“Sometimes I lie awake at night, and I ask, ‘Where have I gone wrong?’ Then a voice says to me, ‘This is going to take more than one night.'”
How many of these quotes sound familiar to you?
Probably all of the above and more like them. One of the biggest themes in branch banking is the need to focus branches on sales by eliminating tasks and work that don’t support sales and service goals. There have been countless initiatives and projects to do just this. And based on all of these efforts, we would all agree that the amount of time branches can devote to customers and sales has improved in the last few years. Right?
Well, not so fast.
We just finished the mind-numbing crunching of bank survey numbers for the new Cornerstone Report. In our surveys, we devote quite a bit of effort gathering information on how branches spend their time in different functions and how productive they are in sales and delivery. As we would have expected, there are some notable trends since we last conducted surveys two years ago. There are four I want to examine. Since 2003:
These trends were very consistent in our surveys, and they are pretty sobering statistics (except for those of you that actually set a goal to double the administrative work your branches do). We have to ask why there is such an apparent disparity between purpose and results. I would suggest several reasons these numbers look the way they do:
1. Regulation took its toll. Most banks could do little about the fact that branches had to take some of the brunt of regulatory demands. Much more time is being spent on OFAC, fraud, SARs, and other compliance issues. Many branch managers are actually involved in field investigations for large currency/suspicious activity reporting.
What is so frustrating about this is that there is probably nothing that could have prevented the increase in branch work. However, there is no question that increased regulatory activity has hurt branch sales and service efforts and increased busy work.
2. Customer self-service migration has hurt branches as much as it has helped. The droves of customers who now use ATMs, debit, Internet banking, IVR, and other self-service channels have created a conundrum for branches. On the one hand, very few of the self-service transactions actually replaced those that were previously being done by branch employees – they were additive to the total number of customer transactions. On the other hand, the number of questions, complaints, disputes, and problems arising from customer self-service did increase. And, for all of the effort to direct these kinds of issues to call centers and other centralized functions, branches handle more of them than we all might expect.
What can complicate this is the fact that many branches don’t have access to information or authority to resolve issues with customers – that was centralized, too. This puts branches in the position of too often being the “middleman” between customers and researchers/decision makers. And most any branch will tell you that being the middleman usually takes as much time as doing the work (memo to countless deposit ops groups and process improvement teams – I feel your ire and note your disagreement).
3. There is still too much manual activity sales reporting and information gathering. In our surveys this year, we asked banks to describe how sales tracking and reporting occurred. Only 14% said it was completely automated, and over half of those had to write their own systems to get it automated. Twenty-four percent said tracking and reporting was completely manual. The rest said it was partially automated, which means that input is still manual but reports are generated automatically. Yuck.
A second example is the increasing practice of customer profiling, which is the gathering of lots of information about customers (usually paper-based) that is used to sell additional products and services. In branches that do this type of profiling, it is amazing how much time it takes.
We question the real benefit of most profiling activity in the first place, but there should be no question that if it’s going to be done, it needs to be done online.
The bottom line in both of these areas is that building sales culture has created a lot of extra work that needs to be eliminated or automated.
So how can banks move their branches toward improving the numbers we discussed earlier? Some suggestions:
1. Fraud/Regulation – Get investigations and research out of the branches. While there is no way to get branches completely shielded from regulatory activity, there is no reason for branch employees to be doing investigations on suspicious transactions and large currency transactions. This is not value-add work.
2. Servicing Issues – Start tracking branch “one and done” ratios. One of the best ideas call centers have deployed in recent years is tracking the number of calls that are resolved on the spot – no passing the call and no call back. I don’t understand why more banks don’t set the same one and done goal for branches. Admittedly, there would be some systems work needed to track this ratio. However, focusing on this goal would force banks to have the right conversations about information requirements, authority levels, decision levels, and processes required to improve the resolution of customer issues. And, in fact, increasing branch one and done percentages may actually decrease branch administrative work.
3. Sales Tracking/Reporting – First, challenge the benefit of the customer profiling and reporting of sales activity that branches perform. Do these activities demonstrably help branches in their selling and improve sales results, or are they just filler for auditors, coordinators, and managers? (Note to these groups: I feel your ire.)
Second, get serious with your vendors about their plans to integrate sales tracking and reporting with the delivery systems used by platform and teller staff, modified to your particular needs. Now, you can go to any user conference and see the demos of CRM systems that claim, at least in design, to do this. However, as I mentioned before, fewer than 10% of banks in our surveys reported having purchased any system that has fully automated sales tracking and reporting. Something is being lost between the demo and the front line. I suspect it has to do with the fact that every bank incentive plan and sales plan is just unique enough that any out-of-the-box system will need some modifications. Banks and vendors need to get their fingernails dirty and figure out what those modifications are before these systems get traction.
The bottom line here is that having every platform employee and manager spend half a day per week on administrative paper shuffling helps nobody. Banks need to kill this bureaucracy. Because, as an unknown commentator (who was clearly Gonzoesque in his/her day) observed, “Bureaucracy is the conversion of human energy into solid waste”.