By Deb Stewart
In the old days, branches were the primary destination for people to make a deposit, withdrawal, or payment. How times have changed. In a recent interview with the Charlotte Observer, Tong Nguyen, co-head of consumer banking for Bank of America pointed out that you’re now more likely to visit a branch to “open a credit card, an auto loan, a mortgage, investments, or have customer service because you have a death in the family or you just moved.” He indicated that as a result, Bank of America “will continue to reduce the number of employees related to transactions, but then reinvest them back into the sales force.” Tong added that while salespeople used to represent 5% of the bank’s employee base, that number has grown to 30%. Bank of America isn’t alone in this change in customer behavior—or in its staff migration to sales roles. What are the key steps in this migration?
Step 1: Determine the right mix of universal bankers.
Consumer branch behavior has been shifting from transactions to sales and service for quite some time. And banks have been talking about moving the staffing model from teller and platform roles to universal roles for just as long. But that transition is still very much a work in progress. A recent study done by Novantas found that 22% of branch full-time employees (FTE) are now working in the universal banker role. This compares to only 6% in the first quarter of 2013—a more than three-fold increase over three years. As a part of this shift in roles, teller FTE totals were down about 20% during that same time period. Seems like a decisive transition. But for those working in universal roles, 60% of their time is focused on sales and 40% on service transactions, a ratio that has held steady over this timeframe.
What’s going on here? Kerim Tumay of Kiran Analytics points to an area where banks are stumbling in universal banker deployment. “In a recent survey of 50 banks, we found out that only a dozen of them considered their deployments completely successful,” he said. “And, two-thirds of banks that have implemented this model employed a rule-of-thumb approach to staffing.” Tumay went on to explain that banks need to use predictive analytics in these rollouts instead of a one-size-fits-all approach. “If transaction volume in a branch still justifies a teller, why use a universal associate?” he asked. In branches where transaction volume is lower, in-branch observations and analytics can be used to identify the types of interactions that are occurring—and to determine the work content for universal bankers. That would include “both customer facing and non-customer facing activity (operational tasks, training and others), as well as the proper allocation of time between sales and servicing activities. Data and observations come together to create quality position plans, which may result in multiple universal associate roles.”
For some banks, position planning is evolving into a market-based activity. Looking at staffing across micro-markets allows the bank to make determinations on sharing resources across branches. These may be universal bankers or they may be specialists in mortgage, investments or other.
Jon Voorhees, a consultant with the Austin, Texas-based Peak Performance Consulting Group echoes the importance of developing a comprehensive, market-based staffing plan before beginning implementation. “Do the analytics up front and set your ultimate aspirations grounded in fact,” he said. “This gives you a map as to how to get from here to there. The value of this analysis cannot be overstated, you cannot reach an ultimate goal cost effectively without taking this step.”
Voorhees also points to a hidden staffing benefit of moving to a universal banker model. “You may see a bump in branch staff retention as you move to this model. These jobs are simply more rewarding. What a universal banker does in any given day is far more varied and challenging than in the traditional model. This has proven particularly valuable in the retention of millennial employees who are looking for job enrichment and perhaps a feeling that they are helping customers in a meaningful way.”
Step 2: Evolve the whole staffing picture.
Lani Hayward, EVP of creative strategies at Umpqua speaks to the evolution of the universal banker role. “All Umpqua store associates are cross-trained to help customers with a broad variety of consumer banking needs. We are now centers for financial intelligence, supporting more complex transactions. Umpqua created the universal associate model in 1996, and that gives us a leg up since staff is already trained on products that people come in for. But we need to sharpen our depth to become a financial advocate.”
Umpqua is sharpening that depth in a number of ways. In the area of business banking, they have identified 106 of their more than 300 stores with strong business banking potential, and they tailored the experience and expertise of the staff to fit the customers’ needs. A long-standing certification program offers advanced training in areas like small business cash flow, consumer and business lending, and identifying opportunities for investment products. “We are sharpening the skills of UAs in each location based on the customer needs for each store,” Hayward said.
Video conferencing with experts can provide another avenue to create depth. Umpqua is looking to provide video access to experts in commercial and international banking, as well as financial planners and others. “We may have a banker in Portland who is an expert in lending to wineries. Video conferencing provides that unique expertise to customers in Washington, or California, or anywhere in our footprint,” said Hayward. More routine applications may provide access to a mortgage or investment expert. So store associates have the ability to satisfy the customer’s specific need, either promptly through video or by setting an appointment. The goal is to service the customer in the way they want to be serviced.
As banks have sought to deepen their skills, Dale Johnson from Novantas has observed a change in approach. “Banks are starting to look at their sales models differently. In the past we’ve staffed from the bottom up, matching staffing to existing activity. Increasingly banks are staffing to market potential.
Opportunity analytics that may include:
- Market characteristics (current data on demographics, number of businesses, population density)
- Market position (how well is the bank positioned in the market)
- Factors specific to the branch (activity, hours open, characteristics of customers using the branch)
“These factors and others let you decide opportunity—then you can place your specialists, train your staff, and fine tune general staffing levels,” Johnson said.
Step 3: Continually redefine staff advice.
As consumer preferences evolve, the industry needs to continue to look for new ways to present advice and add value to customer relationships. Umpqua has extended video conferencing function to provide access to non-bank members of a customer’s financial team. “Conferencing in a customer’s accountant or attorney builds value. We are positioning ourselves as part of a financial team. This is especially valuable with high net-worth and business banking customers, whose finances extend well beyond banking products,” Hayward noted.
Umpqua is also looking for ways to make access to branch associates simpler. “Providing customers with access to their banker in their store via chat or video chat could allow us to have conversations without being physically in front of them. Over time we could bring documents and other experts into these chats, always building value and reinforcing the value of the relationship,” Hayward continued.
And advice doesn’t always have to be one-on-one. Umpqua and others have used informational sessions, presentations, and other group educational formats to expand the definition of advice. Umpqua branch managers and universal associates are very much a part of these programs, taking what they know about their customers to bring relevant programming to their market.
Predictive analytics will be a continuing part of this story. Continually fine tuning staffing levels, branch roles, performance expectations, and incentives as consumer preferences evolve will be important to maintaining the productivity of branches.
A deepening level of expertise will continue to take on different forms. Well-trained universal bankers, roaming experts, and video experts will be accessed in many different ways, allowing them to meet the customer where they are.
And of course, customer behavior will continue to change. This is not a “one and done” exercise. We will need to modify operations and build new approaches to ensure that we keep up.
Deb Stewart of Charlotte, N.C., is an independent consultant working for the financial services industry. Email: firstname.lastname@example.org.