DIGITAL DISRUPTION 3rd Annual SalesScape Symposium - NEXT GEN SALES, SERVICE, AND MANAGEMENT - IN AND OUT OF THE BRANCH - Novantas
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
3rd Annual SalesScape Symposium
DIGITAL DISRUPTION
NEXT GEN SALES, SERVICE, AND MANAGEMENT – IN AND OUT OF THE BRANCH
September 18 – 19, 2017 | NYC
novantas.comTABLE OF CONTENTS
TABLE OF CONTENTS
3 Welcome to the 3rd Annual SalesScape Symposium
4 SalesScapeTM Comparative Analytics Data Insights
7 Infographic: Banking Reaches a Digital Inflection Point
8 Replacing Lost Sales Conversations with Multi-Channel
Appointment Setting
12 Accelerating Digital Migration: Necessary, Tough
and Rewarding
16 Branch Role Chaos: Call to Action on Staffing
19 Digital Investment: Success Driver or Bottomless Pit?
2 | SALESSCAPE SYMPOSIUM 2017THIRD ANNUAL SALESSCAPE SYMPOSIUM
WELCOME TO THE 3 ANNUAL RD
SALESSCAPE SYMPOSIUM
D
igital disruption is moving the banking industry world-
wide towards a multi-channel sales model, and impacting
the way banks serve customers. The purpose, function
and format of the branch is changing, while the bank tries
hard to build lasting customer attachments in a constantly evolving
virtual world.
The bar is not just rising, its moving entirely. To lead effectively, you
not only need to be thinking long term about the changing roles of
your people, their skills, and incentives, but also about the role of
management in the digital age. We see a radically new set of man-
agement skills and processes needed to manage local and distribut-
ed workforces.
At this year’s SalesScape Symposium, you will be part of a highly
interactive discussion that brings together actionable data and in-
sights from thought leaders in a series of presentations, small group
discussions and hands-on activities. Over the course of two days,
we’ll cover the transition from traditional branch-based sales, ser-
vice and management to the new remote, market- based delivery sys-
tem enabled by digital advancements.
SALESSCAPE SYMPOSIUM 2017 | 3SalesScape ™ Comparative Analytics Data Insights Novantas’s SalesScape Comparative Analytics Data Insights is an ongoing information series highlighting key workforce productivity trends and metrics in the banking industry. In these four excerpts we have captured trends in sales performance, as well as new consumer and household acquisition over 2014–2017 for super regional and regional banks. 4 | SALESSCAPE SYMPOSIUM 2017
Novantas SALESSCAPE
SALESSCAPE™ COMPARATIVE ANALYTICS DATA INSIGHTS
Product Sales per 1,000 Consumer Households on Book More Than 90 days
-20.3%
-12.6%
-0.3%
16.94 17.11 18.44 16.11 16.70 16.04 15.64 15.59 17.15 17.95 20.69 16.49
Overall Regional Super Regional
Legend
2014 2015 2016 2017H1
Novantas SalesScapeTM Comparative Analytics
Novantas SalesScapeTM Comparative Analytics
THE DIGITAL EVOLUTION INFLUENCES SALES PERFORMANCE FOR SUPER REGIONAL BANKS
With customer migration to digital channels on the rise, banks are finding it more challenging to deepen customer
relationships through in-branch sales. The data reflects that new sales to the existing customer base has decreased
from 2016 to 2017H1. As the graph shows, a shift has occurred over the past 6 months where super regional banks
(1,000 – 2,000 branches) have seen a marked decrease at 20%, while regional banks (SALESSCAPE™ COMPARATIVE ANALYTICS DATANovantas
INSIGHTS SALESSCAPE
US Household Acquisition (New Households/branch/month)
+0.6%
+1.8%
21.96 20.74 19.95 20.30 +7.7% 29.88 27.58 25.30 25.44
14.43 14.23 14.43 15.54
Overall Regional Super Regional
Legend
2014 2015 2016 2017H1
Novantas SalesScapeTM Comparative Analytics
Novantas SalesScapeTM Comparative Analytics
NEW HOUSEHOLD ACQUISITION STARTS TO REBOUND…SLOWLY
Consumer household acquisition has gained slight momentum after a fall off from 2015 acquisition rates. While
Super Regional banks (1,000- 2,000 branches) had an especially tough 2016, falling off 8% from 2015 rates, regionals
(BANKING REACHES A DIGITAL INFLECTION POINT
2017 Omni-Channel Shopper Survey
2016 More
Attached
10%
Branch Traditionalist
The majority of U.S. shoppers 16%
Branch Attachment
Channel Mixer
are now in segments that either 36%
47%
don’t use bank branches, don’t 2015
25% Innovation Seeker
care much for them...or both. 29%
Internet Ready
5%
14% Thin Branch Ready
11% Less
7% Attached
Being perceived as convenient is key to getting
ON into consideration set
AVERAGE 30%
CONSUMERS
28%
+8% 26% -27%
ONLY Digital
capabilities
20%
18%
CONSIDER
16%
are now the
BANKS #1 driver of
perceived
PRIOR TO convenience
PURCHASE Leading Online/Mobile
Legend
2014 2015
Branches Near Me
2016
In a digital world, consumers expect to open their new accounts digitally
79% shop digitally
(in part) 54% shop digitally
(exclusively) 33% want to open new
accounts digitally
SALESSCAPE SYMPOSIUM 2017 | 7
Read the full report atContact us at research@novantas.com
novantas.com or contact us at research@novantas.comReplacing Lost Sales Conversations
with Multi-Channel Appointment Setting
BY ANDREW HOVET
With the continuing decline of branch visits, a robust appointment
setting process for both customers and sales associates is now an integral
component of retail sales.
