How Fintechs Are Blunting the Promise of the In-Person Universal Banker
By James White, Principal Strategist, Engage fi
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Executive Summary
- Branches with universal bankers handle 2.25 times more transactions and produce three times more lending volume, but this 2013-era upgrade is being outpaced by fintechs that scale personalized service through digital platforms.
- Traditional banks prioritize human service as their primary offering, while fintechs treat support as a backup to software that “just works.” Banks need to maintain human empathy while making it scalable and convenient.
- Banks should pilot automated personalization that treats every customer like a high-net-worth client, detecting life moments such as paycheck arrivals, changes in spending patterns, or savings opportunities through digital channels.
The significant risk facing banking institutions as they upgrade service and personalization isn’t that they won’t implement those upgrades. It’s that they may be obsolete by the time they do.
Universal bankers are a great example of this risk. Data has shown mounting evidence for at least a decade that universal bankers work. Branches with universal bankers and ITMs can handle 2.25 times more transactions per month than standard teller lines, and those locations can produce three times more in lending volumes. That’s why nearly 60 percent of banks have implemented universal banker strategies or plan to do so, according to Celent.
Universal bankers, however, are an upgrade from approximately 2013, when the industry’s competitive landscape was very different. Fintechs now work to productize the level of service that makes universal bankers so effective, bringing the value of their platform to every person with an internet connection.
Banking executives’ roadmap should anticipate competing in an environment where people have access to a private banker in their pocket. The question is: How will community institutions maintain their specialized brand of human empathy and understanding, while also adding the scale and convenience sought by customers?
Fortunately, the universal banker model points the way forward.
The Universal Banker Problem
The banking industry has always relied on people to deliver the interactions that create relationships. They are the faces behind the counter, the voices on the phone, the names a customer still remembers from a year ago.
Universal bankers added to that face-to-face interaction a frontline staff member trained to identify matches between products, services, and the needs vocalized by consumers. Reporting from The Financial Brand showed that one credit union grew loan applications to $30 million in a year, whereas the same location had gathered just $10 million before, primarily due to an upgraded branch hardware and staffing model.
Americans’ shifting expectations now dull the value of branch enhancements: Three-quarters of Americans (73%) access accounts via online and mobile channels, according to an ABA/Morning Consult survey. While those banking on computers dropped 5%, the volume is not returning to branches. Mobile banking grew to 36% as the go-to banking method, up from 30% the previous year.
Service delivered in person has diminishing value. That’s not because service itself is declining; it’s because in-person service lacks scale and convenience.
Fintechs also now apply significant pressure. They don’t even call it “service.” They call it “support,” and that support is for their product, their software, which serves as their channel for delivering value. It’s true that “service” and “support” departments provide fairly similar functions. But there is one key difference: The organization’s business model. Disrupters’ objective is summarized well by Amazon founder Jeff Bezos’s line: “The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to you. It just works.” Support is Plan B for fintech. Service is Plan A for incumbent institutions.
Plan A is flawed and will become obsolete, not because human-to-human service will ever go out of style, but because human-delivered service must become scalable and convenient.
Dig deeper:
- Why the Universal Banker Model is Still a Work in Progress
- How the Role of the Branch is Being Reimagined
- Better Onboarding Isn’t Just a Perk. It’s Critical
What Was the Universal Banker Upgrade?
The industry invented universal bankers as an operational fix. One person performing multiple roles to reduce friction and improve the customer experience. Teller. Lender. Listener. They became the bridge between operational and compliance requirements, products and services, and clients who wanted personalization in exchange for visiting a branch lobby.
Universal bankers also changed how banks viewed their employees. They connected financial needs to life moments, understood nuance, and earned trust that translated into loyalty.
They also gave everyday consumers something they had never really had before: access to the kind of personal service once reserved for high-net-worth clients. Someone who knew their goals, anticipated their needs, and could connect them to the right solution.
That combination of empathy and agility remains the gold standard for service. The question now is not whether customers still want that level of care. They do. (And that is why those who have not moved to the universal-banker-model yet are late.) The question is how to deliver it at scale, preserve human empathy and understanding, and automate where automation does not sacrifice human-added value.
Private Bankers in Every Pocket
My point here is very similar to those who saw in 2006 that branches needed a “cross-trained” frontline position that’s “highly efficient” and “who performs both sales and transactions.” Many institutions saw the concept as “warranting a test.”
Looking forward, from an industry that understands the utility of universal bankers, market conditions now warrant a test of a digital universal banker, though not of artificial intelligence to begin with. Where can the institution treat each customer as if they are a high-net-worth client?
For example, an institution may test a digital universal banker that detects when a paycheck arrives or a tax refund is received. Marketing automation and CRM systems also make generational segments a practical starting point.
Institutions could also test a digital universal banker that recognizes a single spending pattern, such as significant fluctuations in an electricity or gas bill, a potentially unnoticed increase in an internet bill, or a more relevant savings account option.
Institutions can also choose attainable scenarios where their digital universal banker would connect the customer with a human banker via a digital channel of the customer’s choice.
It’s not the time to launch universal bankers and then to rest on our laurels. It’s time to launch them and then to begin testing their next iteration. If your institution has allocated a budget for universal bankers, consider choosing a strong business case and begin to define why human services provide value. Then, scale the availability of that value as a pilot for your version of a digital universal banker.
The future of community institutions will rest on providing human understanding at scale.
