A Stage for Engagement

New technologies, expanding delivery channels, economic pressure, and growing customer expectations are driving the transformation of branches toward new business models and experiences. While branches are getting smaller, more transactionally efficient and focused on high productivity, they remain a stage for people to engage with people and drive a highly effective branded experience for staff and members. All this change requires new, elevated staff skills. Staff are no longer process workers; they must be knowledge workers.

The goal for many financial institutions is to reduce operating costs. While some studies show that using personal teller machines can reduce costs 30 percent by reducing staff and space, other studies tell us there has been no increase in productivity. Keeping existing deposits and loans while reducing branch size is rewarded in the short term by lower cost. However, in the long term, lack of increased productivity may only produce modest return on investment.

Members may visit a branch less frequently as they migrate to remote transactions. This means every visit to a branch must hit the ball out of the park in terms of relationship building and increasing share of wallet. Enhancing productivity requires increased staff performance that is measured by new expectat

A survey conducted for The Financial Brand by Bancography (a CUES Supplier member based in Birmingham, Ala.) shows us the investment that banks are making in branch evolution technologies:

• 68 percent plan to use image-enabled smart ATMs.
• 53 percent plan to use cash recyclers in all branches (16 percent plan to use them in some branches).
• 42 percent plan to shift to a universal agent model, in which one staff member is ready to serve all of a member’s needs.
• 30 percent plan to retain traditional teller stations.
• 11 percent plan to utilize remote video tellers.

Three basic branch environments are emerging. Each of these has significant variables depending on the target market, product array and priorities, and cash handling methodology.

1. Transitional branch with teller pods and cash recyclers – Here, universal associates function as both tellers and new accounts and consumer lending staff.
2. Traditional branch with teller line – Teller staff are separated from new accounts and lending staff with teller supervisor and manager. Umpqua Bank operates a hybrid hospitality version with all staff working as universal associates.
3. Express branch with PTMs – All cash transactions are provided through PTMs and all staff are focused on relationship development.

How do these new and hybrid models impact staffing? As branches become more advanced, staff performance expectations increase. Even in today’s traditional models, expectations are much higher. Staff members are moving from being process workers to knowledge workers. We now expect everyone in the branch to have a basic knowledge of all products and services at an introductory level, and then hand off members to a high value service provider in the branch or through video conferencing.

In the 1980s, branches started to evolve from service centers to sales centers, requiring staff to actively engage members in productive conversations. Staff had to get up from behind their desks or out of their offices and talk to customers. This was a seismic cultural shift for many organizations and they often needed to replace 40 percent and more of their branch staff.

The next seismic shift in branch operations started first with WaMu’s “Occasio” branch where staff were required to work as tellers and develop productive relationships with members. This shift in operations was made possible by the introduction of cash dispensers allowing staff to spend more time advising and selling.

The next shift occurred about two years ago with the integration of PTMs to replace on-site tellers and focus all staff on relationship building. This most recent evolution has created a number of sifts in staff roles:

Staff members working in a branch are expected to think much more holistically about their jobs and members than in the past. They must be self-starters, extroverts, and think like an entrepreneur to be successful. They must have a clear understanding of the brand, live it, and be able to explain how the branch design and layout reinforces the brand promise.

Along with these new responsibilities comes the need to provide a physical environment that promotes staff success. Bring the brand experience into the back offices so staff members feel their value and can live the brand in every part of the branch.

Provide work environments that promote member engagement, partnering and efficiency of movement by 1) using round desktops rather than square; 2) standup greeting and cash transaction functions rather than sit-down; 3) positioning staff for easy member access and interaction, with varying levels of privacy, messaging that augments their product introduction, and storytelling to enhance the connection to community and bond; 5) employing easy-to-use technologies in the right places; and 6) a wow environment where they are proud to come to work every day.

While the rate of branch evolution is different for each credit union, everyone agrees that branch transactions will continue to decline at 3 percent to 7 percent per year. Inevitably, every future branch will be 90 percent focused on member development and 10 percent on transactions. After all the hype about the latest branch delivery technology, it gets back to relationship building – people engaging with people.

While we develop highly efficient branch prototypes, we must remember that branch performance is driven by how effectively staff and members engage. Working in a branch holds much more promise to staff than it did in the past—more interesting work, great positive impact on customer’s lives, and a well-paid career. For the credit union, it can mean high ROI and a unique and lasting brand experience that carries through all delivery channels.

Paul Seibert, CMC, is VP/financial design for CUES Supplier member EHS, a Nelson Company, Seattle.