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HUMAN CAPITAL CONSIDERATIONS FOR THE NEW BRANCH CELENT BRANCH TRANSFORMATION PANEL SERIES PART 5
Bob Meara, Jean-Marie Ubigau November 10, 2016
This authorized reprint contains material excerpted from a recent Celent report and was not sponsored by Kronos in any way.
For more information on the full report, please contact Celent (www.celent.com or [email protected]).
CONTENTS
Executive Summary ............................................................................................................ 1 Key Research Questions ................................................................................................. 1
Staffing the New Branch ..................................................................................................... 3 Human Capital Considerations ........................................................................................... 5
Recruiting......................................................................................................................... 5 Training ............................................................................................................................ 7 Metrics and Compensation .............................................................................................. 7 Maximizing Effectiveness with Technology ..................................................................... 7
Banks’ Self-Assessment ..................................................................................................... 9 Organizational Design and Human Capital ..................................................................... 9 Maturity .......................................................................................................................... 11
Timing, Scope, and Challenges ........................................................................................ 12 Recommendations ............................................................................................................ 17 Appendix I: Panel Demographics ...................................................................................... 18 Appendix II: Survey Instrument ......................................................................................... 19 Leveraging Celent’s Expertise .......................................................................................... 24
Support for Financial Institutions ................................................................................... 24 Support for Vendors ...................................................................................................... 24
Related Celent Research .................................................................................................. 25
EXECUTIVE SUMMARY
This is the fifth in a series of reports based on Celent’s Branch Transformation Research Panel. The purpose of the effort is to look deeply into the objectives, priorities, risks, barriers, and likely outcomes of branch channel transformation efforts in North America. Celent recruited panelists from clients and nonclients alike. We seek to expand panel membership and expect to produce ongoing research through 2017 at semi-monthly intervals. To request a place on the research panel, apply online.
This report examines human capital considerations in branch channel evolution.
KEY RESEARCH QUESTIONS
1 How do banks plan to staff new branch designs? 2
What are the human capital considerations associated with transforming the branch network?
3 What are the most difficult aspects of staffing the new branch?
Findings • Surveyed institutions consider human capital a matter of utmost importance: 97% of
respondents regard having a comprehensive staffing strategy as part of their institution’s branch channel transformation program as “somewhat important” (24%) or “very important” (74%). Moreover, a significant majority (more than 90%) of the institutions surveyed are changing their approach to human capital.
• Universal bankers are already commonplace and are here to stay. Results are not uniformly positive, however. Differences in the degree of success may largely be a matter of execution.
• Recruiting well-qualified staff is the #1 human capital challenge cited by banks and credit unions of all sizes.
• For non-teller roles, most institutions primarily recruit from outside their organization and seek talent with previous financial services experience.
• When recruiting, institutions see customer service experience as more important than sales experience by a significant margin.
• Larger institutions tend to conduct new-hire training that is of longer duration, contains a broader syllabus, and is delivered using a wider variety of mechanisms, particularly ad hoc and web-based training.
• By a significant margin, the most common metric that influences staff compensation involves the number of referrals made to other business lines (74%), followed by customer satisfaction (58%).
• The stereotype that large banks only care about revenue is not supported by the data. Nearly twice as many larger institutions (those with assets >US$10 billion) are measuring customer satisfaction as smaller institutions (82% vs. 48%).
• The stereotype that credit unions care about member satisfaction more than banks is also not supported by the data. Banks and credit unions measure customer satisfaction in statistically equivalent proportions (57% vs. 60%). The survey,
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however, did not measure the weight given to the various metrics, nor did it assess how much employee compensation is variable and tied directly to these metrics.
• Staff compensation has remained relatively static over the past two years among 40% of surveyed institutions. The other 60% have increased average compensation or the variable component, or both.
• Most surveyed institutions are not intent on making technology investments to increase staff efficiency or effectiveness.
• Larger banks and credit unions are comparatively farther along in their human capital journey and offer a more positive self-assessment than do community banks.
Recommendations • Lead with Human Capital Investments. Without exception, interviews among
institutions well along in their branch channel transformation initiatives suggest human capital investments are best made prior to technology or physical changes.
