One number from the most recent Fiserv Expectations & Experiences research stands out in illustrating the changing relationship people have with their banking branches: Among those who visited a branch in the past month, 53 percent did so to deposit a check. But that number is dropping.
Depositing a check is still the top reason for branch visits, according to Expectations & Experiences: Channels and New Entrants but it continues a steady decline from 72 percent just two years ago. The second most frequently cited reason for visiting a branch, withdrawing cash, also has declined, from 46 percent in 2017 to 41 percent this year.
Why are we seeing those changes? People have multiple channels to choose from, and that's affecting how, when and why they interact with branches. Digital capabilities, such as remote deposit capture, also are influencing branch visits.
It's important to note the typical consumer does not necessarily eliminate a channel when adopting new technology. I use mobile banking to make remote deposits, transfer money and check balances. But I use my online access to balance my account and pay bills at my desk.
The same applies to the branch. The Expectations & Experiences research found that 50 percent of consumers visited the branch in the past month, with the majority visiting one to two times.
The key questions are: How do financial institutions meet the rising expectations of those consumers when they visit? How do banks and credit unions transform their branches so in-person experiences are consistent with all other channels?
Here are six steps that can lead to the answers.
1. Set a Benchmark
As part of your branch transformation, you'll want to see how you've performed vs. peers in metrics such as revenue and assets per full-time employee, revenue per branch, core deposits per branch and accounts per office. Understanding your gaps in those metrics allows you to quantify the financial effect of improved performance and can be crucial in securing budget approval for the transformation project.
2. Be Clear About Your Branch Strategy in Specific Markets
Not all branches and markets are the same. Leveraging analytics will allow you to better understand the markets you serve and the best ways to optimize each branch in your network.
Data, such as market insights and individual branch performance, can help you identify candidates for transformation – the low performers in high potential markets.
You also might find cost savings through consolidation. Do you have poor performing offices in markets with limited opportunity? Has the shift to digital channels made two branches in the same city unnecessary?
3. Define Your Staffing Needs
With the shift from in-person to digital transactions, the roles of staff members are evolving. Employees need to present a universal banker approach to serve customers immediately, no matter what their request may be, and not pass them off to other associates.
High-growth markets, especially those focused on customer acquisition, require robust sales skills and leaders who are not satisfied sitting in an office waiting for business to walk in. In saturated markets where retention and cross-sales are crucial, you'll need customer service all-stars who are skilled at building strong client relationships.
4. Plan Your Space and Technology Needs
Branch transformation is a complex process that includes technology needs and architectural design.
The technology in a branch transformation can include interactive teller machines as well as secure in-branch Wi-Fi to let bankers interact with clients through multiple devices anywhere in the branch. Architectural design identifies the right square footage and format for unique markets and can include anything from community meeting rooms to spaces for yoga classes.
5. Anticipate Consumer Expectations
You are data rich. Don't be insight poor.
Regardless of the channels people use, their transactions are building data. For instance, a change in payroll source with a higher deposit amount could indicate a job change. Wish your customer congratulations and offer support navigating how to handle retirement accounts at the previous employer, opening the door to a new wealth management client.
Analyzing data from various sources to interpret needs is critical in today's market, helping you meet consumer expectations across all channels, including the branch. By doing that, you can increase wallet share and retention of clients.
6. Measure Your Progress
One of my favorite sayings is that if you don't measure it, it didn't happen. That is true of transformation.
Measure customer experience through surveys, increased wallet share, channel use and cross-sales, and measure sales effectiveness and productivity through comparisons to your original benchmarks.
Simply redesigning the branch isn't the goal. The priority is customer satisfaction and improved efficiency.
The Path to Transformation
The challenge at the heart of branch transformation is that there are so many options and places to begin. You can start through technology or redesigning the physical space. You can review the culture of the organization and initiate changes from there.
But the true starting point for any transformation is with the people who turn to you for financial services. True transformation starts with building a business strategy around consumer preferences and finding ways to continuously meet their evolving expectations across every channel.