Prior to the pandemic, banks may have felt like new technologies, such as facial recognition, cardless ATM access, virtual assistants and mobile apps, were ubiquitous, creating technology analysis paralysis.
What technology is right for my branch? How do I know it’s worth investing in? While banks have been journeying down the paths of “branch transformation,” and “self-service strategy,” these journeys have been accelerated by the coronavirus pandemic. One of the most notable changes to combat the impact of COVID-19 has been the push to self-service and digital channels for critical communication. As we look to transition into a ‘new normal’, what’s next?
There are four critical areas of focus to not only prepare for what’s next, but determine what technology investments will provide adequate ROI. It’s not about how advanced or impressive your technology is, but whether your customers and branch employees are cared for and collectively benefiting from it.
1. Know your customer (really well)
A bank branch in midtown Manhattan is likely serving a different population than a credit union in a rural town. Every branch has its own needs that are defined and driven by the customer. Step one is simple – focus on your customers and what experience they value. What changed since the pandemic? Banks should have access to data that can identify what activities are happening:
How do my customers use the branch? Other channels? What services and activities?
How are bank employees serving customers? Where is their time being spent?
Amid the COVID-19 pandemic, the best-in-class banks migrated almost 70% of deposits from teller to self-service, with slightly over 50% occurring at the ATM. Having data is one thing - leveraging it is another. This is where analytics come in.
Given banks’ limited resources to sift through data, they need experienced partners who can help them parse and action these treasure troves. In many cases, banks have deployed new technology solutions, but are not using them to their full potential.
This is where leadership is crucial. Rather than chasing the competition’s technology, banks will ultimately be successful focusing on their customers’ needs in this new environment.
2. Define your tech strategy
Once you know your customer, your tech strategy follows suit. It is important to adapt processes and clearly communicate about the rapidly changing environment. The reality is, not every bank can break new ground in technology, or even needs to. Branch transformation is not one-size-fits-all.
Consider relaxing your policies and procedures to help reduce friction in the new normal for things like deposit and withdrawal limits, hold funds or access to funds or overdraft especially since self-service will play a pivotal role in transition to a new branch banking interaction.
Research shows that digitally savvy consumers use banks’ self-service channels more frequently, with mobile banking users conducting 25% more transactions through self-service channels than non-mobile banking users. It is also important to have a deeper understanding of the types of transactions your customers are conducting. For example, one bank may see a significant number of transactions at the teller with withdrawals of $50 and $100 bills. Another may have customers make loan payments inside branches. Migrating these transactions to ATMs can free up time for value-added conversations with customers.
Understanding who you’re serving and what type of technology you need to invest in will determine where to place your technology bets.
3. Invest in your people
Banks must rethink their staffing models to minimize risks for employees and customers. Diebold Nixdorf’s recent research found that many branch staff don’t use technology solutions deployed by their bank. Sometimes staff fear that promoting these services could threaten their jobs, or are reluctant to talk to customers about these capabilities due to the lack of preparation on troubleshooting items. Banks can adopt several methods to invest in their employees, such as:
Leveraging concierges to conduct health checks and manage customer flow
Communicating the rationale for deploying new solutions and the impact to their job responsibilities
Offering training on new solutions and role-playing scenarios for engaging with customers to promote self-service options
Designating select staff members as ‘digital ambassadors’ with deeper expertise in technology solutions, who can address customer questions and support other employees
Coaching staff to identify opportunities to communicate the benefits of self-service options
‘If you build it, they will come’ is not an effective strategy with respect to self-service solutions. Your branch employees play a key role in driving customer adoption of new solutions, so give them the tools and support required to get the most out of your technology.
4. Follow the yellow brick roadmap
Reopening branches won’t happen overnight and will require a measured, gradual approach. Banks looking to re-open their branches should consider a few key things:
Using analytics to understand the direction of key indicators, such as digital channels, call center, ATM, branches
Alignment with transportation hubs and retail traffic drivers, like grocery stores
Larger branch lobbies to maintain social distancing
Similarly, technology implementation won’t happen overnight and the ROI is not always immediate. Setting a technology roadmap helps frame what banks will do in year one, versus year two or three. This roadmap must be inclusive of the technology, as well as people investments and process changes.
All too often, banks deploy new solutions but fail to measure the impact of those investments. Set goals for transaction migration at the branch level and measure performance compared to goals. Assess customer usage of new solutions and develop additional metrics as needed. For a bank deploying a video ATM solution, what percentage of customers who utilized a video teller did so a second time?
Implementing your self-service strategy requires deliberate planning based on customer feedback and usage patterns. Testing and evaluating new solutions is critical to success.
Play by your own rules
While no one is certain about what our “new normal” is, one reality has been proven - change can happen instantaneously. Banks will need to assess possible outcomes and establish initiatives to position themselves advantageously. Rather than copy-and-pasting others’ tech investments, focus on your own because everyone is playing a slightly different game.
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