How branch customer and employee analytics can drive enhanced profitability
It’s likely that you have conducted specific time studies or collected data about transaction volumes, demographics and market potential in certain branches, regions or markets. Yet when was the last time you collected granular data on customer interactions and branch associate activities across the entire network? Did the data and analytics include:
- Customer arrivals and wait times?
- Service and sales interactions?
- Work sampling data that identifies how each person/position in the branch really spends their time?
Analysis of these three data elements can yield significant branch insights and potentially identify initiatives that drive enhanced profitability. “It’s important to not only know what the numbers are, but to also understand why they are what they are,” notes Heather Bellardo, principal consultant at Kiran Analytics.
There’s tremendous opportunity in making improvements based on these insights. According to a recent BAI Banking Outlook report, one-third of all branch visits are transactional in nature, and 11 percent of visits relate to new product discussions.
Here are a few common strategic assumptions and related questions to ask that will help validate those key assumptions in your branch banking model:
1. Customer-driven activity = revenue generation
Is your branch staff focused on customer driven activities?
When you aggregate the work of sampling data across branches, you’ll see what percentages of branch time go to teller transactions sales and service activities. These represent your customer-driven activities. Benchmarks indicate that industry average for this area falls in the range of 53 to 60 percent:
- How do your branches compare?
- What percentage of time is spent on lobby leading?
- How much time is spent on non-customer activities such as meetings, coaching, training or administrative work?
Compare your results to industry benchmarks to gain perspective on how your branches stack up against those industrywide. It may also reveal how far you’ve come to attain planned branch choreography, technology utilization or other goals.
2. Consistent customer experience = enhanced customer satisfaction
Does the time spent on various activities across your branches vary significantly?
Odds are the time spent on various activities will differ across branches. Looking at common transactions, it takes about 20 minutes to open a consumer checking account. If you looked across branches today, you will likely find wide variations from these benchmarks. Market opportunity, demographics, or experience of staff members will drive some of these differences. But you may also uncover opportunities to evaluate staffing decisions, reconsider the handling of standard transactions, or enhance training. All of this can all lead to a more consistent customer experience.
3. Short wait times = satisfied customers
If wait times fall below industry averages then that’s great, right?
Look at where 80 percent of your wait times fall; this screens out extremes at both the long and short end. If 80 percent of your teller transactions occur in two minutes or less but the industry average is five minutes, is that positive? Does this give you a competitive advantage? If not, you may need to reassess staffing levels.
4. Maintaining lean staffing levels = maximum profitability
But do you have enough branch staff to optimize market opportunity?
Analyzing wait times and account opening activities by day of the week may offer a good indication. It’s common to find that wait times extend on Mondays, Fridays and especially Saturdays. As you observe wait times, be aware of abandonment rates. How many of your customers just give up because the wait takes too long? Banks with Saturday hours often find abandonment spikes on that day. According to Bellardo, 10-15 percent of consumer checking accounts are opened on Saturdays as well as significant percentages of other key products. Insufficient Saturday staffing leads to lost sales.
Also measure wait times based on time of day. Do most of your staff take their lunch breaks at noon? So do your customers—thus you may see wait times spike because of improper break timing as opposed to improper staffing levels.
Parting shot: Start at the beginning
Observe what happens in your branches and collect data in very deliberate ways. This process—along with results analysis and a broad range of perspectives at the table—will help you develop a deep understanding of your branches. It builds the foundation for process improvements to enhance revenue, improve the efficiency assumptions of your staffing, and understand how to optimize the impact of branch network changes.
“Observation, data collection and analysis will provide the evidence and insights to help optimize your workforce,” Bellardo concludes. “But don’t stop there. When you’re making investments in your branches—whether that means a new branch format, system changes, regulatory changes such as accepting third party deposits, or any other changes happening in your branch network—get out there and observe and measure. Make observation and analysis a part of your institutional DNA. Your ROI will reflect it.”
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