WHITE PAPER. Retail Banking Transformation Tablet Technology Driving the Transition. Fanny Miner IBS Product Management

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1 Retail Banking Transformation Tablet Technology Driving the Transition Fanny Miner IBS Product Management

2 Introduction As retail banks work to reduce cost through automation, they wrestle with the need to also deepen customer relationships based on personal interaction. Digital finance is transforming retail banking, and savvy institutions will seek strategies offering the best of both worlds: high-touch customer service and a technology-enabled frontline staff. This paper provides a vision to bridge both worlds. Industry challenges driving transformation Financial institutions face both revenue growth and expense management challenges in 2016 and beyond. Findings from the recent FIS CEO Survey indicate growing loans is the top concern of industry CEOs for this year, with 93 percent rating it as a very important to important challenge. Improving service and managing costs came in a close third and fourth, respectively, with over 80 percent indicating these issues as top challenges. The graphic below displays highlights of the survey findings. The survey findings indicate that financial institution executives need to seek efficient ways to sell to and service their customers. They can t simply repeat past staffing patterns and grow with declining margins. Instead, they need to better utilize the sales resources at hand. We will now look more closely on other trends affecting a bank s retail sales force. Need for personal touch and service The penetration of digital banking channels can leave little opportunity for bank retail sales staff to meet personally with customers. Digital users expect immediate contact and problem resolution when problems arise with technology, but this is not the best time to conduct selling and relationship building, when the customer needs problem resolution and is experiencing stress. Rather, customer development often best occurs during personal conversations. Customers crave the self-service online products provide, yet also welcome contact with a real human banker that wants to learn about their needs and offer relevant financial advice. Recent research from Aite points out that many users that open accounts online take advantage of contact with a personal banker in order to be guided through the process to completion. 1 1 US Trends in Checking Account Opening, Aite, October

3 Sales force productivity pressure In addition to the increased need for personal customer contact, banks face challenges to improve their efficiency ratios by growing top-line revenue while controlling the cost of sales. Calling officers need to make each call and customer interaction count. They must rely on clear and consistent communication with back-office staff in order to stay on top of customer issues but not become stuck in the details of problem resolution. Future investment in branches will be predicated on their sales performance, as indicated in this research from Celent that emphasizes the importance of the branch in supporting sales objectives. 2 2 The Tablet Stampede How Branches will Change in the Short Term, Celent, September

4 The Universal Banker While there remains uncertainty over the exact number of bank branches in the future, one thing is known for certain: The staff within them will change. One prevalent strategy to address the changing branch environment is to implement a Universal Banker model. The Universal Banker model allows some or all branch staff to perform teller, customer service, new accounts and possibly lending functions. In effect, fewer branch resources perform a greater variety of tasks. This can help retail productivity greatly, but banks must be sensitive to the effect on customer service. Universal Bankers require enabling technology that permits them to conduct transactions with intuitive processes and built-in efficiency, creating a positive customer experience. It can become a challenge for a Universal Banker to perform their duties in the traditional branch environment. How many customers will want to stand at the teller line to discuss CD rates, new accounts, a safe deposit box or loan options? Creating a welcoming and open branch environment that allows a Universal Banker the freedom of movement to accommodate the customer s needs without the traditional barriers is important to the success of this new model. Institutions of all sizes are starting down the path to a Universal Banker model. The following statistics from FMSI reinforce that declining branch transactions and rising teller salaries are forcing consideration of new retail models. 3 3 Teller Line Study, FMSI,

5 Retail banks transitioning to Universal Bankers must use enabling technology wisely. Enabling sales performance with technology Given the challenges of retail sales force productivity and the adoption of Universal Banker models, financial institutions must rely on innovation and technology to boost their retail performance. This technology should be evaluated for its impact on three fronts: Improving service without adding resources Sales effectiveness and efficiency Transitioning the retail staff closer to the customer 5

