Bank Branches Go Digital. Will Sales Follow?

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Filed under: Banking, FinCom

Bank Branches Go Digital. Will Sales Follow?

Branch traffic has been decreasing for years, but for community banks especially, the branch remains a focal point for the most important advantage a bank has: building personal relationships. At the heart of the process is a word that many fear and some loath: sales.

Both relationships and sales are the keys to success to banks in the digital age.

At the recently held BAI Retail Delivery 2014, presenters and banks discussed branch transformation, with an increased focus on digital tools for sales and marketing, all in the service of building personal relationships. Behind the scenes, bankers said, increased attention to excellent back-office operations can help build cost efficient platforms that help marketers gain insight into customer wants and needs.

In a presentation on how community banks can win, Chuck Sulerzyski, CEO at Peoples Bank, said that community banks should increasingly focus their mindset on the sales process. Indeed, banks in general are notoriously poor at sales, especially when it comes to following a disciplined lead management process.

“Start setting goals and focus on how you are going to achieve them,” Sulerzyski said. “Measure the coaching, the rewards, and the consequences.”

Defining sales goals and the behaviors that are necessary to meet them start with the conversations the branches have with customers. By arming people with the skills to hold broad, yet informative conversations, banks can start to see a substantial increase in sales.

“We grew our checking accounts 5% over last year,” he said, “and checking accounts are declining in America. We don’t advertise, and we don’t give accounts away for free. We do it by having good conversations in the bank. We show in dollars and cents what someone can save.”

One of the solutions presented to the sales problem is the “universal banker” working in a digitally transformed branch. (“How many times have you heard the term ‘universal banker’ today?” one banker asked me.) A number of banks have created a techno-retail environment in branches, where customers are greeted at the door and directed to the person who can best help them.

For instance, Essex Bank last year assumed ownership of a branch in Annapolis, MD, that had been abandoned by a larger regional bank. With only minor changes, Essex transformed the 1960 building into a bright and inviting space, allowing customers to take more control over their branch experience.

At the branch, you won’t find a traditional teller line. A universal banker replaces tellers and works at an open station, Rather, you will see pods where all transactions, including opening new accounts and applying for loans, occur. Customers and bank associates share a monitor, providing a unique banking experience. A tech bar features connected Android and Apple devices preloaded with Essex apps.

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The problem some banks lies in training. Not all tellers are equipped to serve as universal bankers. People trained in retail work well in greeting customers, but they do not understand banking and can and have run afoul of regulations.

Compensation practices also must be adjusted. When comp is based solely on lead generation and sales, associates can be forgiven for overly aggressive behavior to customers.

Though many bankers feel that digital will replace a myriad of banking transactions, what will always remain is personal contact. Banks simply need to prepare and design new plans and strategies that include the digitalization of transactions with face-to-face contact.

Digital updates like this are right on target with the top areas of investment for banks, according to research presented by BAI.  Mobile, branch redesign or expansion redesign, and branch automation round out the top three areas of interest, at 60%, 51%, and 32% respectively.

It will take more than digital and teller line retooling to make branches work, however. The most successful banks are using digital tools to build a highly structured sales and lead-capture process that pulls all customer information into a single view for in-person sales and ongoing marketing.

Watch for a future article for more on that aspect of banking’s digital transformation.