• Extensively Train on Digital Capabilities. While all institutions surveyed conduct some form of general product training, fewer equip branch staff with a solid command of mobile and online channel capabilities.
• Invest Generously in Training. Beyond advocacy for developing digitally savvy branch staff, successful institutions will likely attest to the benefits of comprehensive initial and ongoing training.
This report begins by examining the roles utilized in new or redesigned branches. It then dissects the human capital considerations of recruiting, training, metrics, and compensation, followed by banks’ self-assessment of both organizational design and human capital strategy. The final section looks at how institutions are implementing changes in human capital in the context of their broader branch channel transformation efforts and the challenges associated with doing so.
Note: The panel is not strictly representative of the North American financial services market for two reasons. Like most surveys, a managed panel necessarily involves some selection bias. That is, individuals more concerned about the topic are likely to participate. While this is a known error mechanism, the extent of its impact is difficult to determine. Second, the panel composition does not mirror the overall market. Large banks are over-represented. Celent intends to improve this aspect of the panel over time.
The survey sample is also relatively small (38); thus the results presented here should not be considered to be a precise read of the industry. Rather, we expect the insights contained herein will be a good yardstick for the attitudes and activities of North American financial institutions.
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STAFFING THE NEW BRANCH
Financial institutions have been reducing branch staffing levels for years. But, one can only reduce teller headcount so much without spoiling the customer experience during peak traffic times. As teller transaction levels wane, institutions have responded with “universal banker” roles — staff equally equipped to perform teller or platform sales/service functions. After much hand wringing over the viability of these generalist roles, universal bankers appear to be widespread in new branch designs.
Nearly nine out of ten institutions utilize universal bankers in new or redesigned branches, while less than two-thirds also have traditional teller roles. Many who employ both roles do so in larger branches only, while others staff a single commercial teller when needed. Use of specialist roles such as small business bankers or financial specialists is less common because not all institutions compete in these lines of business. Larger banks are more likely to have these roles staffed, for example. Concierge roles are rare, as are digital advocates. Instead, banks ask generalists to greet customers and evangelize the benefits of enrolling in digital channels (Figure 1).
Figure 1: Universal Bankers Are the Most Common Role in New Branch Designs
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Which of the following roles are utilized in one or more new or redesigned branches at your institution?
While overall staffing patterns are similar between banks and credit unions, concierges are more common among credit unions (30%). With the small size of many new branches, institutions are opting for digital advocates as a collateral duty for willing and
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Roles utilized - new/redesigned branches
Key Research Question
1
How do banks plan to staff new branch designs?
Universal bankers are becoming a fixture in new branch designs, along with traditional sales and
service roles. Concierge and digital advocate, not so much.
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motivated staff, rather than a dedicated role. Two banks interviewed for this report compensate these staff more highly and tie a variable component of compensation to digital channel utilization (Figure 2).
Figure 2: Some Role Utilization Simply Reflects Products and Services Offered
Source: Celent Branch Transformation Research Panel, October 2016, n=38
Make no mistake, universal bankers cost more to recruit, train, and compensate than tellers. As a result, many executives were initially skeptical about the business case. No one wants to pay universal bankers to perform teller’s tasks – unless they do so infrequently. Said another way, the success or failure of universal bankers may largely be a matter of execution. This sentiment registered solidly in the survey. The significant majority of surveyed institutions felt universal bankers: are a given; may not apply everywhere; and are more effective as transactions decline. Figure 3 graphs the extent to which surveyed bankers agreed with several statements regarding universal bankers.
Figure 3: Most Sentiment Regarding Universal Bankers Is Solidly Positive
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Indicate your agreement with the following statements. Universal Bankers are:
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A given - here to stay
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Universal banker sentiment
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HUMAN CAPITAL CONSIDERATIONS
This section examines common human capital considerations: recruiting, training, compensation, and the use of technology to maximize staff effectiveness.