6 Improving service with fewer resources Banks of all sizes need to offer better service with the same or even fewer resources. Some creative institutions are experimenting with tablet technology as a productivity tool and differentiator. According to a recent American Banker article, Evans Bancorp in upstate New York opened a reimagined branch in November Evans' new branch largely does away with the traditional teller line, instead featuring Universal Bankers with tablets who engage with customers. 4 Universal Bankers must be service-oriented, because many customers expect to execute self-service transactions digitally, saving more complex transactions for personal interaction. Regional and community bankers often claim their distinguishing feature versus larger institutions is the superior level of customer service they offer. Knowledgeable, skilled frontline staff equipped with the appropriate technology can keep service levels and a bank s efficiency ratio at optimal levels. Increasing sales effectiveness and efficiency The retail sales force in the Universal Banker model must be efficient and effective, given their higher level of compensation. Calls made on customers must have a purpose, be thoughtfully planned and customer responses easily identified and delegated. The days of the casual conversation, just to check in with friendly customers, are few between. Neither customers nor bankers can afford meetings without outcomes in today s business climate. Retail bankers must have tools to maximize the impact of their customer meetings. Transitioning the retail staff closer to the customer The digital revolution increases customers expectations for self-service, but personal contact will not become extinct. Personal bankers and calling officers will still need to visit customers at their places of business. This allows them to better anticipate their needs and to better understand their operations and business. Given the requirement to field an efficient and effective sales force, banks must then give their relationship development staff the technology that enables them to better do their jobs. This technology must: Enable greater mobility within the bank s sales force Easily display images, visual content and videos Offer tools to capture customer authorizations and e-signatures Provide organizational tools to maximize the value of the sales call Long term path for retail banking How can bank executives start to utilize technology that enables greater sales and service efficiency with their calling force? They need to consider a logical progression built upon tablet technology that provides: More productive sales calls A transition for calling officers to become comfortable as mobile bankers A gradual increase in the power and depth of client-facing applications residing on the tablet This path starts with boosting productivity initially within the retail banking sales force. 4 The Spark the Lead to a Branch Reinvention, The American Banker, November 16,

7 Calling officers must improve the outcomes of their customer calls. A bank can demonstrate high service levels by placing information at the fingertips of these calling officers. Eventually, functionality such as deposit origination and other traditional teller tasks are streamlined for the tablet and available at the customer s place of business, guided by the skilled hands of the mobile banker. Research from Celent suggests that many bankers are studying tablet usage in industries outside of banking in developing plans for deploying mobile banker type technology. The follow graphic show other factors influencing bankers in the use of tablet technology. 5 By observing other industry s use of tablet technology and combining that knowledge with their own experiences, bankers can develop their own scenarios for applying this technology. A rational, logical progression of the approach to tablet deployment begins first as a sales productivity tool, then extends it to all frontline staff. Such a progression is depicted in the following graphic. 5 The Tablet Stampede How Branches will Change in the Short Term, Celent, September

8 Short-term scenarios to jump start tablet Tablet technology fits into the long-range plans of many financial institutions. A key to getting started is to look for opportunities to deploy tablet technology to reap short-term sales productivity benefits. The following three scenarios describe potential retail sales efficiency improvement. Small business lending In the back and forth of closing a loan to a small business customer, much documentation and authorizations need to exchange hands between the banker and business owner. Tablet technology facilitates those exchanges, speeding the communication of signatures. If the bank is making a commercial real estate loan, the calling officer can take pictures of the property in question with the tablet and use them in appraisals and other closing documentation. The native capabilities of a tablet to capture documents and transmit data online can reduce cycle times in lending deals. Branch manager outreach Many banks expect branch managers to manage a retail staff and sell at the same time. When branch managers are out on calls, they need to stay in close contact with frontline staff at the branch. Tablet technology can help the branch manager plan an effective series of customer calls while checking on his or her service request queue between customer visits. In fact, with a tablet, a traveling branch manager can view the most current status of the account they plan to call on just before knocking on the client s door. The tablet can enable immediate access to servicing systems, online account access and allow for access to the bank s intranet and shared drives. Enhancing the business lunch Tablet technology brings discipline to planning and following up on sales calls. Tablets can generate and send formal call requests and call reports to management staff. Calling officers can make the most of business lunches by having and sharing appropriate product information to match the customer s current situation. A video introducing the bank to prospects can display on the tablet screen in an informal manner. Tablet technology can enhance the sales effectiveness of even the most able schmoozer on a bank s calling staff, and tablet technology can improve the discipline needed for a meaningful sales pipeline reporting process. Summary Tablet technology fits into the long-range plans of the majority of financial institutions. A thoughtful transition to this technology can offer many short-term benefits for a retail sales force as well. The key is to start planning your deployment today to both introduce the benefits of the new technology and lay the foundation for retail banking transformation. For more information For more information on tablet banking and mobile banker technology, contact Fanny Miner of Integrated Banking Solutions at or fanny.miner@fisglobal.com. 8