Thanks to mobile technology, consumers no longer have to walk into their bank branch to conduct a transaction or even to purchase a product. According to research by Bain & Co., U.S. banks already sell 41% of their products digitally. In the U.K., the figure is even higher: 59%.

While it may seem counterintuitive, the rise of digital banking makes human interactions—in branches and through contact centers—more important than ever. Banks recognize the need for a new approach, one that focuses less on transactional product pushing and more on creating customer experiences with positive outcomes. Bank employees are at the heart of that effort.

As digital sales increase, banks have an opportunity to redefine the role of brick-and-mortar branches. At leading banks, branches are becoming something more than just venues for executing transactions. They’re places where employees provide personalized customer experiences with services including financial advice, problem-solving and even specifically to help customers make the transition to digital banking.

Merging with Technology
Humans, using their empathy and analytical skills, can connect with customers in ways that robots and algorithms can’t — at least for now. Adobe Stock

Humans, using their empathy and analytical skills, can connect with customers in ways that robots and algorithms can’t—at least for now. Front-line employees were once thought of primarily as salespeople peddling products. But they are increasingly becoming counselors who understand the complexities of everyday life and dispense advice and explain financial options accordingly.

Bank executives embarking on the transformation from a transactional culture to an advisory one can start by asking whether they are directing front-line staff to focus too heavily on near-term revenue targets. Such directives can induce bad behavior. Setting sales targets for specific products can encourage employees to push services that customers don’t want, don’t need or can’t afford.

Are banks designing and packaging their products clearly? Or are they confusing their customers? One practice that can baffle customers is bundling, the grouping together of multiple products for one overall price. This can leave customers in the dark about exactly what they’re buying and how much they’re paying for it. If a particular everyday banking solution requires lengthy explanations prior to acquisition or use, chances are the design of the application process or product itself is too complex.

The best source of potential improvement of a bank’s selling practices can be the customers themselves, but banks tend to view customer feedback or complaints in isolation. Many banks lack adequate systems for dealing with an aggregation of grievances and for making sure top management knows about them and takes steps to address them. Major banks have begun building systems that enable them to get to the root of the problems—and fix them.

This new customer-centric approach requires a significant change in the way banks hire, train, supervise, motivate and pay employees—particularly those working at branches and contact centers. Now that customers have ready access to multiple channels, branch staff can play a critical role in a sales process that may—and likely will—start or end outside the branch.

Big banks have now recognized the importance of rewarding employees for serving customers. In January, following a $185 million settlement with regulators, Wells Fargo introduced a compensation plan that no longer ties pay to the volume of products its employees sell. Employees will now be rewarded, in part, by how well they score on measures of customer satisfaction.

One large U.K. bank has abolished volume sales targets and now tracks how well employees satisfy customers, how many interactions they have with clients and how many customers they have helped migrate to digital banking. A leading Australian bank motivates its employees with the mantra of “self-service is good service.”

Banks don’t need to wait for regulators to knock on the door before they review their culture, improve their sales practice and transform employee compensation. Retail banks have a powerful incentive to act now. Prompted by the rapid evolution of digital interactions, banks can take this moment to redefine themselves as service-oriented organizations that truly understand their customers and put their needs first.

Richard Fleming

Richard Fleming

Richard Fleming is a New York-based partner at Bain & Co.

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Joe Fielding

Joe Fielding

Joe Fielding is a New York-based partner at Bain & Co.

BankThink submission guidelines

Want to contribute to BankThink, American Banker's platform for informed opinion about the ideas, trends and events reshaping financial services? View our detailed submission criteria and instructions.