RECRUITING As the saying goes, good people are hard to find. That must be the case when it comes to finding good talent to staff new branch designs, because institutions are looking in many places. The most commonly cited “primary source” of new, non-teller roles is outside the bank among individuals with financial services experience (84%) followed by the institution’s existing tellers (71%). About a third of surveyed institutions recruit from outside the industry (37%). The notion that banks are hiring retail sales talent from outside the industry in droves is not supported by the survey.
The picture is similar between larger and smaller institutions, except that over half of larger banks (55%) recruit from other roles inside the bank (compared to 19% among smaller banks) and are more likely to recruit within the call center (Figure 4).
Figure 4: Institutions Are Recruiting Talent from Both Inside and Outside the Bank
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: What is your primary source of new, non-teller roles? Select all that apply.
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Key Research Question
2
What are some human capital considerations associated with transforming the branch network?
Recruiting, training, metrics, compensation, and the use of technology to improve staff effectiveness.
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Banks and credit unions generally fish for new talent from the same well, with one exception: the contact center. Half of surveyed credit unions indicate the contact center is a source of potential new non-teller branch roles, compared to just 7% of banks (Figure 5). One bank commented that few of its contact center employees would be attracted to a customer-facing role. “Contact centers draw a different personality.”
Figure 5: Except for the Contact Center, Banks and Credit Unions Source Talent Similarly
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: What is your primary source of new, non-teller roles? Select all that apply.
Beyond where institutions are looking for new branch talent, what skills and experience are in demand? Celent interviewed several banks prior to fielding the survey to understand the basket of skills being sought. We found a number of skills deemed important to varying degrees. The ability to transact efficiently and balance a till was not among them. Instead, we found banks looking for front line staff that are effective listeners, energetic problem solvers, and outgoing conversationalists. Both creativity and technical/digital competence are viewed as important, but less so compared to the other attributes. Leadership ability is the least important of the surveyed skills (Figure 6).
Figure 6: Institutions Are Primarily Looking for Outgoing Effective Listeners in Non-teller Roles
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: How important are the following skills in candidates for non-teller roles?
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Among the experiences institutions look for in a prospective front line staff’s resume, retail nonfinancial experience was the least important. Instead, institutions are primarily looking for customer service experience (92% “very” or “extremely” important) and sales experience (65%). The results clearly support the notion that staff can be trained in financial services more effectively than they can acquire new skills. Figure 7 shows an experience hierarchy in order of importance.
Figure 7: Customer Service Is the Most Sought After Experience
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: How important is the following experience in candidates for non-teller roles?
TRAINING This section available in the full report.
METRICS AND COMPENSATION This section available in the full report.
MAXIMIZING EFFECTIVENESS WITH TECHNOLOGY There is no debate around the imperative to increase the efficiency and effectiveness of the branch network. Thus far, we have offered evidence of institutions seeking to accomplish this objective through recruiting, training and appropriately compensating skilled frontline staff. But, are institutions also investing in technology designed to improve their efficiency and effectiveness? The short answer is “yes” — but, those institutions are in the minority, and they are investing selectively. Why? The short answer appears to be related to channel priorities. While over 90% of institutions surveyed in May 2015 conceded branch transformation was “imperative”, digital channel development is the priority, and the branch channel continues to be a distant second at most institutions. Moreover, many institutions are reluctant to implement enterprisewide branch technology solutions until their future branch vision achieves clarity. Both these issues are explored in the Celent report These Early Days of Branch Channel Transformation, June 2015.
Among the technology areas surveyed, branch customer experience surveys already see widespread usage (81%). This exceeds the number of institutions tracking customer satisfaction as part of individual employee performance metrics (58%). This suggests
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some institutions track satisfaction (typically random, infrequent surveys), but do not have a mechanism to associate customer responses with specific employees. An additional 8% of institutions cite plans to implement customer experience surveys.
The technology showing the largest growth in planned adoption is digital appointment booking, used by 24% of the panel. Another 26% plan to implement it. Arguably, digital appointment booking is an example of an omnichannel investment, applying equally to digital, call center, and branch channels. Other surveyed technologies, while under consideration by up to a third of surveyed institutions, are not budgeted for implementation by more than one in ten institutions (Figure 8).
