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BUILDING CUSTOMER RELATIONSHIPS AT THE
FRONT LINE REMAINS A MAJOR CHALLENGE, BAI RESEARCH SHOWS

CHICAGO, December 2 – BAI, a leading financial services professional organization, has released new industry research on the challenges financial services providers face executing relationship-based strategies at the front line. Key findings from “The Front-Line Factor,” a study conducted by BAI Research and partners Oracle Corporation and De La Rue Cash Systems, Inc., were presented to an audience of senior-level financial services executives during BAI’s Retail Delivery Conference & Expo in Las Vegas on November 17.

The study, which surveyed 500 respondents representing banks, savings institutions and credit unions of all sizes and conducted in-depth phone interviews with 38 executives from the nation’s top 50 banks, breaks new ground with its focus on the linkage between front-line performance — as assessed by bank management — and intangible assets, such as human resources.

“As branch networks continue to expand and perform an increasingly important role in driving overall profitability for financial services companies, the need to attract, hire and retain front-line employees who can interact with and service customers in a way that fosters long-term, profitable relationships increases,” said Thomas P. Johnson, Jr., BAI’s president and CEO. “The challenge lies in developing higher order relationship-building skills in employees who have traditionally been at entry-level, and increasingly on a part-time basis.”

“Banks and other financial services companies strive to deliver a relationship-oriented approach with an emphasis on service quality, and they have made enormous investments in relationship-based strategies in recent years in the hopes that they would produce better customer interactions,” said Paul McAdam, managing director of research at BAI. “But financial services executives say that their companies are falling short of achieving their goals at the front line.

“The Front-Line Factor’ indicates that a significant gap exists between relationship-building strategies and front-line execution,” said McAdam.

Common obstacles identified by respondents were:

• Staff lacks required sales skills
• Staff does not receive adequate sales training and coaching
• Front-line staff focus is on internal activities (such as counting, balancing and paperwork) versus serving the customer
• Front-line employee turnover remains high
• Teller transaction activity is too time consuming
• Too much pressure is placed on front-line personnel to cross-sell

“The challenge for financial services human resources executives is finding branch employees who excel at accurate cash handling and who exhibit an inclination toward inspired customer service—yet are willing to work for entry-level wages for the industry,” says John W. Smith, senior vice president of marketing and strategic development at De La Rue Cash Systems in Lisle, IL. Increasingly, he says, financial services companies are hiring retail sales professionals to fill these branch roles.

“Acquiring the ideal experience,” added David Klebba, senior director for financial services for North America at Oracle Corporation, “takes the appropriate front-line staff and an organization that aligns tools, training and incentives to support them.” But just as important, Klebba added, is providing consistent, actionable and high-quality customer information to these individuals. “This will make their jobs easier and more efficient,” Klebba said, “which in turn improves the overall return on investment.”

The relationship with customers begins at the point of an account opening, and most new accounts are opened in branches. Benchmarking conducted by BAI reveals that the average retail banking customer conducts two or three branch-based transactions a month. “Branches are arguably the most important retail delivery channel,” said McAdam. “Financial services companies measure customer relationships through the branch because sales and service there directly shape revenue potential.”

Financial services executives felt that leadership at the front line was one of the most critical ingredients for success and goes a long way toward distinguishing successful branches from unsuccessful ones. “They recognize that training, coaching and the ability to generate and track cross-sell leads are key areas for improvement,” said Klebba.

“Relationship management requires a long-term commitment,” McAdam said. “While there are immediate opportunities to entrench a new relationship, service excellence and a dedication to needs yields long-term results… results that can often not be accelerated.”

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BAI, founded in 1924, is the financial services industry’s leading professional organization focused on enhancing employee and organizational performance. Through events, industry and employee research, publishing and training, BAI reaches thousands of financial services professionals each year to deliver content designed to address critical business needs and to facilitate connections among financial services professionals, industry experts and solutions providers. Visit www.bai.org for more information.

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