It is no secret that banks need to do more with less. Lower branch profits, higher regulatory and compliance costs, higher costs of credit, more dollars required for technology and social media, higher capital requirements, among other factors, are all combining to create significant profit pressures. In addition, non-banks, often fueled by deep-pocketed investors are leveraging technology and targeting specific segments, intensifying the competitive environment. The “good old days” are unlikely to return anytime soon.
Many banks and credit unions are now reexamining their Retail strategies and effectiveness, including how they can better use their branches and branch staff. In some cases branches are being closed; however, other banks are reinvigorating and strengthening the impact of their branches, making them sales and community offices rather than allowing them to be relegated to transaction facilities. More top managers realize that unless you can differentiate your approach to Retail and make your Retail staff more productive, your bank is condemned to increasingly commodity-like returns and, possibly, failure when the next bust occurs.
All too often, however, the branch part of a customer’s Retail experience ranges from mediocre to disastrous:
- Staff is often unknowledgeable about areas like business lending.
- Retail staff remains in the branch rather than conducting outside marketing and sales.
- Staff lacks basic sales skills and has insufficient product expertise.
- Adherence to compliance, often internally dictated, takes over for common sense.
As outlined in our last two newsletters, Umpqua Bank, among others, has transformed the Retail experience. Rather than giving up on branch banking, they reinvented it, looking outside the industry for models. (By the way, Leading for Growth by Ray Davis should be required reading for Retail bankers.)
In part as a result of those newsletters, readers have inquired about how we might help banks in reviewing the current state of their approach to Retail delivery and in setting a path for improved productivity and growth. Ric Carey, who had been head of Retail at Umpqua Bank and retired from the bank about a year ago, and I have developed a Retail delivery assessment/improvement program.
Without going into too much detail, our turnkey approach assists clients in assessing and improving their current Retail delivery model. We provide clients with specific recommendations on how to improve the overall Retail and branch experience, suggest metrics to track success, and offer a preliminary timeline for doing so. Depending upon your priorities, areas the project covers may include the branch, its staff, and how Retail “connects” with customers:
- Establishing neighborhood stores versus the traditional bank model and better exploiting your links to the community to create a community hub.
- Implementing a distinct marketing strategy that sets you apart from others, based upon your bank’s specific strengths.
- Rethinking the focus and job descriptions of branch staff.
- Linking Retail and Business Banking.
- Building an extraordinary service quality culture.
- Developing, training, and incenting the branch staff to provide consistent excellence in service.
- Recognizing and retaining top branch employees.
- Leveraging Retail and branch technology while maximizing its effectiveness.
- Using alternative channels.
Regional and community banks, in particular, need to reconsider how they are now pursuing the consumer and what specific changes they need to take to be more effective. This is one area in which waiting for another day or hoping circumstances to change will lead to failure. If you are interested in discussing how we might help, email me at cwendel@ficinc.com or call 917-744-6600.