CHICAGO What's a bank to do when its oldest sales channel is expected to be eclipsed by younger and cheaper digital alternatives but not for a number of years?
This existential dilemma continues to unsettle bankers across the country looking to find a new role for their branches as transaction volume dips but sales continue to be made there.
The topic secured a standing-room-only crowd at a session during BAI's Retail Delivery conference in Chicago this week. What to do with branches remains a point of fierce debate, but the need to do something is abundantly clear to banks of all sizes. A new Celent report found that more than half of surveyed financial institutions ranked branch transformation as an important initiative.
Banks such as Wells Fargo, PNC, and Regions have been testing newer branch concepts. Video tellers, cash recyclers and tablets are some of the tools banks are using to try to convert their branches into leaner sales-and-service hubs. In all cases, financial institutions are investing in tech to bring down operating costs while still making sure the right experts are there when consumers needs them.
But the high-tech branch requires new approaches to layout, personnel skills, and consumer education, several bankers said during the trade show.
In the trendy universal banker concept, which is warmly embraced by the industry, one person is supposed to be able to do everything from demonstrate how a mobile app works to originating a loan. However, bankers are already discovering through their pilot testing that the layout of the branch affects the work of these more skilled and likely better paid employees.
"I don't think universal bankers will be that successful in traditional layouts," said Patrick Myron, senior vice president of retail network strategy and sales analytics at the $6 billion-asset Rockland Trust Co. in Massachusetts.
Myron said an open layout, with no velvet teller line ropes, will help universal employees roam around and interact with consumers.
Shawn Bradley, executive vice president of consumer insights and reporting, direct marketing and retail strategy and design at Regions, said bankers need to be front and center at the branch to help consumers navigate a potentially confusing experience.
Hiring for the universal banker position, however, remains a work in progress for many banks. Human resources officers often don't know what the term means. And training tellers to be universal bankers "is pretty tough," said Myron. "Some can do it."
Compensation packages could also affect the success of the new branch model. If hiring packages offer employees 100% commission, there is a risk the universal bankers will be too aggressive in pursuing sales, for example. "Study the right mix of sales versus service," advised Myron.
Branch employees are often tasked to also train consumers on new technologies. Regions, which recently opened a branch that includes video teller kiosks manufactured by NCR, said employees' ability to steer consumers through the new experience is paramount. Still, Bradley also said it is most important to let consumers choose which kind of interaction is best for them.
"I hate the term 'migrating,'" said Bradley. "It sounds like we are pushing customers to a choice they don't want to make themselves."
One banker shared a view on why the bank branch isn't going away: it is a reassuring sign to a consumer who often picks a bank because of a branch's proximity.
"Seeing your store [gives customers a] sense of relief," said Linda Verba, executive vice president of head of service strategy at TD Bank, during a presentation. "It's an anchor."
Still, banks are advised to regularly solicit feedback about their retail channels branch, digital banking or whatever else the consumer identifies as needing refinement.
"You need to create ways for employees and for your customers to provide feedback. Feedback is a gift. If they don't tell you, they will tell someone else," Verba said.
And responding to consumer's changing needs is critical to survival.
"If you resist change, someone will run you over," she said.