Bankers and their boards have been thinking about their plans for the branch of the future for several years. The consensus for banks with broad geographic footprints has generally been to reduce infrastructure and transition toward self-service in existing branches. This can be a strategic and highly beneficial move, but only when it incorporates two significant elements: an appropriate IT infrastructure and improved customer service.
Building a new generation of branches is going to require more than simply adding self-service kiosks and tablets to your existing infrastructures. That has already been done with ATMs, mobile and remote deposit capture, each in independent and core agnostic environments that are a bear to maintain and come with a high price tag. If we continue to address the surface level interactions without aligning the underlying IT infrastructure, the result will be far from the branch of the future – it will be more like the branch of yesterday with a few new devices added. New devices will continue to be introduced and updates will constantly be needed, each requiring new codes, rules and roll-outs. There is a better way.
Rewrite from the Middle
Instead of focusing on front counter devices and interactions, banks can rewrite their processes from the middle. By updating their middle environment (right before the back office), they can centralize their deposit acquisition technology and manage transactions from various channels in one cohesive setting, with commercial and retail activity combined. Fed by multiple endpoints – teller, ATM, kiosk, tablet and mobile – this proposed view would create a common area for deposits to be processed with their images prior to processing in the back office.
Today, each channel creates its own silo with its own set of rules as well as costly infrastructure and associated maintenance. This proposed view makes it more device-agnostic and allows freedom of choice as well as a more agile adoption of new deposit acquisition channels as they evolve while at the same time keeping the total cost of transactions down.
This eliminates siloes and retrofit applications that are messy for the bank, nearly impossible for data analysis and even more difficult for customers. A unified platform that seamlessly implements image capture capabilities across the branch environment (branch teller stations, universal associate applications, tablets, self-service kiosks, and regional processing centers) is a strong start. But, when banks blend points of capture with consolidated business rules, they can maximize enterprise efficiency and expedite any self-service deployment scenario.
This solves another problem for large banks that are challenged by the fast roll-out that community banks can offer. When a new device enters the market, community banks can ask their core to turn the associated capabilities “on” and have them ready to offer in practically no time. With a unified platform, larger banks can do the same; they can move tablets into the branches as fast as they can build the interface. Not everything needs to be a multi-year effort.
Reimagining an IT strategy also impacts customers. People are historically resistant to change and customers want to see change in their bank associated with more convenient or practical use cases. One simple way to meet IT and customer needs is to manage customer sessions based on each user, rather than the platform in use. A customer may start a transaction at a kiosk and then need assistance from personnel. Someone else may start a transaction on a mobile device, get interrupted, and opt to finish that transaction at home on a PC or even back at the branch. Managing customer sessions based on the user, rather than the workstation, enables customers to pause and/or continue at any point of contact. There is, finally, the opportunity to present a unified banking front that better suits busy lifestyles.
The omnichannel challenge is less about hardware and more about software. Such an implementation starts with centralizing the services and business rules associated with deposit and image capture. For example, a bank implementing self-service kiosks typically creates a new channel for these devices to acquire deposits and images and have them meet somewhere later in processing. This channel usually sits independent of the branch network devices (teller stations), needs time to be implemented and costs to maintain over time. Neither does it guarantee the customer a similar user experience and functionality to perhaps the ATM, concierge tablet or other device used in branch activity. It also creates a walled-off silo that cannot leverage enterprise level risk and fraud monitoring capabilities.
A more flexible middle tier would enable banks to set up these devices and manage their interaction for image and deposits in a central area, requiring the institution to only adjust business rules based on risk in the channel or device rather than maintain each as a separate entity. The cost to maintain is lower, thus allowing the cost of each transaction to be lower. The bank can also react to market or competitive change much faster.
Banks have been adding products and devices to existing infrastructures for years. Today, the presence of self service and mobile adoption allows bankers to modernize the customer experience while increasing efficiency and saving on costs. This can be the beginning of a new generation of branching and the realization of true omnichannel banking. There are many opinions about what the future of the branch and self-service banking will require; make sure that you plan an IT infrastructure that can power your vision of the branch and be adaptable enough to make easy adjustments for years to come.
Mr. Schwabline is senior manager, Product Strategy & Marketing, with Allen, Tex.-based ProfitStars, a division of Jack Henry & Associates Inc. He can be reached at [email protected].
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