Branch Modernization

Branch Modernization

Many bankers today are approaching the modernization issue with a shared history. There’s a lot of baggage, which is causing indecisiveness as well as potentially crippling situations. Some bankers are afraid of being too early on the change curve. They’re anxious to avoid disruptions to existing customer business that those customers might not appreciate. If a bank is truly in need of change, some big questions they need to ask themselves would be: Why do we still have a branch in that location? Why do we still have tellers? Why, when I walk in our branch, does it look the same as it did 10 to 20 years ago? Branch modernization isn’t just a case of ‘flip a switch and all of a sudden you’re on another level’. There are prerequisites that must be met by the organization prior to any physical transformation taking place, and physical change alone is not a panacea.

These prerequisites are:

1. Market Awareness. Nothing else matters at the point of sale if your reputation, market awareness or level of convenience is poor. If no one knows who you are, it doesn’t matter what you do; customers are not coming to your branch. If there’s no awareness of your brand, nothing’s going to happen regardless of what you do. You must have already achieved a reasonable level of visibility for your institution before any physical upgrades will be successful.

2.The look and Feel of the Space. Most current management teams have been dealt their cards, so what do they do? The facility has to be open, inviting, fresh, and reasonably modern. If someone was to open your door and go into your facility, how do we not have them stop, turn around and go away? There’s an absolute level that has to be open, inviting, fresh and reasonably modern architecture, interior design, look and feel. It doesn’t really matter if you’re 4,000 sq. ft. or 1,000 sq. ft. because if you’re drab, gray, dark and old, you are already behind the curve. The gamble would be this: For example, think of a 25 year old walking into a bank, who sees dark wood, dark panels, dark carpets, and dark curtains on every window, ceiling and floor. What is that 25 year old going to do when they see that interior? They’re going to leave, and they’re not going to come back. If you don’t have a reasonable modicum of being fresh and inviting you’ve already lost them.

Think of an Apple store. Their stores are wide open, white as a cloud, it’s fresh, and it’s modern. Do your branches exude that same freshness and sense of collaboration with your walk-in business?

3. The Human Complement. Employees or Officers that do not greet, recognize, smile, engage or welcome every visitor would be your third strike – you’re done. Every single visitor to your branches should be treated as unique and special to you. If your employees don’t look up, if they’re focused on the line, if their head is down, if they’re pushing paper when a visitor approaches them, this is the antithesis of what needs to be happening. They must make eye contact, and welcome every single walk-in visitor. They must acknowledge them and, if they’re not dealing with customers at that moment, they need to talk to them. Think of Moe’s. You experience that “Welcome to Moe’s!” greeting every time you go through the door. There’s a reason they do that. Now, this approach can be overplayed, I understand that, but if your people are not engaging, and are instead behaving like traditional head down order takers, then this is another “nail in the coffin”.

So far we have discussed market awareness, the physical look and feel, and human engagement. We’re not talking about a digital branch; we’re talking about a sales and service office that has a planned human complement. That person and place have to be fresh, engaging, welcoming, and acknowledging. Finally, there is a fourth prerequisite, which dictates that every human in the facility must be aligned to the potential needs of any walk-in visitor, because these days there are not many coming in.

4. Business Process and Supporting Technology. I think of this aspect of branch activity like a fishing exercise. The people staffing your branches must be able to satisfy every single question, or request, of the walk-in customer, or walk-in visitor, with a view to engaging or “hooking” them. They will not hook the fish with a smile by saying, “Let me go get so-and-so, she usually deals with this.” They should not refer, they have to engage, they have to professionally interrogate. There are only a certain number of people that will actually take the time to physically walk into the branch today, and every person who walks in must be engaged and truly feel welcome. You have to be capable of addressing every situation that any visitor could bring up. Policy, procedure and technology have to be aligned to support the employee so that that employee can satisfy or substantially hook the walk-in visitor. If the visitor has to leave for whatever reason, that visitor should feel that all their needs have been taken care of and understood, and that the institution is and will be highly responsive. If my role is strictly that of a teller, I can’t do all that. If I’m a branch manager who’s worried about audits and compliance, and outbound sales, then I can’t do that properly.

The employee must have free mobility to walk and engage with customers whether they’re standing up in the lobby, or sitting down. They can’t be constrained by a teller line, an information desk, or a manager’s office. Those branch elements are not configured to meet the needs of every potential walk-in visitor. We can no longer afford specialized floor staff roles or areas within a branch that are too specific and therefore exclude opportunities for customer engagement.

This is the new operational model of a banking office. It is the way to design or build and re-design and re-build your people, building and operating procedures so that they can be the most cost effective, bring the highest degree of customer success, and portray your organization’s desired image in every single aspect of any branch visit.

The supporting technology in the modernized branch has to be simple, effective, convenient, and potentially self-service oriented. In terms of equipment, people, and facilities, you have to ask what yourself how you want to perform. Do you even know how you want to perform? Fundamentally, we’re talking about a community bank model which has customer relationships, service, and your people as its typical priorities. That’s been a differentiator between a community bank and a giant money center bank, and it must remain intact. And if we feel we’re going to deploy a physical banking office presence with staff, we have to ask “what are we trying to do in every single visitor situation?”

This article was written and edited by Tom Grottke, CEO of The NBS Group, LLC and Mark Charette, CEO of Solidus, Inc. NBS and Solidus are strategic partners; NBS are a full-service management consulting firm that has partnered with financial institutions to provide solutions to complex challenges for over 25 years. Solidus is a design-build firm pioneering new branch prototypes and an integrated strategy that harnesses demographic data, technology, and environmental branding and merchandising.