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2019 Trends and Opportunities In Branch Banking

In today’s banking environment, with the focus on digital transformation and the death of branches having been declared, making a case for investment in branch banking solutions can seem challenging. However, far from being dead, branch banking is instead evolving to meet the changing needs of the customer and to focus on today’s banking strategies. Let’s call it the renaissance of modern branch banking.


In fact, there are significant returns in transforming your branch strategy if you focus on two key elements. First, ensure you have the right people with the right skills in the branch at the right time to maximize customer engagement. Second, simplify non-customer branch administration tasks, so the fewer remaining employees have more time to focus on helping those customers.


To understand the details, benefits, and drivers of investing in branch transformation, let’s examine some of the challenges that many banks are facing today and the corresponding opportunities presented as a result. By studying these in detail, we can build a convincing case for investing in solutions that help banks optimize network staffing and empower employee productivity.


  1. Market Trends:
  2. Shifts in routine transaction volumes to digital
  3. Changes in needed roles and skills
  4. Focus on premium, high-touch retail experiences


  1. Opportunities:
  2. Create more nimble staffing models
  3. Improve employee scheduling flexibility
  4. Simplify non-customer branch activities and ensure branch excellence


1. Market Trends


1.A. Market Trends – Shifts in routine transaction volumes to digital

Despite many dire predictions, branches are not going away. However, given recent shifts in transaction volumes, they are in need of a strategic overhaul to meet new demands. Over the past few years, the rise of mobile and online banking, including mobile deposit, has led to fewer routine transactions at the teller line and fewer routine sales and service requests to the platform at the branch.

The initial reaction by many banks was to close branches and reduce staff by an average of three employees per branch.1 Unfortunately, client experiences suffered, and many banks have not seen financial benefits from their branch efficiency initiatives. The reason this strategy failed is that executives had “to balance between conflicting priorities–costs must be contained at the same time that revenue targets get higher.”2 So although costs were reduced, sales and Net Promoter Scores (NPS or client service scores) also declined.

With less staff working, many branches struggled with longer waits or poor experiences. Additionally, the remaining bankers were now dealing with more complex service and sales interactions, which are not easily completed via the contact center, online, or on mobile; as a result, they were spending less time discussing customers’ financial needs and goals to drive additional sales. Ultimately, any savings from staff reduction were counterbalanced by losing sales and customers due to frustrating experiences.

 This self-fulfilling downward trend, however, is not the whole story. According to David Kerstein of Peak Performance Consulting Group, “Banks and credit unions still open about 1,000 new branches a year.”3 So why are banks opening new branches and investing in existing branch experiences if the branch is dead? It’s because “many consumers still prefer to speak to a banking officer for advice involving significant financial decisions even though they may have started their research online.”4 This pattern also includes millennials who “use branches with roughly the same frequency as the average bank customer. Also, while it may change in the future, 85-90 percent of all new accounts are opened in branches, not online”3, and over 46 percent believe technology cannot replace the need for a branch nearby.1





1.B.  Market Trends – Changes in needed roles and skills

Branches are here to stay, but the key roles and skills required to staff those branches are shifting. Studies show that customers prefer in-person service for certain types of interactions:

“The call center may have answers to customers’ short questions, but when it comes to bigger financial needs, 77 percent of customers prefer to visit the branch. The most common branch banking scenarios cited by customers include investment advice, financial planning and new account openings — big life decisions that consumers don’t want to make without the support and expertise of their banks.”5

Given that there are fewer teller transactions and that customers are expecting someone that can solve their more complex service issue, help open an account, or provide financial advice, what roles are needed? The answer is not simply fewer tellers. Today’s branches need staff members who have experience with problem resolution and more complex selling, but who can also jump on the teller line if needed or are trained and certified for other roles and activities at the branch, like opening or closing.  This is why you see so many “universal banker” programs to cross-train staff for this very challenge. 

Another challenge is that scheduling these multi-skilled colleagues is more complex. They need to be available when customers want to come into the branch, which is not always 9-5, Monday to Friday. Banks also need some of these universal bankers to float between multiple branches for the most efficient staffing models. These factors can make it more difficult to recruit, staff, and retain these roles, especially during one of the highest employment periods in recent US history.