As bank customers are increasingly implemented comprehensively and inte- through multiple customer contact
shopping online for financial products grated into new branch sales tactics, can points, which can help generate more
— surfing for better interest rates and substantially improve new-to-bank and quality face-to-face sales conversations.
deals — as well as doing more and more existing customer sales. And it can raise The inbound component involves multi-
of their transactions via online and account opening rates as more people ple calls-to-action and a digital appoint-
mobile banking, banks are faced with a choose to begin applications in digital ment setting tool that allows digital
dual quandary. Can banks find new ways channels as opposed to the branch. shoppers to schedule a branch visit for
to draw customers and prospects into a sales consultation. The outbound
sales conversations at the branch? How FEWER IN-PERSON AT BATS; LOWER component includes proactive outreach
can banks limit the drop-off when cus- ONLINE BATTING AVERAGE to existing customers (or to prospects
tomers try to open via a digital channel What we mean by “multi-channel” with contact data), to suggest sales con-
but fail to complete? appointment setting is an integrated versations based on their likely needs.
Enter multi-channel appointment combination of both inbound and While neither of these approaches
setting. This simple digital tool, if outbound appointment management is revolutionary, uniting them with a
8 | SALESSCAPE SYMPOSIUM 2017REPLACING LOST SALES CONVERSATIONS WITH MULTI-CHANNEL APPOINTMENT SETTING
common multi-channel appointment aggressively as they did in the past.) ber support, and digital appointment
platform where both customers and Declining branch visits are chang- setting. As most product sales still hap-
bank associates can create, modify and ing the shopping behaviors of consum- pen in a branch, helping clients book a
monitor their appointments is the next ers. According to the 2016 Novantas pre-scheduled visit to the branch may
step where banks should be heading. U.S. Shopper Study, overwhelmingly be the best way to limit abandonment in
Why is this a critical move now? consumers prefer to research financial the buying process.
With the declining check usage, increas- products using digital channels in Offering multi-channel appoint-
ing adoption of ATM/mobile image whole or in part (See Figure 1). This ment setting gives existing customers
deposits, and mobile banking prolifera- shopping behavior has created a major and prospects an alternative route to
tion, teller transactions have been on a disconnect in the “purchase funnel” (i.e., closing the deal on a new loan or deposit
multi-year downward trend with no sign in the Awareness Consideration product, should the online process
of abating. According to data compiled Purchase process). Specifically, frustrate or stymie them. Completion
by Novantas SalesScape™ benchmark- awareness and consideration are being statistics for online applications are
ing, teller transactions continue to formed via online research and shop- telling, revealing major drop-off rates.
decline at about 4% per year. This trend ping. Yet purchase and fulfillment are For new checking accounts, the average
is clearly eroding the opportunity to still largely occurring in the branch booking rate for customers who start an
leverage teller referrals for generating — whether due to purchaser preference application online is between 10 and 40
sales opportunities. Additionally, with or fulfillment process limitations. The percent, depending upon the bank and
the fallout from recent and well-publi- migration to shopping digitally has where you start counting. If measured
cized overreach in branch selling tac- many implications for banks — which after the applicant has completed enter-
tics, banks may be even more hesitant is why banks need to step up their use ing personal information, around three
to push products at the teller line. (Don’t of digital tools that can help clients in ten applications result in a funded
expect to hear tellers ask “would you like through the purchase funnel — includ- account; if measured earlier in the
to apply for a credit card?” as often or ing online chat, click-to-call 800-num- process, completion rates are far lower.
FIGURE 1: U.S. Shopper Preferences
Customers overwhelmingly prefer to shop for financial products digitally, yet purchase still largely occurs in the branch, either
because of preference or due to failure in the digital process.
How do you prefer to shop? How do you prefer to apply?
Branch
13% Branch
Fail, go
to branch
25% Both
Digital
Drop out
or fail
54% Digital
Source: 2016 Novantas U.S. Shopper Study
SALESSCAPE SYMPOSIUM 2017 | 9REPLACING LOST SALES CONVERSATIONS WITH MULTI-CHANNEL APPOINTMENT SETTING
With the option of an in-person alter-
native to complete their application,
banks give online shoppers an in-person
Giving customers and sales
parachute — a chance to pull the ripcord associates multiple options to
and still land at one of their branches to
complete the purchase of a new product. schedule branch appointments is a large step
MAKING IT WORK
forward in shoring up declining branch sales.
Reviewing publicly available materials, 1. Within digital account opening an invitation for customers to come in
we see several examples of North Amer- (DAO), to support customers for an annual financial review with a
ican banks that have deployed digital who want to “bail out” of the trusted advisor. At one point in 2016,
appointment setting to help smooth the digital process; Citizens had contacted over 327,000
seam between preferred digital shopping 2. Within product pages as a simple of its customers, resulting in 82,000
and the cross-over to in-branch purchase. call-to-action to bridge online shop- appointments booked. Proactive appoint-
An early adopter was Bank of ping over to in-branch buying; ment setting takes advantage of the
America, which began offering “Bank 3. Within the secure digital banking excess capacity of branch sales associ-
by Appointment” to its digital banking environment (online/mobile bank- ates and generates additional sales and
customers as early as 2013. Bank by ing) for customers who need either referral opportunities. The Checkup
Appointment now enables mobile and sales or service support, with auto- initiative dovetails with ongoing efforts
online banking customers to schedule mated pre-fill of customer contact by Citizens to retool and reduce the
same-day appointments at branches with information; size of many of its 1,200 branches, as
specialists in retirement, investment, 4. On the Branch Locator pages, they move from transaction centers into
home loans and small business, as well right along-side the branch phone advisory centers.
