Welcome to another decade, banking. Efficiency needs to top our lists of resolutions: Meaning, institutions must become efficient enough to not only survive a rapidly changing landscape, but also thrive as competition ramps up from both technology companies focused on banking and tech players once relegated to social media and e-mail.
This industry “faces a new combination of circumstances that are giving special impetus to the need for efficiency,” wrote Timothy J. Reimink, managing director in Crowe’s financial institutions consulting group, in Six Strategies for Improving Banks’ Operating Efficiency. “Changes in customer preferences and expectations, new competition and new technologies are transforming the nature of banking.”
Reimink offers targeted suggestions including:
» Realigning business to focus on more cost-effective and profitable areas.
» Optimizing channels and reconfiguring roles, duties and staffing within the branches.
» Improving process costs.
» Boosting staff productivity to handle more transactions and greater volumes of activity with the same number of personnel.
» Using technology to allow customers to make transactions or get information without involving employees.
» Improving vendor relationships.
However, as he pointed out, “It’s important to recognize that long-term efficiency is impossible to achieve without a corporate culture that supports and values it.”
Employees — as the people who not only get the jobs done, but also interact with customers — play a key part in achieving any sort of expanded efficiency. However, any hint of change proves notoriously difficult to handle among staffers who worry about finding themselves redundant, trapped in a job they don’t like or, in the worst case, laid off.
“Increasing efficiency means driving change,” said Jeff Skipper, chief executive of Jeff Skipper Consulting, a Canadian company that works with Fortune 500 companies and nonprofits to define and accelerate strategic change. “There can be no returns on that change unless employees buy in.”
If you want to gain the level of credibility you need to actually sell change to employees, involve them in the process from the beginning, said Robby Slaughter, principal of AccelaWork, an Indianapolis-based business improvement firm focused on workplace productivity and organizational efficiency.
“The most important and most common mistake is to make changes without involving the stakeholders who will have new patterns,” he said. “Too often, management decides what will be done, and this only further alienates individuals.”
In his white paper, Reimink writes that significant opportunities come from tools with broad applications beyond banking: using established performance management techniques, such as clearly defined expectations and scorecards; implementing improved motivation and rewards systems; and instituting better training and supervision.
Other tools include visible metrics and performance charts along with “line-of-sight” incentives, such as bonuses that directly relate to individual or team performances and practices, not just to institutional performances. What’s more, many institutions benefit from redefining job roles, offering more flexible work arrangements, providing mobility for off-site work and outsourcing more specialized tasks, he noted.
Interview the staff
When looking for specific change areas, time and motion studies (a concept borrowed from classic engineers) can be helpful, said Slaughter. However, interviewing employees directly remains “the best way to understand what parts of the job are engaging and which parts are boring, as well as finding opportunities for improving efficiency,” he said.
Get started by asking three simple questions, suggested Rachel Cooke, founder of Lead Above Noise, an organizational development firm that has worked with Barclays and American Express.
» What are your biggest pain points in doing your work?
» What are the implications of those pain points?
» What are one to three simple solutions you would implement to resolve them?
Your findings can vary from the specific, tactical level to industry change. According to Cooke, one financial client realized it had a complex way of segmenting clients that had clients hurting both customers and employees, she said. The company simplified its segmentation model, leading “to greater role clarity amongst employees, leaving teams empowered to better own, collaborate and service the customers,” she said.
More widespread has been the change to the universal banking model, which BAI and Kiran Analytics detailed in “Branch Transformation Rolls On.” In the survey, bank respondents report that employees like the model that offers customers the ability to work with the same banker because it offers employees a more rewarding career path. For example, Regions Bank, according to the survey, offers five tiers ranging from tier 1, a transaction-heavy banker, to tier 5, a specialty role more centered on interaction.
The report also found that branch technology, including teller cash recycling, workforce management and digital adoption training, are hot areas. Regions Bank, like other industry players, has replaced the old-fashioned teller line with workstations or pods that speed up and simplify the process.
Get the team’s buy-in
But introducing change to employees requires finesse, particularly if you’re introducing job changes, buyouts or layoffs. “It can’t be an edict coming from the top down, said Cooke. “The biggest mistake to avoid is having senior executives identify and implement solutions without engaging frontline employees first,” she said. “Otherwise solutions often miss the mark and employees feel resentful for not having been consulted.”
Skipper suggests relying on the three H’s when introducing change:
» Help: Employees want to know: How will this benefit me personally? Will it save time, save effort or increase work enjoyment?
» Heart: How will this increase the meaning of my work? Will it make happier customers, benefit my community or benefit a cause?
» Hope: How will this enable a better future? Will it improve the environment, enrich life for future generations or promote some other equally noble cause?
“Every change, even an efficiency initiative, can touch on all three, and all three are part of the employee experience,” he said. “Employees are looking for those touchpoints more and more.”
When it comes to retraining — which is often the case as the industry increasingly becomes more digital — ensure that it happens between peers, rather than from the top down, Slaughter said. “That way, individuals learn new skills and then share them with their colleagues, rather than being told what to do by management,” he pointed out.
Involving the employees emotionally in the reason, the process and the outcome is essential. Why? “For the same reason that having happier employees can improve any business,” he said. “When people are emotionally invested in their work and their relationships with customers, they do more. When they are just punching a clock, they do less.”
Dawn Wotapka is an Army brat who graduated from NC State University and NYU. She covered the housing crash and public companies for The Wall Street Journal. She enjoys running, overnight oats and business books.
Holly Hughes, BAI CMO, will share BAI’s latest banking channel research and host a conversation with Colleen Wilson, Vice President, Product at MANTL, on what the trends mean for financial services leaders....
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