Rauly Butler, the retail banking manager at Mechanics Bank in Richmond, Calif., calls the bank's recent investment in sophisticated scheduling technology a "no-brainer."
The technology should save the $2.8 billion-asset Mechanics $865,000 a year by fine-tuning the scheduling of its 110 tellers, Butler says. And because the bank essentially rents the software, the upfront investment was minimal. "It's a rounding error," Butler says.
As most banks look forward to a long period of tight cost controls, so-called "workforce optimization" software could be a beacon. It can improve customer service while cutting costs, whether in the branch, at the call center or in the back office, said Santiago Patino, senior director of Cornerstone Advisors Inc., in Scottsdale, Ariz.
Most banks are still in an IT-spending lockdown, but the smart ones, he says, will invest in workforce optimization technology once their budgets loosen up, in part because it's cheaper than ever. Butler agrees. "The only way for banks to grow their revenue in this economy is to either grab some market share, which is expensive, or control and reduce your expenses," says the executive, who expects Mechanics Bank's system to go into use on Aug. 1, after training is completed. "I'd think there will be a rush to this sort of thing."
Vendors say interest is way up. "We're definitely seeing a big surge in demand," says Simon Angove, chief executive of GMT Corp., in Norcross, Ga. In the fourth quarter, GMT signed two of the top five retail banks in North America as clients. Verint Systems Inc., in Melville, N.Y., also says it is seeing more demand from existing clients that want to expand their workforce-optimization capabilities. The technology is often implemented first in branches or call centers, and later expanded to back-office operations.
Workforce optimization technology has been around for years and many large banks use it. Using sophisticated models, it forecasts peaks and dips in customer demand and produces pinpoint scheduling so that, for instance, a branch's tellers are not twiddling their thumbs one day and facing lines out the door the next.
One of the intriguing developments in the field is the emergence of vendor-hosted, or "cloud" solutions. Banks with deep pockets can afford to install and maintain the technology in-house. But banks can now spend much less to plug in to a system that is run by vendors. (See related story on page 14.) "You rent the service from the cloud and pay as you go," says Angove.
That could open the field up to many smaller banks, vendors say. GMT, for instance, unveiled its hosted solution in November; Mechanics Bank is a client. "I know it's not fashionable to spend money right now," says Butler. "But scheduling programs, especially Web-based ones, don't have a lot of up-front cost and always have a return on investment in the first year."
For South Carolina Bank and Trust in Columbia, the primary goal when it adopted the technology three years ago was to improve service quality in its call center. The $2.8 billion-asset institution had considered hiring the equivalent of three additional full-time customer service representatives in order to boost service levels. That would have cost the bank $100,000 a year in pay and benefits, says Rachel Miller, director of the contact center.
But the workforce optimization software, which the bank installed in-house, has achieved the results the bank wanted for less than the cost of the new hires. It has helped SCBT slash its dropped call rate by 66 percent and reduce its call service time by 77 percent, according to the bank.
An obvious selling point for vendors is that branch traffic is declining as more and more customers opt to bank remotely. Meanwhile, in the back office, there are fewer checks to process because more customers are using debit cards and paying bills online. "You can't just sit there with your same staff level and not think about the future," says Darryl Demos, general manager of Verint's enterprise solutions group.
Mechanics will consider expanding its use of the technology if improvements in teller scheduling materialize as planned; platform bankers, operations employees, phone reps and even security guards could all end up on new schedules. "The rest of the bank will be looking closely at this," Butler says.