Retail Banking: A Future Powered by People

By Shelly Loftin

Retail banking faces no shortage of technology trends. Everywhere you turn there are new innovations promising to transform, revolutionize, spice-up, simplify, add value, create efficiencies and discover never-before fathomed potential. It is amazing and overwhelming. Without doubt, the changes taking place present an incredible opportunity for the banking industry. But change can cut both ways. In order to be properly positioned for the future, each institution must first take a look in the mirror and strengthen its core foundation.

Without that foundation, all those potential opportunities become a swirl of trends and buzzwords: big data, artificial intelligence, digital transformation, blockchain, omnichannel, chatbots, branch transformation, real time payments, fintech, interactive teller machines, open APIs. How will you make any of that work for your customers?

What changes do you need to make before you can innovate?

Banks often have complex strategic goals that drive their interest in implementing any new technology. And there are endless ways transform a financial institution from traditional to innovative, from sleepy to forward thinking or from reactive to proactive. But there aren’t any road signs or warning lights to point toward which solution will best help you reach your goal. Each solution is likely to involve complicated technology infrastructures and difficult changes in process. None of which can reach its intended potential without being led and powered by people.

The paradox of the technological revolution in banking is that people are the key. Success in digital transformation starts with getting the right talent and organizing them effectively.

Before you stop reading, let me immediately clarify that this isn’t a directive to go hire all new people with fresh or fascinating credentials—or a suggestion that your existing team isn’t capable. Your team is likely quite capable. However, all too often, organizations aren’t optimally structured to succeed because they’re not equipped for paradigm shifts on this scale. No amount of bottom-up empowerment can survive a misaligned leadership team or a key project player not having a seat at the table. The retail trends listed above affect the entire organization and require communication, mobilization and collaboration from several areas. Leaders in all these key areas need to have mutual respect, trust and confidence in each other to do the job.

Make sure you have the right people on your leadership team—and that they understand the importance of information sharing and teamwork.

Connecting the dots across multiple departments will make a massive difference in the execution and end result of any project. For example, if the CIO or CTO is working on digital projects, it will be imperative to include—from the beginning—retail, operations, compliance, risk, human resources and marketing. These stakeholders will help determine how to better design the experience, how it will impact the customer and how the changes should be communicated internally and externally.

However you are structured, there should be a seamless connection between your human resources, marketing and retail functions. For customer experiences to be aligned both physically and digitally, you must strive for the same alignment among your staff.

Strong, innovative organizations also understand the empathic connection between customer engagement/experience and that of its own employees. If your bank trusts its cross-departmental teams to work well together—so leadership isn’t involved in the weeds of the project—that is great. But it’s worth taking the time to do a politics check beforehand to understand team dynamics and anticipate potential problems.

Processes can be perfect and documented beautifully—and still yield subpar results. This happens when no one understands the complicated relationships among the team members and the social factors hindering progress. Leaders often feel that team members are adults and should be able to do a job regardless of personal feelings. But underestimating emotional connections and how they impact the work environment is a preventable mistake.

Sure, you can expect people to function adequately in a job role without consideration of social relationships. But implementing game-changing technology and establishing culture-shifting behavior is a social undertaking. It cannot succeed without considering the emotions of the players involved. You can solve technical problems, amend processes and continuously assess risks, but social problems are the silent killer of masterful idea execution and employee retention.

Develop a comprehensive plan to transform your talent.

We often hear of the push to change bankers from “order takers” to “trusted advisers”—or some version of that concept. The trouble is, how to do we do that? Where do we start? It is important to note that attempts to accomplish this will scarcely be effective if leaders are not only connected to the purpose, but have a healthy appreciation for the magnitude of the necessary skill-shift. Advising is complex and emotional, whereas order-taking is robotic and clearly defined. It won’t happen overnight—or with the adoption of one or two additional training techniques.

Customer-facing team members are taking on responsibility for more rule-and-regulation enforcement than ever before. They have to understand complicated product offerings paired with channel preferences. At the same time, they are also expected to genuinely connect with customers, anticipating their needs before they arise. Leadership needs to discuss and understand the weight of these expectations on your teams—and the skills they require.

Competence and connection are not mutually exclusive. So how do we prepare, train and coach for both as we considering change and communicate it to staff? Or better still, how can we restructure the organization to keep customer-facing team members focused on creating and sustaining valuable customer connections—and shift technical or procedural work elsewhere?

Is it your goal to revolutionize retail at your bank?

To accommodate changing consumer preferences and technology, it’s necessary to shift the retail culture. And that requires a wholesale look at the entire organization—and the removal of barriers between business lines that have existed within banks forever. This requires a level of trust and mutual respect between departments and leaders who may not have connected or communicated before.

Make sure someone who speaks for the people—both customers and employees—is at the table for every discussion and decision. Follow up by considering the cultural, emotional and social factors, normalizing them internally, mapping them out, evaluating and communicating them appropriately with stakeholders.

The term culture is often overused, oversimplified and immediately dismissed as something “fluffy.” The truth is that organizational cultures exist whether we choose to harness them or not. Organizations are enhanced by technology, yet powered by people. As leaders, we should give the “people” portion of our projects the same level of care and concern that we provide for the technology—if not more. Effectively acknowledging and managing culture and social connectivity—in tandem with technology—will provide the greatest bottom-line result.

Shelly Loftin is SVP of retail banking, lending and payments at ABA. Email: [email protected].