A branch distribution executive recently described exactly what it’s like trying to keep up in a “next-gen” era: “It’s a race without a finish line,” she said. “One day, I’m reading about something mind-boggling that the futurists are dreaming up. A couple of months later, I have vendors pitching it to me. And not long after, I’ve got customers saying, ‘What, you don’t have that?’”
What she didn’t add but might have was this: None of them are cheap and none of them come with a guaranteed business case. Consider the following innovations that are quickly becoming must-have at bank branches:
Interactive Teller Machines (ITMs). As ATM capabilities continue to evolve, banks have felt pressure to replace their existing ATMs every six or seven years. Certainly, the upgrades have been well worth it to customers as these machines graduated from just dispensing cash and accepting envelope deposits to image capture, specific denomination withdrawals, data-driving marketing, integration with mobile devices and complex interactive features. Now, customers can get on-screen help with a transaction or ask questions of a live teller via video about various products. These ITMs offer a three-fer: better, faster service for the customer, cost savings for the bank and enhanced sales opportunities.
Drive-through ITMs. If walk-up ITMs meet customer needs, why not drive-through ITMs? The growing popularity of self-service technology in many fields – grocery stores, airlines, hotels – makes innovations like this less radical and more acceptable. Customers recognize the convenience involved and banks are able to keep shifting activity away from in-person tellers without sacrificing customer contact. As banks revamp their branch architecture, there is significant momentum growing around this new drive-through ITM concept.
Private and guest Wi-Fi. These days, employees and customers alike tend to expect Wi-Fi access. If your branch does not currently allow employees to log in to your private network to do email and other business, you will probably be heading down that path soon. Bring your own device (BYOD) is an unstoppable trend and when it’s driven by your best salespeople who wish to use their own devices to close deals, it’s not something you want to stop. Likewise, if you can’t enable customers to access Wi-Fi to download your PC banking applications, work with branch personnel to learn how they function or perform other bank-related work, you’ll soon be disappointing many.
Digital signage. The use cases for digital signage have become richer as the technology gets more robust. Customers recall digital signage messaging 34% better than print media. One powerful component of the business case is the centralized marketing control that ensures that each branch can be targeted with specific messages and offers. There’s little risk of a branch displaying incorrect rates and pricing and Marketing can also measure the impact of various messages at specific branches. Where once there was just a flat screen tuned to CNN, now you’re likely to see multiple screens streaming videos of the latest product offerings.
Roaming “universal tellers.” The name varies but the concept is spreading rapidly across the industry. Universal tellers are a means for banks to up-skill their best employees to provide multiple services and unleash them from the constraints of the teller line so that they can deliver precisely the service that a customer needs. Not only does this function better meet customer needs but it enables the bank to align its staffing needs with the changing traffic at their branches. Universal tellers are a technology-enabled concept because they’re only effective if they are not tethered to the bank’s network and can quickly use mobile devices to access the mission-critical systems and apps they need to deliver the service the customer is seeking.
Those are just a few of the innovations that are fully cooked and in the works today. The future will certainly bring more. Security measures will probably demand more technology hosted centrally and pushed to the branches. Compliance shows no sign of levelling off its demands, and will probably entail more technology to make it function more efficiently.
So, as you design your branch network for these innovations, what considerations should be top-of-mind? Consider these:
Standardize vs. target. While standardizing branch technology is a reasonable pursuit to some degree, not all branches want or need the same capabilities. Which of your branches can really deliver payback on a multi-feature ITM? It’s important to understand the current traffic patterns first and then estimate the traffic impact of a technology. Certainly ITMs do attract traffic, but only if there is sufficient potential in the surrounding area. There is nothing wrong – in fact there is everything right – with outfitting your branch to the needs of its customers even if those customers are decidedly past-gen. When the base changes over time, that’s time enough to change the technology.
Test and measure. No matter how much advanced research you have, you only learn what might happen when you invest in these innovations in a pilot mode. The high cost of deploying these innovations makes testing a must-do. As a regular traveler, I often check into hotels piloting a new technology, typically guest Wi-Fi access. The same with the airlines; one plane will be equipped with the latest services, the next will not.
Likewise, not all branch employees will thrive as universal tellers. Not all drive-through customers will accept video-delivered assistance. Some will never trust imaged deposits. Testing will help you refine your business case for the customers you serve.
Understand bandwidth demands. “You can never be too rich or too thin,” is a popular saying, and lots of bankers would add: “You can never have too much bandwidth.” The bandwidth consumptions of the technologies mentioned above are greater than most banks ever dreamed they would need. Today, the typical branch manages to get by with a T1 line in place for bandwidth back to corporate headquarters for core system transactions, email and perhaps limited voice and internet access. This is often backed up by a redundant T1 line. In comparison, your house might have 10 times that bandwidth in place to access the Internet.
Adding these new technologies to a branch constitutes a sizeable cost. And no matter how avidly bankers might wish to innovate in their branches, adding more dedicated T-1 lines destroys the business case for many of these gizmos. Instead, some bankers are increasingly turning to more flexible and dynamic means of building bandwidth. This can involve, for example, adding a second business-class Internet connection, combining it with the existing T1 line and making it look like a single logical connection inside the branch. Behind the scenes, based upon configuration policies, this more intelligent network can now choose which connection is best for each of the available applications. This eliminates the need for the second T-1 line, reducing costs significantly and providing capacity for future bandwidth needs, all the while delivering the security and performance the bank needs.
Evaluate outsourcing alternatives. It’s not unusual to hear bank chief information officers say,“I’ll consider outsourcing anything that’s not core banking.” And network infrastructure, while essential, is not part of the bank brand. Increasingly, bankers are seeking ways to outsource components of their network and treat it as a service, which has special appeal for banks that are struggling to lower their capital expenditures. Rather than taking a large capital expenditure hit every three to five years with branch network upgrades, bankers can smooth these out with operational expenses over time.
Yesterday’s network options worked in yesterday’s branch environment. But today’s customers and employees have greater expectations that not only require new products and services but also the network innovations that support them.
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