Bank Customer Experience (BCX) Summit

How to avoid customer transformation pitfalls

How can banks successfully deliver customer transformation initiatives? A panel at the upcoming Bank Customer Experience Summit from Sept. 9 to 11 in Charlotte will offer the secret ingredients to a successful transformation.

Photo: Networld Media Group

June 11, 2024 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator

Many banks are adopting customer transformation initiatives. Whether that's renovating the bank branch, updating the app, adding a chatbot or integrating AI, there are many different ways to go about it.

However, despite the best laid plans, there are many pitfalls in the customer transformation journey, such as underfunding, lack of executive buy-in, lack of customer and employee feedback and more.

A session at the upcoming Bank Customer Experience Summit — hosted by Networld Media Group in Charlotte, North Carolina from Sept. 9 to 11 — will tackle this topic head on. Jean-Pierre Lacroix, president of SLD will moderate the session with Marbue Brown, founder of The Customer Obsession Advantage, along with Stephen Griffin, SVP of branch and ATM distribution planning, Regions Bank and Chris Mankske, SVP, director of retail network management at U.S. Bank.

To get a small taste of what the panelists will discuss, see the Q&A below with the panelists.

Q. What is one common pitfall in customer transformation?

Mankse: Going it alone, aligning design intent with servicing, staffing, segmentation, strategy intent among others. When design is ahead of service posture, the execution comes off confusing and misunderstood by customers/employees alike. When everyone isn't aligned, or doesn't know what we're trying to solve for collectively, it can create friction points all along the way.

Brown: One common pitfall in customer experience transformations is that institutions play checkers instead of playing chess. By this I mean that financial institutions often do not think of the unintended consequences of some of their proposed changes so even though they may mean well by the changes, the outcomes may not be as favorable to customers as they intended. For example, an institution may decide to refocus the mission of their branches to be advice centers vs. transaction centers and take away transaction windows, but that may be a non-starter for small business customers that frequent that branch to make large deposits of coins on a daily basis. Alternately, an institution may decide to go digital first to "skate to where the puck is going to be," but what if its existing mix of customers is heavily skewed toward customers that aren't "born digital"? Where does that leave those customers? Does the strategy make accommodations to shepherd these customers through the transition?

It is lack of attention to thinking several moves ahead that leads to customer attrition, deposit outflows, and other forms of lost business. Reminds me of a story Jamie Dimon told where he once heard a competitor bragging about how every time Chase closed a branch, his company moved in. It turns out the competitor took 100% of the consumer business in those branches. By the way, as that competitor left the stage Jamie told him it would never happen again and then promptly put measures in place that ensured he made good on his promise.

Lacroix: The first significant pitfall is more clarity on the transformation program's goal. When a program's impact spans multiple departments and business units, it's common for each party to have different goals for the desired outcome. These goals often need to be revised, such as the need to cut renovation and operational costs conflicting with the desire to create immersive advice-conducive experiences. In addition, most transformation programs are driven by a given department, which, as a result, has a biased view of priorities, resulting in a lack of alignment at the executional stage. We must clearly understand the program's goals to ensure our efforts are aligned and effective.

The second pitfall is the lack of customer- and employee-centricity. Often, a transformational program results from the need to retool the branch network or respond to competitive threats. In this process, customer and employee needs are frequently relegated to secondary priorities, undermining the program's impact. By prioritizing the needs of our customers and employees, we can ensure a more prosperous and impactful transformation program.

The third pitfall is a short-sighted view of change management. Retail banking is experiencing ongoing customer and employee behavior changes, such as a shift toward banking technology, the diminishing role of cash, and a change in reasons to visit a branch, to name just a few. Considering solutions with a three-to-five-year horizon is crucial for the sustainability of the transformation program.

Q. How can banks avoid this pitfall?

Mankse: Having a unified approach as an organization of what your servicing requirements are, service within the branch (choreography, safe deposit, vault and cash) and service outside the branch (drive thru teller and/or deal drawer, drive thru ATM, night drop, etc.)

Brown:There are several effective strategies banks can use to avoid this pitfall.

Solicit feedback from employees who will be affected by transformation plans as well as involved in implementation of them, especially employees that engage directly with customers who will be affected by changes.

Embrace and even seek out naysayers who have a knack for finding everything that can go wrong with any change, but especially those who are dead set against the proposed transformation. If you're only hearing from people who affirm your transformation plans, there's a good chance you're missing important factors you should be considering. Once you've heard from these constituents, use the "5 Why's" to dive deeper into their concerns to uncover any potential "landmines" in your plans.

Deploy a structured approach to vetting transformation plans that is something like the Disney Method, which forces innovators to examine ideas from three distinct vantage points:

• The Dreamer — Develops innovative ideas unfiltered by limitations.
• The Realist — Morphs and reworks ideas to achieve implementation feasibility.
• The Spoiler — Pokes holes in plans to see if they can withstand the harshest scrutiny.

Use "war games" to simulate the transformation. For example, mock up a sample branch design in an offsite location and have actual branch employees participate in exercises that simulate a "day in the life" of various employees and customers for that branch.

Deploy proposed changes on a small scale in a low-risk environment to test, learn, and adjust plans.

Lacroix:Developing and aligning a project charter with clearly defined processes and desired outcomes. A lack of clarity on the "Why" and "How" often leads to conflicting priorities well after the initiative is started. Working with the various business units and departments to answer these questions as part of an approved project charter will avoid project disruptions, as typical transformation initiatives are completed over years rather than months.

Design flexibility on your program. The digital transformation approach of agile tasks is built to pivot pending challenges or key learning needs to expand to the branch transformation work stream. With a shift away from transactions and cash, the complexity of financial product choices and providers should be reflected in how branches are designed. Building drive-thru flexibility as fewer people drive or transact at tellers will maximize current investments.

Build vital measurement tools. There are a lot of biases on the success of branches, with little measurement and tracking occurring. This leaves retail banking executives with the ongoing boardroom tug-of-war on capital investments. Numbers do talk loudly about performance, and what gets measured gets done. More significant effort and consistency must be incorporated to support the full range of metrics on branch renovations. Our recent study validates the fact bankers do not measure what truly matters for customers, which leads to opportunity gaps.

Click here to register for the Bank Customer Experience Summit. Save money by registering before the early bird deadline on June 21 and use the code AMCEDIT20 for an additional 20% off checkout. The event will be co-held with the Interactive Customer Experience Summit. One badge gains you entry to both events.

About Bradley Cooper

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Bradley Cooper is the editor of ATM Marketplace and Food Truck Operator. He was previously the editor of Digital Signage Today. His background is in information technology, advertising, and writing.

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