as everyday banking. Mobile users can number; and Similarly, PNC Financial has been
automatically add in-branch appoint- 5. On the Contact Us page. using this tool to help customers bridge
ments to their smartphone-based cal- One of the major benefits of between the digital and physical worlds,
endar. BofA customers booked 317,000 multi-channel appointment setting is and along the way improve its organic
digital appointments in the fourth quar- that it allows banks to collect contact growth. About half of PNC’s customers
ter of 2016 — 65% more than the same information for new-to-bank prospects, are primarily digital and over 40%
quarter in 2015. This equates to roughly which can then be used to help pull the of transactions are non-teller. PNC
one appointment per branch per day. In customer through the sales funnel. If is using technology investments to
an industry that averages only a couple the prospect does not show up for the reduce the size of its new branches
of daily product sales per branch, one appointment, the branch associate can — down to around two-thirds the tradi-
more digital appointment may be the reach out to reschedule. Additionally, tional square footage — while maintain-
difference between declining sales and the bank can potentially leverage digital ing these physical outlets as a place to
sustained growth. channels to re-market to the prospect. close transactions and engage custom-
Canadian banks are moving in the ers. Proactive appointment setting is a
same direction. Bank of Montreal offers MOVING FROM ONE-WAY TO big piece of this strategy, as PNC was
a similar integrated application through TWO-WAY able to make 350,000 appointments in
its mobile and online banking platform, Giving customers multiple opportuni- half a year, with 25-30% leading to new
which allows customers to book a real- ties to request and schedule a branch products sales.
time branch appointment. TD Canada or phone appointment is a large step While calling for appointments
Trust and CIBC also use these capabil- forward. Linking that to proactive may represent a new sales skill for
ities to bridge the gap between online customer outreach to generate branch retail branch associates, it is superior to
shopping to in-branch advice. appointments is another large step. asking associates to sell over the phone.
Equally important to having Two-way appointment setting allows Clearly, “selling an appointment” is eas-
appointment setting is the effective both sales associates and customers ier than selling a product, and having a
integration of the capability into digi- to book appointments in the branch, face-to-face appointment in the branch
tal channels. In our work with clients, giving way to a better opportunity for gets the associate onto their home turf,
we have observed that many digital a two-way dialogue between the branch where they are most comfortable having
appointment setting deployments are personnel and the customer or prospect. a sales conversation.
not being fully leveraged. There are A public example of this multi-chan- Additionally, selling an appointment
at least five areas where banks should nel approach is Citizens Financial and has fewer regulatory concerns than
deploy prompts for appointment setting its “Citizens Checkup” program. As phone-based product sales. From a sales
in both online and mobile experience: described to investors, the outreach is process perspective, pre-scheduled
10 | SALESSCAPE SYMPOSIUM 2017Multi-Channel
Transition Customers to Branch Appointment Setting
Pull Customers into Branch
REPLACING LOST SALES CONVERSATIONS WITH MULTI-CHANNEL APPOINTMENT SETTING
FIGURE 2: Multi-Channel Appointment Setting
A comprehensive, integrated multi-channel appointment-setting strategy should include multiple calls-to-action, as well as
connectivity to branch associates for scheduling and conducting sales conversations.
Transition Customers to Branch Pull Customers into Branch
Source: Novantas
appointments also provide branch all the right pieces together holistically • Defined sales practices for setting
associates the ability to prepare for a will yield the best results. A compre- and conducting pre-scheduled
quality sales conversation. In short, hensive and integrated multi-channel appointments, including customer-
proactive appointment setting provides appointment-setting strategy should oriented services or assistance.
an opportunity to increase branch include the following components For banks that track drop-off from
sales productivity and effectiveness. (see Figure 2): various points of the online application
Also, linking inbound meeting requests • Digitally enabled customer process, the value of integrated multi-
with outbound meeting offers to appointment setting throughout channel appointment setting will be
consumers perusing a bank website online and mobile channels, demonstrable. If only a fraction of
can tie together the virtual and the available in both the public as online drop-offs instead take up an
physical worlds for a bank’s existing well as secure (online/mobile in-person appointment, pull-through
customers who are shopping on the banking) environments; rates (depending on the difficulty of
bank website. While it may feel like • Consistent use of appointment- the application process) could as much
“Big Brother” to some — getting con- focused “calls to action” in all as double.
tacted by the bank after reviewing its digital and direct marketing; With the change in customer
website — several banks are already • The ability for both customers preferences toward digital channels,
marketing digitally to existing cus- and bank associates to schedule the use of multi-channel appointment
tomers based on their online shopping. (and re-schedule) appointments setting is one capability that banks
Proactive outreach for an in-branch on a common platform, regardless can simply and easily implement.
appointment is the logical next step to of originating source; It can help customers in migrating
helping meet customer needs. • Integration of digital marketing, across the digital divide, and ensure
contact management, and appoint- for the bank more face-to-face quality
KEY COMPONENTS AND ment management platforms; sales conversations.
ADDED BENEFITS • Proactive outreach via a calling
While a number of North American plan to existing customers to Andrew Hovet
banks have embraced successful schedule in-branch appoint- Director of MDS, New York
appointment-setting programs, putting ments; and ahovet@novantas.com
SALESSCAPE SYMPOSIUM 2017 | 11Accelerating Digital Migration:
Necessary, Tough and Rewarding
BY LEO RINALDI AND ANDREW HOVET
In the next phase of customer migration from branch to digital, every
aspect of face-to-face and voice-to-voice interaction needs to be mapped
and evaluated for digitization.
The smart phone era — heralded with full set of transaction metrics or a formal not just about economics and technol-
the iPhone’s launch in 2007 — has companywide plan. In the early going, ogy. Considerations must also include
accelerated in earnest what prior bank- this sparked enough true channel substi- the promotion, education, incentives,
ing innovations only suggested: true tution to permit cost-saving reductions and segment tailored approaches that
consumer substitution of transaction in teller staffing across the industry. are needed to usher customers and staff
volumes to electronic channels from the Now many U.S. branches are through delicate transitions.
branch. As a result, digital migration approaching feasible staffing mini- Winning banks will pull all of this
is now a key cost reduction lever for mums, and resulting staff productivity together in a holistic digital migration pro-
banks. Additionally, research indicates improvement has slowed. To reach the gram that includes four major components:
that great self-service experiences can next level of meeting customer expecta- • Measurement. The bank needs a
enhance customer loyalty by providing tions and further improving efficiency detailed map of migration rates
convenience, immediacy, and reduc- banks must go further and automate across all channels for all transac-
ing customer effort. But progress on even more branch services such as tions, service, and sales — not just a
migration is uneven, and the stakes are softer inquiry or informational services. few areas, but the total picture.
