I think that ATM deposits is definitely growing," Riddle said. "And some of the data that we're seeing is about a 20 percent of deposit-taking at ATMs over the past year. So that's a pretty good jump. And usually the offset to that is less teller or drive-through."

Bradley said that this statistic was consistent with Regions' experience over the past decade. And, he pointed out, as consumers migrate from traditional branch service to technologies such as deposit-taking ATMs and RDC, the overall contact with customers actually has increased dramatically — even if that contact is indirect.

"The good news is that we're interacting with customers so much more often than we used to ... and some of that has come by moving transactions out of the branch."

The introduction of remote deposit capture had also effectively moved deposits away from the teller line, Bradley said. In fact, consumers so value the service that Regions is actually able to charge a fee for it, something that only one other bank in the nation — US Bank — is currently doing.

What makes the service especially worthwhile to many Regions customers is that the FI offers a tiered schedule of fees, which rise according to the time-to-availability of funds.

Myron said Rockland had found that the two biggest issues on the "barrier side" of migrating customers to new technology were making sure that the customers knew how to use the technology and providing ready assistance in case the customer had questions while using it.

Riddle pointed out the irony, that with the increase in ATM- and RDC-migrated transactions, the opportunities to reach customers personally actually could be diminished. "If we're too successful in this, we may have a problem," he said. "If fewer people are coming into the branch and talking to [staff] we lose some opportunities there."

Myron said he did not see this as a problem, however. "By giving your customers more ways to make deposits, they're going to be more loyal to you and they're going to have a better relationship with you," he reasoned.

"From a face-to-face cross-sell opportunity — you hear about this a lot — but from of the research that I've seen, rarely do customers come in to make a deposit are they cross-sold anything."

It's arguable that this is a missed opportunity, Myron said, but by moving these transactions out of the branch, the bank could shift from service-focused fulltime employees to sales focused FTEs. "So when customers do walk into the branch, you've got those sales FTEs and they can have that conversation."

He and Bradley both said that figuring out a strategy for staffing did present some challenges for FIs as they move to a transformed branch model

Rockland has been testing the universal banker model with mixed success, while trying to figure out the right skill set, the right balance between sales and service, and branch layout. The bank has tried to introduce universal banking staff into the traditional branch, but was finding that the staffing model was more likely to succeed in a setting where staff interact with the customer as soon as they walk in to the branch.

Bradley agreed that an open branch layout is more conducive to a universal banker arrangement. He added that Regions had found that video teller services had been an effective way to bridge the gap in some branches, providing the necessary level of service staffing to supplement more sales-oriented onsite activities.

When the formula of universal bankers, pods, self-service, video teller and video expert conferencing is right, the results are there, Myron said.

"One thing that we've learned is that technology works, but people will make it successful. ... It's really important to make sure that your employees understand what you're doing, why you're doing it — and then educate your customers.

Bradley said that education has been especially important with video teller technology in the new universal banker model.

"We got them comfortable with the [pod] format and comfortable with the layout and the functionality there. And then on their exit, we would walk them by the video teller machine and demo it for them. ... We would actually engage the video teller on the other side and introduce them. And we saw the customers very quickly adopting it and using it as they came back for a second, third and fourth visit."

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.