Article

Leveraging innovative technology to transform the branch

An panel at BAI Retail Delivery discusses the challenges of getting people, products and processes to work as one and provide the ideal customer experience.

October 15, 2015 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

It's no secret that the rapid development of mobile and online channels has dramatically changed where and how consumers do their banking today.

But the physical channels — the branch and ATMs, specifically — still play a critical role in meeting the customer's desire for convenience, relationship and, most importantly, options.

With this in mind, FIs have begun the evolutionary process of redefining the branch as a high-tech, high-touch environment that combines the efficiency of advanced technology with the warmth of personal service.

This week at BAI Retail Delivery, a panel of tech and banking executives discussed what it takes to achieve this delicate balance, offering attendees the benefit of multiple points of view on what works — and what doesn't — in developing a copacetic combination of people, products and processes working in unison to create the ideal customer experience.

The session was moderated by moderated by Jim Eckenrode, executive director for the center for financial services at Deloitte. Panelists included: Chris Zaske, global vice president of strategic operations at Verint Systems; Bernie Schramm, senior vice president of channel strategy at FIS; Joe Gnorski, vice president of Glory Global Solutions; and Jim Cook, industry principal at Kronos Inc.

JE: What is branch transformation really all about and what should banks get out of the effort?

BS:Branch transformation is all about optimizing our individual branches and the operations that are going on in those facilities, as well as the whole branch network taken as a complete structure.

So we start with the roles of our staff in those branches and want to attack some of the lower-value activities that go on in branches. Actually you think about tellers and the handling of checks and the counting and activities and things like that, that we know are costly, and we know we can lower that by bringing in things like enhanced ATMs and bringing in recyclers. The next aspect is that we need to bring more self-service capabilities into the branches to offer them so that those transactions can be efficiently done. ...

Now we want to look at the physical layout of the branch, where we put those self-service devices, how we open the lobby areas so there's open inviting spaces for interaction with our bankers — with work stations and high-top tables for sales transactions and more personal discussions.

And now that we've done all that ... we start to shrink the size of the footprint. So we can go to a mix of the large full service branches and mini and micro branches that are very small, very focused, much less expensive to operate. So we can put more of those around and increase the dimensions of our footprint.

When we've done all of that, we've should have tackled the three drivers: our real estate, the people, the cash handling. We'll see all of that and we'll also see improvement in the engagement with our customers.

JE: How do you get the technology right?

JG:A professor at MIT wrote about about how people respond to technology, called "The Rise of the Machines." And one of the really interesting examples that he uses is at the start of the industrial revolution we switched from steam power to electric power. And he said there's really two ways that people could respond to that technology. There was the naive way, which was to say, "I've got a big steam generator in my basement and I'm going to replace that with an electric generator in my basement and that's going to run my factory.

And then there were people who looked at it and said, "This electric power that we have will let us have smaller engines." And they let the technology challenge how they did business. They didn't need overhead pulleys and gear systems to run their factory anymore. They literally reinvented it because they allowed the technology to push them, vs. simply saying I'm just going to take a bunch of technology — and how often have we done that in the banking business — and put it somewhere and said, "Poof!" and transformation is supposed to happen. It's not about that.

And to the point ... around understanding people and processes and technology and making sure we have them all connected, it's really about how we evolve the technology and respond to it that's really going to change the transformation approach.

JE: What do you see in the context of transformation with the innovative technology that we're seeing in the market?

JC: We've got to look outside the banking industry and have vision across other industries and what they're doing now. You can see the innovation and drawing that innovation into the banking industry is critical. A lot of what has been done with kiosks in other industries we've brought into the banking industry. And where mobile has gone, we're starting to bring it into the banking industry. And now it's wearables. We're exploring that and a lot of people on the consumer side are trying to figure out how to leverage that. And everybody's trying to figure out how to bring that experience into the banking industry.

CZ: I was recently talking to Bank LaSalle and they have a very good strategy ... smaller branches, and markets in which we're going to grow and others where we're going to retrench and so forth. And a lot of those discussions are around technology. there's conceptual vision about the future branch, to say, "We want to converse with people, we to be much more oriented toward the sales transaction, we want to provide guidance with a mix of technology pieces to help with guidance.

But when it comes to ATMs, they've put in a number of them. Some full-service ATMs; some video ATMs. And they've been very successful; markets in which they worked, at the end they put them in in place and now plan to put a branch around them.

So it gets back to, "What's the purpose? What's the change management? and What's the tracking for customer reaction?" Just all of the standard logic stuff for why it has to be built. But if [banks] think of it as the panacea or the silver bullet ... just that you put the technology in, it won't solve the problem if people won't use it.

photo istock

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.