getting higher, creating a mandate for Simultaneously, they must look at • Segmentation. Channel-based treat-
action in 2017. accelerated branch consolidations and ments must be tailored for major cus-
The banks that have proactively closures, which is potentially far more tomer groups, especially remaining
harnessed this channel substitution disruptive to customer relationships. heavy users of branch and call cen-
trend are gaining ground, taking the At this point, executives must ask, ter services.
lead in slashing branch transaction bur- “Do we have a thorough plan to digitize • Prioritization. For solid planning,
dens as more of their customers switch more of the branch experience as the all migratable channel activities
their daily banking activities to mobile/ physical network shrinks? Do we have a must be analyzed and financially
online banking and advanced ATMs. plan for originating online the relation- quantified, clarifying tradeoffs and
However, it is becoming clear that ships that were otherwise originated in potential rates of return on various
many others are mired in passive, par- the branches being closed?” digital investment options.
tial programs, with real implications for In this more comprehensive phase • Execution. A customer-centered,
future competitiveness. of digital migration, every aspect of cross-functional program is need-
Many banks have concentrated in a face-to-face and voice-to-voice cus- ed to assure smooth, appealing
few high-visibility areas (e.g., ATM and tomer interaction needs to be mapped transitions and wide consumer
mobile deposits), proceeding without a and evaluated for digitization. And it is acceptance, participation, and
12 | SALESSCAPE SYMPOSIUM 2017ACCELERATING DIGITAL MIGRATION: NECESSARY, TOUGH AND REWARDING
retention as additional layers of an equally sharp increase in branch First, the substitution effect is
digital self-service are rolled out. reductions (Figure 1: Mandate for Further real with image deposits leading the
Transaction Automation). This sets the way. With new technology such as ATM
THE ROAD AHEAD realities of minimum branch staffing on digital imaging, mobile phone cameras,
Digital migration would be much more a collision course with aggressive produc- and OCR software, banks can now digi-
manageable in a forgiving setting of high tivity assumptions, with the bank stuck in tally receive checks for deposit, directly
banking profitability. But the current the middle. In fact, our research indicates displacing teller activity and branch
and foreseeable environment is one of that teller productivity improvement has visits. Customers are rewarded with new
pressing conditions and hard choices. hit a period of diminishing returns, with convenience and enjoy expanded service
Recently hovering at a roughly 9% return staff reductions out-pacing declines in outside of branch hours, not to mention
on equity, industry profitability is down branch transactions. better availability. With such a powerful
sharply from a 13.4% average prior to the The only way out is additional trans- precedent in place (substitution with an
2007-08 housing crash. action automation that will further lower appealing customer benefit), the stage is
In turn, banks are eager to reduce the branch workload. However, remain- set for accelerated digitization.
branch-related expenses, and staffing ing branch transaction volume will Second, the financial urgency is
in particular, as transactions go digital. be more difficult to migrate (Figure 2: real. Branch reductions can be a primary
Novantas research reveals that over the Breaking the Barriers to Further Migra- source of cost savings, needed not only
past five years, the industry has engi- tion). This challenge is coming at a time to improve profitability, but also to fund
neered a 20% decline in average teller when more aggressive branch consol- critical transitions to digital channels
staffing per branch in full-time equiva- idations and closures will be needed to and offerings. Accelerating channel
lents, from 379 FTEs per 100 branches wring out the overhead associated with substitution paves the way, but must be
in 2011 down to 302 FTEs per 100 units obsolete physical capacity. managed correctly. Yanking the rug out
in 2016 — a roughly 4%-5% decline per To be sure, variations on this call to can provoke customer defection rather
year. In contrast, branch counts have action have been floating around for 20 than growth, with a direct impact on core
come down by a lesser 1%-2% annually years, with pundits repeatedly hailing an deposit formation.
during the same period. impending industry inflection point in Third, the competitive urgency is
Looking out over the next five years, branch usage that has historically never real. While most banks now offer remote
we expect banks will need an additional materialized. But this time around, it deposit capture via mobile and ATMs,
20% proportionate staff reduction, plus appears to be different: the largest banks have led the way
FIGURE 1: Mandate for Further Transaction Automation
Staff efficiency and branch consolidation will need to accelerate, and consumer digital migration will be essential to progress.
U.S. Branch Count
-1% to -2% CAGR
-2% to -4% CAGR
379
-4.5% CAGR Tellers per 100 Branches
365
331
312 302 -4% to -5% CAGR
2011 2012 2014 2015 2016 2017E 2018E 2019E 2020E 2021E
* Teller FTE as of second quarter of the year
Source: Novantas SalesScapeTM Comparative Analytics
SALESSCAPE SYMPOSIUM 2017 | 13ACCELERATING DIGITAL MIGRATION: NECESSARY, TOUGH AND REWARDING
FIGURE 2: Breaking the Barriers to Further Migration
Following early substantial progress with deposit migration, remaining branch transactions will be more difficult to migrate.
