Transforming Branches into Advice Centers: The Long Road Ahead

Everyone knows branch traffic is on the decline, forcing the fundamental role branches play to evolve. But the transition of branches from transaction factories to advisory centers built around interactions will require some tough decisions.

We are at a critical intersection in the evolution of retail banking from primarily branch-based to today’s world in which most consumer banking transactions are handled digitally. As branch transactions continue to decline, the expectation of many in the industry is that the role of the still-large number of bank and credit union branches will shift to an advisory function.

“Consumers may wonder, ‘Why would I want to go to a place where I know more than they do?'”

Let’s examine some realities about that expectation.

As digital search and self-service capabilities have improved, consumers and small business owners increasingly look to the internet, friends and social media for financial information, advice about their needs and product comparisons. If they find good advice from those sources, and if bank and credit union branch staffs are not skilled or lack the internal systems to provide the quality of information or advice consumers expect, then the branches become just fulfillment centers, at best, for people who have already identified their needs.

Perhaps they’ll wonder, “Why would I want to go to a place where I know more than they do?”

That said, consumers and small businesses still value the convenience and personal interaction in the branch channel. J.D. Power data confirms this, finding that customers who have some person-to-person contact with their banking provider are more satisfied, have higher profitability, and are more resistant to attrition. This even applies to Millennials who are confronting major financial decisions for the first time and value quality advice from proven, trustworthy partners.

Financial services leaders recognize this. They tell us, “Branches of the future will be centers of advice.” But what does this mean, operationally, and what does it take for banks to gain the high ground and deliver on this promise?

With Fewer Staff, Tough to be an Expert on Everything

Success requires a clear vision of clients and the advice they need supported by coordinated retail, marketing, training, and IT initiatives. It also requires investment in the information consumers need, the staff skills to provide it and the processes and coaching to make sure it is consistently done. These are increasingly important as banking institutions shrink staff and rely more on universal bankers.

“Most branch staff are young and with little personal financial experience. They may not have bought a home. They almost certainly have not managed a business.”

Banks and credit unions are asking branch employees to do more, know more, and shift between roles more. Most branch staff are young and have little personal financial experience. They may not have bought a home. They almost certainly have not managed a business.

While there are many good examples of bankers who, through their own study and experience, have earned their clients’ respect and trust as the go-to sources of information and advice, there are very, very few banks who have lifted all or most of their branch, field sales, or call center client-facing team members, to this level.

Read More: Busting The Three Biggest Myths About Retail Branches in Banking

Four Steps to Building a Branch Advisory Capability

Financial institutions can leverage the trust they have built over the years and deepen relationships through provision of advice-based service in their branches. To reach this level requires a full commitment and focus on four key steps:

1. Marketing and sales enablement teams need to lead design of customer journeys and identify resources. It’s not enough to say “We provide solutions” or “We’re a partner for life.” Those are taglines — sizzle without steak.

Take a deep dive into the needs of the customer segments you serve or are trying to attract. What are their likely needs: buying a home, planning for retirement, improving the cash flow of their business? Before you can develop the right tools, you need to map their financial journeys.

Start with defining the gaps between the needs of your customers and the skills your staff requires to meet those needs. Put the content in place that provides real solutions, not just empty promises.

2. Training should support a new mix of skills, delivered just in time. Training branch and call center staff to become experts in their consumer and business customers’ challenges is a lofty aspiration. Particularly in a thin-staff environment, it is very difficult to develop and maintain a high level of personal expertise in all the key areas your customers need.

Re-think your training approach to focus more on disciplined strategies that identify customer needs, then use software or other tools to present ideas and products appropriate to their customers’ situations.

“Systematic coaching is required to help staff integrate and refine the skills they learned in training. The era of ‘Three days in a classroom, then you’re good’ is over.”

The training needs to be designed and implemented as a process, not an event. Training needs to be available anytime, anyplace, so that branch staff can learn or refresh skills as they need them (think YouTube for branch sales and service). Systematic coaching is required to help staff integrate and refine the skills they learned in training. The era of “Three days in a classroom, then you’re good” is over.

3. IT, with support from marketing or sales, must put the right tools on the front-line. New tools are needed to guide front-line staff so they can more easily anticipate and identify needs and present appropriate ideas confidently. Some specific requirements:

  • Integrate data from all relevant banking systems so front-line staff can see their customers’ full relationships and opportunities to ask additional questions.
  • Provide industry information to build front-line staff knowledge of the challenges their business clients face.
  • Develop or acquire dynamic conversation support software that guides front-line staff through consumer and business discovery conversations and supports presentation of relevant ideas and products, increasing consistency, value, and opportunity identification.
  • Integrate into websites and social media “self-service” tools and information that address customers’ and prospects’ financial challenges and questions.Too many financial institutions shy away from implementing this technology because of internal data warehouse or CRM limitations, or over-reliance on their core providers to drive new service initiatives. The good news is that these tools —which were only affordable by the largest financial institutions just a short while ago — are now readily accessible for community and mid-size financial institutions from third-party providers that integrate with core systems software.

4. Retail management needs to drive implementation with revised metrics and sales management protocols. Better software support and data will lead to deeper and more profitable customer relationships and the metrics and dashboards available will make it much easier to identify both opportunities and problems in service delivery.

For example, managers will be able to see how their staff are performing against the activities and relationship-deepening conversations required to make their branches successful. How many people walked into their branches — and what happened? To what extent and with what outcomes is the institution engaging its existing branch-using customers? Is it consistently asking the appropriate questions and presenting the right scenarios?

Further, how do the most and least productive representatives manage their sales activities? What are the differences, and where are the best opportunities to coach them? Are they capturing logical cross-sell opportunities? Are there best practices that emerge? Are there individual coaching approaches that emerge?

Getting from where your bank or credit union is now to having true “centers of advice” may seem daunting, but the good news is that there is a proliferation of “plug and play” resources available to help financial institutions create information libraries, sales support tools, and coaching tools. These can help you get up the curve quickly.

David Kerstein is President of Peak Performance Consulting Group, and Nick Miller is president of Clarity Advantage. They can be reached at [email protected] and [email protected]

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