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The Problem With The Branch Transformation Journey

A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors

One of those other analyst firms blogged recently about banks’ branch transformation journeys. The post contained a graphic depicting a 2×2 matrix showing how many banks move from the lower left quadrant to the upper left quadrant on their way to the desired state, the upper right quadrant.


Source: Celent

[There is an unwritten rule among consultants that when drawing a 2×2 matrix, the upper right quadrant is the place to be. Richard Stiennon has even written a book about this.]

My take: I don’t doubt that my friends at the other analyst firm are correct in their assessment of how banks progress through this journey. But banks’ vision (and goals) for this journey is all wrong.


Increasing transaction automation is the last thing banks should be striving for.

Banks’ right-channeling goal should be: If a transaction can be automated, it should be conducted anywhere BUT the branch.

Why in the world would someone want to go to a bank branch to interact with a piece of technology when there are ATMs, PC monitors, tablets, and smartphones — points of interaction that exist in millions of places that aren’t branches?


Plenty of pundits talk about how the branch will — or at least should — become a place where customers can discuss their financial needs. The underlying notion behind this is that these types of interactions (which the banks, of course, see as “sales” opportunities) are “higher value” interactions. 

The “sales” label notwithstanding, I agree. 

So why would any bank invest more in enabling the automation of transactions in the branch? I hope it’s not with some sort of delusion that doing so will “free up resources” for the higher value transactions. 

Because let’s be clear about something: The resources who are processing transactions in branches are in no way able to help me or the vast majority of customers with financial guidance, advice or planning decisions. 


In planning their branch transformation journey, if a bank thinks it’s current level of branch automation is low, then it should re-label the upper quadrants — from “High” to “LOWER.”

Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Get a copy of his best-selling book, Smarter Bank: Why Money Management is More Important Than Money Movement. And don't forget to follow him on Twitter at @rshevlin.

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  1. mfriedrichs says:

    I agree and disagree—the endgame is to get to get all automatable transactions to online, and keep the branch for those rich person-to-person interactions, but in the middle game, if people are still coming to the branch to do automatable things, better to have a machine handle it then a staff member, no?

    Maybe there should be six quadrants- “LOWER” stacked on top of “High.”

  2. Scrap the grid, its not about transactions or rearranging the furniture. A focus on automation of the branch from a transaction perspective is a misplaced priority. Similarly, branches that are atheistically pleasing and serve coffee are just as empty at 11:00 on a Wednesday as a traditional branch.

    If the FI focuses on changing the purpose of the branch, which in my opinion, is to provide consultive selling, education and problem solving, then the natural automation that is necessary to support those functions and the limited number of transactions that might occur as a result of the transformed branch activities would be appropriate. The idea is not to figure out how you can best automate the limited number transactions that still originate in the branch, but how to re-energize the branch to a destination that customers and prospects would desire to visit. And it wont be for coffee or to chat about the kids. It will happen when the branch is an engaging and compelling destination for information, education and answers.

    Hey, the branches already have a genius bar, they just call it a teller line. Cut off those wood partitions and put some geniuses behind there (doing things like assisting customers in integrating online banking to their PFM or helping them in understand how debit cards work at a hotel or gas pump …) and the branch will begin to function as needed for financial institutions to make the transition for how financial services will be consumed.

  3. “Scrap the grid”? Did you have too many margaritas at lunch today? I’m a consultant. I live and die by 2×2 matrices. I can’t talk to a client without defining two dimensions, and breaking them down into two sub-dimensions.

    And if bank tellers are FIs’ “geniuses”, then FIs are in for some even harder times. That said, I’m really not trying to insult tellers. If I had any friends, I’m sure my best friends would be bank tellers.

  4. Ron, were on the same page. Actually, the tellers are geniuses but they are trained and deployed for an in-branch experience that no longer exists. So in my comment, when I said “Cut off the wood partitions and put some geniuses behind there …”, it wont be the tellers the banks have today but staff that can answer questions and fix problems specifically trained to assist virtual customers. Perhaps some tellers with the appropriate aptitude will be retrained.

    As for the fact that a consultant needs a grid, then I would recommend the X axis to be the level of virtual activity and the Y axis would be Education and Expert Advice. Every combination is positive, so that way, regardless of where the FI is on the quadrant, they wont lose …

  5. As ever I think the key point has landed in the comments. The staff / customer interaction isn’t helping you achieve your goals (even though the marketing says that’s one of the reasons you should bank with that particular FI).

    My bank here in the UK calls me every three months to offer me a “financial advice” sit down with one of their experts… but it’s not “what are you looking to do in life, how can we help you grow your net worth?” – It’s “do you want to get a car, maybe a loan would help, how about a credit card? Here have a debt product and a coffee”.

    Firstly, I don’t like coffee… secondly, take a lesson from wealth management. People want to be in a better financial situation not worse. That’s not going to change until management compensation is truly aligned with LONG TERM shareholder value… and LONG TERM shareholders should be pushing for that more at AGM’s…

    But that’s just a pipe dream.

  6. Ron, when I first started reading your piece I was afraid that we weren’t going to be on the same page. (And, there’s still a chance that we aren’t.) I agree that “if a transaction can be automated, it should be conducted anywhere BUT the branch.” The absolute last thing I want to do is walk into a bank and be greeted by an impersonal machine. If I wanted to do that, I would use the corner ATM or my smartphone.

    So, do you propose that technology should be completely removed from the branch? Personally, I don’t think so. Technology isn’t bad if it can be used to enrich the customer’s experience. A good example would be if a bank employee is being assisted with some sort of cash automation technology—that’s a different story. If it helps the employee be more engaged to my needs or better able to assist me with my transaction that’s not a bad thing.

    The alternative or removing all transaction isn’t ideal. I don’t want to talk to an employee that has their head down counting cash or possibly dealing with an emotionless touchscreen. Is automation within the branch wrong? Thoughts?

  7. Matt: I’m not advocating that technology be removed from the branches. Instead, I’m saying the GOAL of branch transformation should be that a LOW percentage of transactions be handled “automatically.” The chart and blog post from that other analyst firm implied that the path to branch transformation was through an increase in transaction automation. I want those transactions out of the branch altogether.

    For the remaining interactions (not transactions), technology could surely have a role. Maybe having an advisor and customer sitting down to a Microsoft Surface is a possibility some day. But I think the use of technology in these advice/guidance/sales types of interactions have not matured very far.

  8. Dear All,

    we are now in June 2015 – exactly 2 years after your post.
    What is your regard on the post and the comments now in 2015?



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