58% Deposits 29% Withdrawals/Check Cashing
• Small businesses have large volumes • Check cashing not enabled on ATMs
of checks and cash • Long hold times may degrade ATM experience
• Large dollar deposits may be riskier to
accept remotely
4% Payments
• Timely acceptance of loan
payments is critical
7% Other 2% Transfers
• Large variety with small volumes • Large external transfers have fraud risk
Other category includes Account Maintenance, Admin Corrections, Card Maintenance, Checking Inquiry, Close Account, Fee reversals, New
Accounts, Stop Payments, Portal Inquiry
Source: Novantas SalesScapeTM Comparative Analytics
and seen both better customer acqui- migration and channel substitution, analytic teams to measure transaction
sition rates and lower branch usage. banks will need a holistic migration pro- activity across channels. We believe
In contrast, other banks have taken gram that addresses critical questions many others must and will follow.
a “build it and they will come” pos- and capabilities in the four major areas The bank needs a deep under-
ture, with weak change management of measurement, segmentation, prioriti- standing of different customer seg-
support. The result: weaker customer zation and execution (Figure 3: Keys to a ments, their transaction patterns, and
channel shift and lowered returns Holistic Digital Migration Program). their likely migration rates. A particular
on automation technology investment. The bank must develop sophis- focus is needed on behavioral drivers:
Meanwhile, the proactive players race ticated measurements of migration where is channel migration stalled; what
ahead, realizing more digital migration rates across channels over time for all is preventing further switching; and
benefits that permit further investment transactions, service, and sales. Many what will motivate significant change.
in additional initiatives. activities were traditionally measured For any transaction type, a small
Finally, migration efforts are one separately within different channel percentage of customers will generate
key element of a broader repositioning silos, depriving management of a the majority of transactions. Even among
of the bank for an increasingly digital full customer-centric view across all these customers, some will be using
future. These investments are more than channel touchpoints. digital channels sparingly; others have
just tactical moves to capture near term In order to set effective migration never used them at all. Some will need
efficiencies, enhance customer experi- targets, it is critical to see how customer face-to-face technology education; oth-
ences and maintain customer loyalties. behavior is changing and moving from ers may respond to promotion and/or
Migration programs also build long term one channel to another by transaction incentives. Small business customers will
digital capabilities and cultural changes type. For example, a year-over-year need a separate and distinct plan, given
that are core to reinventing the everyday view may indicate that deposits are still their importance and different needs. So
banking experience. migrating to mobile, but ATM deposits the actions a bank must take will differ by
are stalled. Some of the largest and most segment.
STEPS IN MANAGING THE MIGRATION advanced institutions in the field of To prioritize properly, the bank
To reach this optimal zone in digital digital migration now have dedicated needs a comparative analysis of poten-
14 | SALESSCAPE SYMPOSIUM 2017ACCELERATING DIGITAL MIGRATION: NECESSARY, TOUGH AND REWARDING
FIGURE 3: Keys to a Holistic Digital Migration Program when it reformats, combines or closes tradi-
For a solid digital migration program, banks need to develop capabilities in four tional branches. Novantas research shows
key areas: measurement, segmentation, prioritization, and execution. that the closure attrition impact is much
lower for multi-channel or digitally-centric
Migration rates by channels for all transactions, service and sales customers than for branch traditionalists.
Increasing digital adoption across transac-
Customer-level movements across channel by transaction type
MEASUREMENT tion, service, and sales dimensions will
Dedicated analytics teams to measure activity across channels support not only the reduction of FTE
staffing requirements, but will also allow
Deep understanding of transaction behavior by segment for the large, “chunky” cost take-outs
Barriers to further segment migration; what will it take to overcome provided by branch closures.
SEGMENTATION Segment migration scenario.
DIGITAL MIGRATION PRIORITIES
The levels of branch consolidation
Business cases and ROIs for potential digital investments and staff operating efficiency needed
Key assumptions, incentives for future digital-centric competition
PRIORITIZATION Best path of projects over time simply cannot be achieved without
extensive customer channel substitu-
tion. Once executives understand this,
Cross-functional migration project roadmap, with project office they will place digital migration high
Branch-level migration targets by transaction type on their list of corporate priorities.
EXECUTION Most of the early action in digital
Training, incentives, metrics, customer feedback loops
migration has centered on deposit activ-
Source: Novantas ities, but deposit migration is just the
beginning of a long journey to digitize all
tial rates of return on various automa- A better sense of digital priorities aspects of the banking experience. New
tion investments. Often priorities are will emerge as this migration investment technologies are unlocking a large num-
set without an apples-to-apples business analysis is completed across the full spec- ber of opportunities across transactions,
case analysis. Specifically, all migratable trum of transactions, service, and sales. service, and sales.
channel activities must be analyzed and Finally, the bank needs a cross-func- In fact, the “shopping” component of
financially quantified. Current transac- tional migration execution program. bank sales has already substantially gone
tion volumes and associated costs must A “migration project office” is needed to online, and as sales fulfillment improves,
be determined. For example, if customers influence and track substitution behav- even more change is in store. In combi-
are checking current balances by calling iors and resulting staffing levels. Great nation, this expanded array of revenue
the contact center or visiting their branch execution begins with a realistic plan. and efficiency initiatives will generate
banker, the total cost of this service can Channel migration is challenging because self-funding for additional digital invest-
be computed. it requires teamwork and coordination ments and simultaneously transform the
Then a realistic projection of across areas such as retail, digital, market- bank into a true omni-channel organization.
migration rates to automated channels ing, and real estate. The catch is proactive management
is needed. In many cases, the bank has For example, many banks are retool- of customer migration. Coordinated
already provided digital options for cus- ing branch formats to reduce space for efforts across functions (e.g., marketing,
tomer activities, but activation and usage teller lines while providing more ATMs finance, and staffing) are needed to set,
rates still lag. Here, incremental outlays and digital stations for self-service or measure, and achieve migration targets.
may be required — e.g., marketing, com- assisted-service. These reformats are To accelerate the journey, many banks
munications, employee incentives — to challenging to execute without disrupting are in need of a holistic planning exer-
accelerate customer transitions. the customer experience, and the level of cise in 2017 that begins to address the
Also, a bit of creativity helps in evalu- synchronization required is similar to the specifics of this challenge.
ating the best way to support a particular complexities of a new store opening or a
digital migration objective. For example, product launch. Yet even more of this type Leo Rinaldi
instead of encouraging customers to use of activity is necessary if the full benefits Director, New York
mobile banking to check their account of migration are to be realized. lrinaldi@novantas.com
balances, perhaps real-time alerts and An additional benefit of digital
balance updates could be provided fol- migration is that customers begin to relax Andrew Hovet
lowing transactions, negating the need to their general sense of branch dependence, Director of MDS, New York
“look-up” information. becoming less likely to leave the bank ahovet@novantas.com
SALESSCAPE SYMPOSIUM 2017 | 15Branch Role Chaos:
Call to Action on Staffing
BY DARRYL DEMOS AND DALE JOHNSON
Retail banks must start preparing now for local branch sales in a
digitally-eroded environment, which will require new standards for
staffing analytics and planning.