In addition to universal bankers, banks are also focused on staffing specialist positions, who might use the branch as a home base or consult location, because "many higher margin products also are more successful with direct human interaction.”2   These Small Business, Wealth & Brokerage, and Mortgage bankers also introduce two critical elements for differentiating branch experiences. First, to capture the revenue from higher margin products, you need an easy way for customers to schedule time with these specialists, like an online scheduling application. Secondly, you need a more refined experience when you meet with these customers at the branch. We will discuss the scheduling element below in section 2.B. A wealth client, however, certainly does not want to go to a run-down branch that looks like it has not been updated in decades, which introduces the next trend in banking—the premier, high-touch retail experience. 





1.C.  Market Trends – Focus on premium, high-touch retail experiences

According to Reginald Jones, Samsung’s head of sales for financial services, “Banks are no longer competing against one another for experience.… Now banks are competing with every other retail experience that their customers have taken part in throughout the day, week or even month.” Think Apple, Nordstrom, Whole Foods, and similar premium retail experiences. “While banking side-by-side was once thought of as a luxury, banks realize that to keep up with other retail experiences, that needs to be the norm.” (Tanya Macheel)6 Banks want to ensure customers see them as a premier brand and have a high-touch experience with trusted professional staff. To that end, we see banks hiring retail store design teams to re-configure the layouts, branding, and branch working flows. For example, in Singapore, DBS incorporated human-centered design (HCD) into its flagship branch at Marina Bay Financial Center and overhauled the traditional retail banking experience. “The intent was to optimize customers’ time and to make the branch visit simple and delightful. These kinds of transformations have reduced customer wait time in branches by more than 10 percent.”4



2. Opportunities


2.A.  Opportunities - Create more nimble staffing models

Because of the market changes above, there are a number of opportunities banks can take advantage of to drive additional returns from the branch network. Again, the opportunities generally fall into two categories: optimizing network staffing models and empowering employee productivity. Both of these approaches have a demonstrable return with hard benefits like increased sales and soft benefits like increased NPS and employee satisfaction. Let’s start by considering network staffing optimization. As you may recall, banks need to ensure that they have the right people with the right skills in the branch at the right time for premier experiences. However, with so few branch staff and so many branch formats and new role types, how do you put that into practice? There are typically a number of ways to get started optimizing network staffing but, ideally, you want to start by having a good understanding of the types and volumes of activities that each role will be performing, the cyclicality, and regularity of these at the varying locations.


Fortunately for banks, major retailers have paved the way to staffing optimization, driven by the impact of online retail on brick-and-mortar business and store staffing models. Facing similar challenges as branch banks, retailers pushed technology providers to develop and refine powerful workforce management tools which include some pretty impressive forecasting features. In many cases, these tools can get your forecasting accuracy above 90 percent. Some of these tools even marry-up capabilities for capturing and refining the labor standard data mentioned above through their integrated task or activity management capabilities. They also sport some pretty useful forecasting features especially if you were doing this by hand or with an old home-grown application.  A few of the other key features are:

  • Dynamic forecasting
  • Forecasting what-if scenarios
  • Machine learning models (a form of Artificial Intelligence or AI)
  • Data visualization and analytics tools
  • Support for multi-skill colleague scheduling (splitting time between teller and platform)
  • Support for floater & part-time staff pools across multiple branches in the network
  • Support for roaming specialists (SMB, Mortgage, Wealth)
  • The ability to apply granular jurisdictional rules for compliance with local labor laws. 


What’s also exciting about this opportunity is that the benefits of these modern forecasting capabilities have already been proven in the field by some banks, and major retailers, who generally adopted the technology ahead of banks. The benefits typically include:

  • An increase in sales from 0.8 percent up to 5 percent.7
  • A savings of 10-20% in labor costs when compared to manual efforts.8
  • A boost in customer service scores of up to 3.9 percent.7


2.B.  Opportunities - Improve employee scheduling flexibility

To be clear, better branch staff forecasting is only part of the optimization equation. Banks also need to make it easier for managers and colleagues to engage in the process, in order to more easily fill these flexible schedules with the right people. To ensure maximum optimization of the branch network, banks also need to free up time by simplifying non-customer branch activities to ensure unscheduled activities do not invalidate forecasts. See section 2.C. for more on that. 

