4 minute read
By Kerim Tumay
Posted in Customer Engagement
COVID-19 has caused significant constraints on the bank branch channel with temporary closures and service limits—while moving nearly half of the branch interactions to digital channels and contact centers.
These developments present banking leaders with new risks and strategic challenges for realigning branch delivery and resources.
A recent survey of Kiran Analytics, Verint’s branch business unit, customers representing nearly 40,000 branches showed widely varied responses to the pandemic.
And when asked about how they are handling their branch staff, the answers varied. Some financial services firms have:
Regardless of how they responded, all retail banking leaders confirmed that the “human” element played a huge role in their organizations’ ability to adapt and respond to customer and staff needs in light of the pandemic.
There is no question that in-person banking in branches will be different going forward. We asked survey participants questions about the future of branch banking including:
So, what do all these changes mean for financial services firms? Let’s explore the risks, challenges and possible actions executives can take to adapt branch banking to the new normal.
These sudden and dramatic changes present financial institutions with two risks to retaining and growing their customer base:
Banking leaders need to balance these risks with the opportunity to redefine the branch experience for both the customers and the workforce in the new normal. They need to realign branch delivery with decisions driven by data and branch analytics, instead of intuition or one-size-fits-all approaches.
Let’s look at how modeling and branch analytics can help.
Assessing the Direction and Magnitude of Shifts in Customers’ Channel Usage
In the last few months during the pandemic, survey bankers reported 30-40 percent drop in branch transactions. Given this dramatic drop, and anticipation of a slow recovery, you might be thinking of closing or consolidating some branches. If you do close a branch in a specific market:
Modeling the direction and magnitude of the shifts in work content can help analyze the impact of changes within each market in order to properly staff the branches and meet customer demand.
Temporary branch closures, open hour reductions, and service restrictions are necessary to address customer and associate safety at this time. But, what happens when post-pandemic budgetary constraints require assessing what-if scenarios, such as:
Modeling the distribution of available FTE, by position, can help analyze the impact of changes such as branch closures, open hours adjustments, and service touchpoints to address this strategic challenge.
Slowing deposit growth, narrowing interest margins, and increasing competition from digital banks will continue to put enormous pressure on retail bank branches to improve operational efficiency.
Given nearly half of a retail bank’s operating expenses consist of facilities, workforce, and branch support, streamlining initiatives will accelerate as the pressure to increase operational efficiency intensifies.
Click here to learn about five specific initiatives for streamlining branch operations and how such initiatives, when driven by branch analytics, have paid off for branch transformation leaders.
Branch channel and workforce realignment strategy and tactics will be unique for each financial institution.
Overlaps created by mergers and acquisitions in the past few years may accelerate branch consolidation and staff reductions for some financial institutions. They may keep 10% or more of their branches closed permanently and use digital engagement to replace in-person service.
For many financial institutions, the evolution of the branch channel and workforce has been underway for a decade. They have been reducing the number of branches, deploying technology, and implementing a minimum staffing model with universal bankers in many branches. They may utilize open hours, queue configurations, and resource pooling as primary levers of their branch realignment strategy while making slight reductions to branch counts.
No matter what the realignment strategy, the complexity of the decisions will require data, proper modeling, and advanced branch analytics. Prudent banking leaders should ask themselves:
If you need help answering these questions, or support for your branch channel and workforce realignment initiatives, we can help. Contact us to learn more.
Bank Branches: There’s No Going Back to Pre-COVID Days
Branch Workforce Engagement: The Key to Improving CX in Retail Banking
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