As consumer digital migration drains Building on this assumption, it shows that universal bankers mostly
ever more branch traffic, banks have been seemed logical to reorganize branch help with transaction and low-end sales
working through a delicate transition with staffing around “universal bankers” productivity. The more important metric
branch staffing. who both serve and sell. The goal is to — overall financial return on branch sales
Amid all the pressing questions improve efficiency by reducing the FTE staff — has continued to deteriorate.
— sales, service, headcount, skills, commitment to teller activities while Today roughly two-thirds of all branches
etc. — executives drew comfort from preserving sales capacity. fail to generate sales returns sufficient
the assumption that they at least had Based on a recent Novantas study to cover their fully loaded staffing costs.
a rough idea of how consumer branch of 12,000 U.S. branches, roughly one of The problem goes from bad to worse
usage would shake out. Ultimately, it every eight units across the industry when considering the future locus of
has been thought, branch servicing now makes prominent use of universal sales: digital vs. branch. For years it was
would decline but not disappear, and bankers. At least 50% use some form of thought that consumers would never
branches primarily would become sales flexible staffing. trust ATMs with deposits, let alone
centers, a place where the majority of But even as more banks (and con- mobile phones. Now digital deposits are
customers will continue to go to orig- sultants) jump on the Universal Banker the norm, both ATM and mobile. What
inate checking and savings accounts train, it is increasingly at risk of running guarantee is there that branch account
and apply for loans. off the tracks. For starters, our analysis origination will stay the norm, simply
16 | SALESSCAPE SYMPOSIUM 2017BRANCH ROLE CHAOS: CALL TO ACTION ON STAFFING
because 90% of accounts open in branch- chaotic transition. Each bank must Warning signs have emerged, as
es today? All the evidence points to the be able to delve within its network to revealed by Novantas research:
obvious answer — nothing. Counting on understand the scope and shape of sales When tellers assume additional
branches to remain the focal point of potential in each locale. This knowledge responsibilities with sales, they mostly
simple sales is naïve at best. becomes the foundation for a potentially succeed with low-value checking and
In a not-so-distant future scenario, extensive suite of market-tailored sales savings accounts. The needle barely
branch sales volume may be cut in half staffing configurations. moves with business deposits and
by online account origination, with the loans, consumer loans and mortgages.
greatest impact on simple sales. Most WARNING SIGNS Meanwhile credit card origination,
banks will be fighting for segment, geo- In a post-recession era of slack the low-hanging fruit for tellers,
graphic or product niches, often using consumer demand and digital disrup- visibly declines amid all the other
multiple strategies within a network. tion, banks have had two main branch distractions. Overall there is little or no
The use of specialists will become crit- priorities. One is to deepen relation- improvement in sales returns relative
ical in tapping high-value opportunities ships and sell more to each customer, to staffing expense.
for customer acquisition and cross-sell. supporting growth by capturing “share When experienced branch sales
The upshot is that the branch staff- of wallet.” The other is to tightly econ- staff is asked to assume teller respon-
ing challenge is much more profound omize distribution in tandem with sibilities, the pros are distracted from
than many bankers realize. To meet declining transaction activity. the critical priority of high-value
evolving customer preferences and The universal banker concept customer acquisition and relationship
boost the critical metric of return on never cleanly fit the bill. But it seemed expansion. Transaction productivity is
sales force, banks will need a new retail like a way forward for banks looking to improved, but again, not sales returns
sales strategy and workforce. For many, preserve sales capability while aggres- relative to staffing expense.
universal bankers are an interim step on sively reducing branch headcount. Rather than trying to perfect what
a longer path, but the universal banker Roughly five years into the trend, now appears to be an inherently limited
role as we know it today — transaction adoption has been substantial, with arrangement, banks already employing
service and sample sales — is dead in even more in the offing. But there also the universal banker model should view
the future. is enough data to evaluate progress so it as a transition step. Others still on the
Adroit use of local market analyt- far (Figure 1: Impact of Universal Bank- sidelines should probably skip it. Even
ics will be essential in managing this ers on Product Sales per FTE). bigger productivity challenges are in
store and the time to prepare is now.
Radical changes are coming in
FIGURE 1: Impact of Universal Bankers on Product Sales per FTE account origination. Coping measures
While universal bankers improve product unit sales per FTE, most additional will not suffice. While 85% to 90% of
volume is of low value. Economic returns do not improve. retail products are sold on-site today,
this ratio could be cut in half over the
next five to seven years, matching the
Baseline with traditional branch = 9.0 recent rate of decline in teller transac-
product sales per FTE per month tions. In turn, the coming serious dig-
CONSUMER CHECKING +0.75 units
ital erosion of the branch sales foun-
Deposits — most dation, especially simple sales such
CONSUMER SAVINGS & MMDA +0.55 units volume is low-value
checking and
as checking and savings accounts, will
CERTIFICATES OF DEPOSIT –0.15 units
savings cannibalize the fundamental benefit of
BUSINESS DEPOSITS +0.2 units
the universal banker.
This hollowing out of branch sales
BUSINESS LOANS –0.2 units Loans — most points to role chaos ahead. In the not-
CONSUMER LOANS +0.2 units categories flat,
so-distant future, specialists may have
HOME MORTGAGE –0.2 units credit card
origination falls to carry most of the load in high-value
CREDIT CARDS –0.17 units
sales conducted face-to-face. They will
have to gin up business across broader
NET +0.98 units
territories encompassing multiple
New level of 9.98 sales per FTE branches, with branch sales generalists
becoming a backstop for technology
assistance, complex servicing and the
remaining simple sales that slip through
Source: Novantas study of 12,000 U.S. branches via SalesScape the digital net.
