The effort that Extraco Banks puts into hiring branch staff is hard to believe. Those who apply to be a teller go through as many as nine interviews with managers, peers and subordinates. Prospective employees must provide 15 references, and all are methodically checked.

"I'm glad I already work here. I probably wouldn't get hired," joked Sandra Dixon, the executive vice president of operations at the Temple, Texas, bank.

This rigorous selection process for what used to be considered one of the lowliest posts in banking clearly illustrates how much things have changed. Front-line staff are becoming the stars. Though bankers and consultants started preaching this long ago, it mostly amounted to lip service. Few executed well or even tried to.

After years of experimentation, some banks are finding the right mix of technology, ambiance and human interaction. The most effective formula varies, and the only constant is that there are no absolutes. Everything is subject to scrutiny.

The percentage of consumers who favor the Internet as their main venue for transacting grew from 45% in 2009 to 51% last year, according to J.D. Power and Associates in Westlake Village, Calif. Those preferring branches fell from 36% to 29% over that same period.

This is precisely why Extraco has focused on changing the human interaction at its branches using a technique it patented, called "swarm." The concept brings tellers out from behind the line to mingle with customers. Swarmers are allowed to offer loans up to $100,000 to qualified clients.

In hiring, Extraco favors those with college degrees on the front line, and pays them more than the typical teller, which it can afford to do after having reduced the number of workers per branch by up to three full-time equivalents. Extraco is teaching other banks how to swarm and just completed its first half-day training session.

One lesson the $1.1 billion-asset Extraco learned was that a concierge desk, part of many branch redesigns industrywide, was not a good fit. It took one customer with a time-intensive query to keep the branch from achieving its goal of greeting everyone within several seconds of walking through the door. That holds true for other banks as well.

"Whether it's a greeting station or an assigned individual, the problem is they'll get tied up with somebody," said Michael Beird, the director of banking services at J.D. Power. "Then five more customers come in who didn't get greeted, and everybody else in the branch is going, 'That's not my job.' "

A simple "hello" means a lot. J.D. Power found that customers who were greeted upon entering a branch and waited 11 or more minutes to be helped were nearly as satisfied with the overall experience as those who didn't wait at all but who were not acknowledged when they walked in.

"We all think if a customer doesn't wait at all, that's the pinnacle of satisfaction," Beird said. "The reality is, if you're not acknowledged, even if you don't wait at all, it doesn't guarantee you're going to get the highest level of satisfaction."

Webster Financial Corp. in Waterbury, Conn., is changing its branch strategy, but less dramatically than Extraco. It is opting against a major redesign or installing a lot of new technology, partially because the $18 billion-asset company has 180 branches.

Webster made people the centerpiece. It recently hired a consultant to gauge tellers' competency and comfort level with tasks beyond those typical for the job. The goal is to have them diagnose clients' financial needs and offer solutions.

"We've designed some programs to address the competency levels and also the comfort level," said Anne Slattery, executive vice president of retail banking. "And, in fact, we will be introducing certification programs as we go forward." Initially, the focus is on training branch managers to become experts in small business, because that customer segment is a priority. But the training will expand to include other branch employees.

Sterling Financial Corp. in Spokane, Wash., has trained managers at its 178 branches to think like small-business bankers. Early on, Sterling had sales consultants go out on calls with the branch managers and act as coaches.

"We didn't just teach people and throw them out to the wolves," said Brian Read, the $9.5 billion-asset company's retail banking executive. He said checking accounts grew 18% in 2009, the program's first year.

Sterling's tellers remain mostly in a traditional role, doing basic transactions. But the bank is training them to handle some sales functions, including opening new accounts. They are coached to be on the alert for opportunities to offer other products and services.

Sterling also learned how to create effective incentives for cross-selling. Its approach gives tellers extra pay for bringing a client over to a platform banker to discuss a need recognized during a routine transaction. "That seems to be really working well," Read said. "I think in the past, where everything was contingent on some piece of business being closed, that can cause some adverse impacts on people's willingness to keep trying."

Teller turnover has been cut in half from 40% four years ago. Incentive plans that feel achievable, more recognition for good work, and clearer career paths have helped immensely, said Debbie Meekins, Sterling's chief production officer.

Cullen/Frost Bankers Inc. in San Antonio is 10 years into a branch strategy that involves treating customers like royalty. "We open the door for them, and then we greet them," said Paul Olivier, the executive vice president of consumer banking.

The strategy seems to be working. Cullen/Frost is the highest-scoring bank nationwide in customer satisfaction, said J.D. Power's Beird. "It has the second highest incidence rate on maintenance fees, so it's not like they're giving it away for free."

Some observers point to Frost as evidence that customers are willing to pay for the right experience. "We give a square deal, excellence at a fair price," Olivier said.

Of Frost's 112 branches, 22 have a new design, with an open floor plan, concierge desk and a special Frost Room, lined with smooth stone from floor to 18-foot ceiling. This lounge area is made to feel like an old bank on courthouse square, Olivier said. Some branches also include specially commissioned folk art portraying real cowboys and cowgirls who work the ranches in Texas.

Extravagance is certainly not a requirement in modern branch design, but it's a given that the look and feel of the space contributes a lot to the customer experience. Appearance accounts for almost half of customers' satisfaction with branch facilities, according to J.D. Power data. "Invest some money in a fresh coat of paint, replace the carpeting, whatever it takes," Beird said. "That's a lot cheaper than building a new branch."

Having a coffee lounge or a play area for kids isn't the must it might have seemed in the industry not so long ago. It's possible to overinvest in such extras and see no return in terms of added business, said Bob Meara, an analyst at the Boston research firm Celent.

That's why figuring out what each market needs is crucial. For instance, downtown branches might be suited to having lounges if they are a destination people visit on foot. Not so with suburban branches.

To assess whether the sizes and locations of its branches were right for the markets it serves, Webster devised an algorithm that takes into account how customers use a particular branch and whether they use others as well. The analysis also factors in details about the market, how much of the local deposits the branch holds and how many competitors it has. "Because we go from Westchester, N.Y., to Boston we have urban, suburban and rural branches, so each of them has to be looked at differently, because customers behave differently," Slattery said.

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