The new staffing models needed for these high-touch, universal banker experiences make the scheduling process less static and more variable, which introduces additional challenges.

  • Most managers are not forecasting or scheduling experts and need an easy-to-use solution that guides them through the process.
  • Typical bank scheduling tools and processes are manual or home-grown systems which lack the modern user interfaces and advanced algorithms to offer staff flexibility and ease-of-use when filling the variable schedules.
  • Many tools do not allow colleagues to easily trade or swap shifts or to bid on available shifts.

Here again, banks can benefit from adopting the latest scheduling technology available. These modern solutions offer user-centric designs, drag-and-drop capabilities for managers, and mobile-first functionality for employee self-service. They also include integrated task management tools. This allows for the unification of forecasting/scheduling and real-time activity management, giving employees a single platform to access both their scheduling and work/task priorities. These solutions also make it easier to manage schedules on the fly; for example, by broadcasting alerts to employee phones, smaller branches fill open slots quickly and avoid long wait times and negative experiences. These technologies also allow you to incorporate and optimize scheduling based on skills, certificates, and employee preferences. Not only does this make scheduling the right people easier for managers, but it also increases employee satisfaction and reduces turnover. Employees can more easily view schedules, request changes, and initiate shift swaps with qualified colleagues.

In short, these scheduling capabilities offer significant hard and soft benefits including: 7

  • Up to a 5-hour reduction per week per manager for store scheduling.
  • Up to 15 hours per week given back to colleagues for more time to sell.
  • Up to an 8 percent reduction in crew turnover rate.

In addition to scheduling, banks should also ensure that any time and attendance applications for the branches have the same ease of use and flexibility for colleagues. Time and attendance capability should also operate natively within the forecasting and scheduling solution or easily integrated so that banks can audit adherence to published schedules easily, ensuring maximum optimization of branch network staffing.


2.C.  Opportunities - Simplify non-customer branch activities and ensure excellence

            As mentioned above, improving forecasting and optimizing staff schedules is only part of creating the new ultra-efficient, high-touch branch experience. The final opportunity is in simplifying non-customer activities and ensuring operational excellence through three key process improvements.

The first step is to funnel and prioritize all non-customer branch activity tasks, requests, and follow-up actions into a dashboard, on the same platform managers and employees are using to manage their schedules and time and attendance. This allows forecasters and managers to accurately identify the resources needed for these non-customer requests and their impact on branch staffing optimization. This information can be used to drive changes in the types, volume, priority, and time allocated for these non-customer tasks. Improving the efficiency of non-customer activities allows colleagues to devote more time to actual customer interactions. 

Similarly, using that same dashboard to digitize any non-customer branch request forms is critical for simplification and branch excellence. Again, the goal is to simplify all non-customer activities, making it easier for colleagues to access and complete non-customer forms. Digitizing forms ensure that the correct versions are immediately available to staff and enables you to set automatic escalation and routing, streamlining the process.

Finally, to ensure excellence with brand, security, and merchandising standards, banks must provide easy-to-use mobile inspection solutions for regional managers and operations review teams. As many banks know, your brand is one of your most valuable assets. Easy-to-use mobile inspection solutions and processes that assign critical follow-up activities directly to colleagues’ work dashboard can help protect brand equity. These inspection solutions make it simple to ensure brand standards, as well as inspect elements like cleanliness and maintenance or security that are essential for a premium experience. They can also drive routing, prioritization, and real-time response to any issues identified. 



So, what are the next steps for bank executives who would like to take advantages of the opportunities above and start a branch renaissance of their own? As someone who worked in banking for 15 years and spent a good part of that time developing business cases for technology investment, I would recommend two tracks. The first is to begin to socialize some of your thoughts. This way, you can get a good understanding of all the key stakeholders which opportunities discussed above resonate the most within your organization. At the same time, I would reach out to analysts and vendors to begin to absorb information from them on the opportunities, gathering the 3rd party stats and validation needed in most business case requests for funding. Again, given retailers have capitalized on the opportunities already, there is a raft of proven benefits that can be referenced in your business case. So, be sure to check out what is happening within that industry and their approach to the parallel trends you are experiencing in banking.




  7. Reflexis Case Studies, and upon request








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