SALESSCAPE SYMPOSIUM 2017 | 17BRANCH ROLE CHAOS: CALL TO ACTION ON STAFFING
FIGURE 2: New Standards for Staffing Analytics and Planning
In setting staff capacity, configuration and goals, the top priority is to align resources with the emerging picture of sales
opportunity in each locale.
OLD STAFFING MODEL NEW STAFFING MODEL
Service first — Focus on wait times Sales first — Zero-based staffing;
DECISION LOGIC and session times as drivers of the local market goals matched with
customer experience bank segment strategy
Internally focused — Detailed Customer facing — Optimize
ACTIVITY tracking of investments and roles, practices and activities to
ANALYTICS operations; expense dynamics only support the sales agenda
Historical trends — Projections
Market “fair share” — Plans and
based on “+/–” last year’s results
PLANNING expectations based on local market
used for capacity plans and sales
potential, competitive ≠ stance
goals
Skills sometimes considered for Skills actively factored into sales
INDIVIDUAL scheduling — Contact center plans — Individual performance &
SKILLS approach experience specifically considered
Source: Novantas
ANALYTICALLY GUIDED There are important management diverge at points, the analytics should
TRANSFORMATION implications in this transition: source from the same fact base.
All retail banks have serious work to do Staffing and performance manage- Nothing is more valuable than data
in preparing for a digitally-eroded envi- ment are not separate activities and on actual sales performance in a market,
ronment for local branch sales. But many need to be interlinked. New strategic by segment, to plan the future transition.
compound the difficulty by clinging to staffing analytics consider both oppor- Old-school benchmarks calculated at
traditional practices and metrics instead tunity-based goals and local team the bank level do not help to pinpoint
of looking ahead. Scheduling-led staffing performance in setting optimal staffing local strengths and deficiencies, nor the
tools are prevalent in the industry and targets. New data sources and analytical corresponding granular changes needed
still have a place, for example, but are tools will be needed to reach this level of to better manage this transition. The
wholly inadequate to the task of staffing detailed planning. appropriate calibration of targets will
transformation in a chaotic setting. Opportunity analytics need to be need to be understood branch-by-branch.
The number one priority is to estab- driven from the bottom up. The bank Role chaos in the branches is just start-
lish a market-led transition. Historical needs a statistical understanding of how ing and the universal banker role is not the
performance, service benchmarks and 1) market characteristics; 2) network pres- end game. A shift in mindset and invest-
back office productivity metrics will ence; and 3) branch-specific format and ment — from efficiency to effective cus-
not suffice (Figure 2: New Standards for customer composition contribute to sales tomer interaction and economic returns
Staffing Analytics and Planning). of specific products. on the sales force — will be required as
Each local market plan should start Linkages are needed between the banks transition through evolving staffing
with a clean sheet of paper, with the analytics that drive network planning models over the next five years.
top entry being sales opportunity. How and those now needed for staff planning.
much? What type? What is the likely Too often they are driven by people in Darryl Demos
range of scenarios two years from now, different silos and not connected. We are EVP, New York
five years from now? What sales staffing seeing more of a trend in combining these ddemos@novantas.com
configuration (generalist, specialist, etc.) two teams, but that is not enough. The
will best capitalize on this emerging bank needs a clear set of analytics that Dale Johnson
opportunity, and what is the organiza- can be used across these domains. While Director, Chicago
tion’s migratory path? site selection and staffing decisions will djohnson@novantas.com
18 | SALESSCAPE SYMPOSIUM 2017Digital Investment:
Success Driver or Bottomless Pit?
BY PAUL KADIN
Digital channels are increasingly influ- budgets on account of weak online sales dominance in digital features and func-
ential in revenue growth and customer fulfillment, for example, overlooks the tions, but rather about: 1) assuring that
profitability in banking. Translating that growing importance of digital channels the bank’s digital channels and products
general sense into specific business in winning shopper attention and driv- achieve at least competitive parity in
cases for development and resource ing purchasers to the branch. the areas consumers care about most; 2)
allocation has been difficult, however, A better approach is to evaluate the incorporating a small number of novel
given the complexities of online and financial contributions of digital within and convenient features; and 3) bringing
mobile channels and loose linkages with the context of all the bank’s channels and these features together in an easy-to-use
tangible performance improvement. capabilities. Approaching the question in design with strong curb appeal. With this
The uncertainty has left senior lead- this way, there are three anchors for busi- tenable goal accomplished, the bank’s
ership in an untenable position. Mindful ness case development: 1) boosting pri- task is then to promote digital offerings
that digital channels will continue to mary relationship acquisition by cultivat- aggressively, driving home the message
force changes in the operating model ing an association with “leading online/ that the bank is making its customers’
and revenue/expense equation, execu- mobile banking” among consumers; 2) lives easier through innovation.
tives at most regional banks are actively harnessing digital channels for cross-sell; One typical approach starts with
soliciting cases for new or expanded and 3) facilitating further transaction shoring up functional gaps in desktop
digital investment that are worthy of migration (branch to digital, call center banking (redesigning as well if usability
presentation to their boards. to digital), permitting corresponding cuts is poor or the look is outdated). Then the
But these same leaders are casting a that measurably lower the total cost to bank may want to roll out a new feature,
skeptical eye on resulting internal propos- serve (yes there are further possibilities). for example, a snazzy smartphone app
als and funding requests, many entailing with video check deposit, swipe-balance
significant outlays. Thinking back on LEADERSHIP EQUATION and other features. While in evidence
earlier waves of digital investment initia- The first of these investment cases, elsewhere, such features are still new to
tives that delivered lackluster results, they cultivating association with the attribute many consumers and easy to promote in
grapple with the question of how things “leading online/mobile banking,” follows an online ad or even on a billboard.
are going to be different the next time through on what Novantas analysis Addressing these and other gaps
around. Despite years of investment and is now clearly showing: this attribute helps to address the fundamental ques-
persistent analyst predictions, for exam- drives primary checking acquisition. tion that shoppers ask in an overcrowded
ple, online account opening is still a weak It has to do with meeting early-stage banking market where competitors are
tool in landing new business, damaging shopper expectations so that people many and standout differentiation is
the credibility of many early advocates will move beyond general awareness of rare: “Which bank provides the easiest
for heavy digital investments. a candidate provider and give it active and most convenient way to get the
The digital channel planning chal- consideration for new business. services that I need?” Importantly, there
lenge is real, yet often made more diffi- Boosting primary checking acquisi- are both functional and perceptual com-
cult by constricted calculations that omit tion through a strengthened perception ponents in answering this question, both
customer/market considerations and of leading online/mobile banking is not of which require ongoing attention.
cross-channel ramifications. Crimping a winner-take-all game; it is one many Even at this stage of the digital
digital marketing and developmental banks can play. It is not about absolute revolution, however, many bankers
SALESSCAPE SYMPOSIUM 2017 | 19DIGITAL INVESTMENT: SUCCESS DRIVER OR BOTTOMLESS PIT?
over-rely on the traditional drivers of capabilities? Our research firmly sug- not generating sufficient results within
perceived convenience: gests otherwise. There is evidence that online and mobile banking today.
Share of branches. While local branch association with this attribute is fully The biggest barrier is the lack of a
presence continues as the prime influ- attainable by regional banks and even cohesive strategy that pulls the neces-
ence in shopper selection of a new bank, super-community banks as well. sary combination of levers: customer
this trend is now tapering, reflecting Winning credit for online/mobile analytics, offer engine, display options
the increasing digital orientation of the capability requires substance and voice: and digital fulfillment. A successful dig-
customer base. As previously reported, targeted investment to deliver essential ital cross-sell investment plan will com-
our research shows that two of every functionality plus appropriate marketing bine interrelated success elements from
five retail banking customers are now support to promote consumer awareness marketing, analytics, product design and
“thin-branch ready,” embracing digital of the digital value proposition. It does the digital channel itself.
channels for transaction services and, not require superiority. Specific research In the Novantas experience, the best
increasingly, when searching for new methodologies can be used to identify foundation for digital cross-sell strategy is
banking products and providers. Branch competitive gaps and prioritize correc- a customer segment- and lifecycle-based
density is less and less of a requirement. tive investments. prioritization of needs-based opportunity,
Share of voice. Local marketing and providing an organizing principle for the
media spend will remain important in CROSS-SELL CONNECTION scope and staging of investments. The
reinforcing customer perceptions of con- Digital cross-sell is becoming a best cross-sell opportunities typically
venience. But branch-related messaging critical driver of customer lifetime value. spring from the household cash manage-
is giving way to a multi-channel con- While banker-customer interaction in ment relationship, as anchored by the
struct, reflecting digital’s growing role in the branch has traditionally supplied primary checking account.
customer perceptions and satisfaction. both the relationship prelude and The challenge is understanding
The newly ascendant third main fulfillment destination for account origi- evolving core customer needs through a
driver of perceived convenience — nation, precious little customer face time multi-channel lens, and then finding the
leading online/mobile banking — is is available via branches these days. By most effective ways to digitally promote,
highlighted through our Shopper Study overwhelming proportions, online and present and fulfill relevant offers. We
research program. We collected data mobile banking now represent the most mention this first because although there
on thousands of recent and prospective common everyday touchpoints with are defined progressions of execution
purchasers across dozens of U.S. mar- most customers, with many transacting capabilities needed to support online
kets, and then correlated respondents’ at the branch less than once a month. and mobile cross-sell, customer-focused
reported perceptions and behaviors with One excuse for denying this trend is strategies take precedence.
various local market supply-side factors the supposition that affluent, high-value With that said, our multi-bank
such as branch and ATM share, media customers (with large representation research indicates that regional banks
spend and direct mail volume. from older age groups) remain wedded are generally falling behind the national
We found that banks designated by to the branch, both for high-touch service banks and direct players in fleshing out
survey respondents as having “leading and rep-facilitated account origination. the execution capabilities needed for
online/mobile banking” had a distinct But contrary to common perception, effective digital cross-sell (Figure 1: Three
advantage in winning new-to-bank pri- our research shows that higher-income Stages of Digital Cross-Sell Capability).
mary checking accounts versus banks customers are actually less interested While Stage 1 players have little or
that only scored well on share of branch than others in conducting routine trans- no ability to route marketing messages
and share of voice. For a large or mid-size actions in the branch. Moreover, higher through digital channels, for example,
regional bank, a typical research finding income customers are increasingly a select group of Stage 3 players have
is that a five percentage-point increase in likely to shop for credit cards and other developed integrated messaging
shopper association with leading online/ well-understood products online, posing through all digital channels (e-mail, text
mobile banking wins one additional per- serious limitations for branch-centric message, web site, etc.). In the mobile
centage point of origination share. cross-sell strategies for these products. space, Stage 1 players can only partially
This presents a powerful opportu- The situation poses one of the great replicate the functionality of the bank’s
nity. For a bank currently pulling a 6% sales challenges in banking, which is public web site, while Stage 3 players
share of primary checking account churn somehow harnessing impersonal digital have replicated the full functionality of
in a given market, advancing to a 7% channels to recreate the rapport and the site for mobile-specific access.
share represents a potential 17% increase one-on-one context that had been almost
in origination volume. exclusively relied upon for relationship TRANSACTION MIGRATION
Is this potential advantage restricted expansion. Yet most regional banks are A third business case for digital invest-
to only the largest banks having the not doing nearly enough to advance ment is transaction migration — shifting
resources to build out best-in-class digital cross-sell — and they certainly are even more daily banking activity to alter-
20 | SALESSCAPE SYMPOSIUM 2017You can also read