Figure 8: Institutions Appear to Have a Limited Appetite for Branch Technology Investment
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Which of the following technologies are you using to maximize branch employee effectiveness?
Several technologies not included in the survey, namely self-service and video teller, are of growing interest — and the topic of two recent Celent reports. For the most part, however, these technologies are being implemented in limited ways, as pilot efforts. Celent will explore retail channel technology investment extensively in an upcoming report.
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BANKS’ SELF-ASSESSMENT
This section explores how institutions think they are doing and where they are in the process of implementing a human capital strategy.
Surveyed institutions consider human capital a matter of utmost importance: 97% of respondents regard having a comprehensive staffing strategy as part of their institution’s branch channel transformation program as “somewhat important” (24%) or “very important” (74%). Moreover, a significant majority of the institutions surveyed (~90%) are making significant changes to their approach to human capital.
ORGANIZATIONAL DESIGN AND HUMAN CAPITAL Surveyed institutions provide two related current state self- assessments: organizational design and human capital. The first assessment has to do with tactical implementation, and the other has to do with hiring, training, and deploying the right talent.
• Branch organizational design: role utilization, staffing levels, and capacity planning. • Human capital: recruiting success, employee skill level, and measured effectiveness.
Most institutions give their current state organizational design a grade of C (53%), with about a fifth indicating they are doing better or more poorly in equal numbers (Figure 20). The 3% with “excellent” self-assessments are credit unions. A significant factor that tempered banks’ self-assessment relates to the geographic diversity of the network. In several cases, banks felt great about some of their consumer-heavy branch designs, for example, but not as good about other small business-heavy branches. In some cases, institutions “design for the middle” and then adjust branch by branch.
Figure 9: Most Institutions Give Themselves a C for Organizational Design
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: How would you assess your institution's current branch organization design?
Smaller institutions offer a comparatively unattractive self-assessment. Fewer rate themselves “very good” (15% vs. 36%), and more rate themselves “poor” (30% vs. 9%).
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See Figure 21. Conversely, credit unions offer the most positive self-assessment, but not dramatically so. However, credit unions are the only segment with any “excellent” ratings.
Figure 10: Credit Unions Rate Organizational Design Slightly Better than Banks Do
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: How would you assess your institution's current branch organization design?
Institutions feel similarly about their current talent, except they more consistently give themselves a grade of C. Seventy-one percent say their human capital rates “good,” with larger institutions offering a modestly better assessment (Figure 22). Banks and credit unions scored their human capital almost identically.
Figure 11: Larger Institutions Feel Modestly Better About Their Human Capital
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: How would you assess your institution's current branch channel human capital?
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MATURITY Maturity has to do with how far along institutions perceive they are in their human capital journeys. A bank could be relatively far along in its journey and still see opportunity for improvement. Not surprisingly, larger institutions consider themselves much farther along than smaller institutions, with 55% refining and evolving designs prior to rollout and a full third executing (Figure 23). Remarkably few institutions (3%) indicated they are not making significant changes to their approach to human capital.
Figure 12: Larger Institutions Consider Themselves Farther Along the Human Capital Journey
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Which best describes the status of your institution's human capital strategy and plan?
Credit unions, which are predominantly smaller institutions, regard themselves as farther along than the banks in our survey sample, but not dramatically so (Figure 24).
Figure 13: Credit Unions Are More Bullish About Their Human Capital Plans
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Which best describes the status of your institution's human capital strategy and plan?
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TIMING, SCOPE, AND CHALLENGES
So far, we’ve seen significant diversity in how financial institutions are tackling the challenges of creating terrific, yet cost-effective customer engagement in their branch networks. This section examines three other equally diverse components:
• Timing: when changes to the human capital strategy are being executed relative to other aspects of branch channel transformation; before, concurrent with, or following.
• Scope: how human capital changes are being geographically coordinated alongside the physical and technology evolution.
• Challenges: examining which aspects of the journey are the most challenging.
Timing Most institutions have not implemented human capital changes concurrent with other aspects of branch transformation initiatives. Across the sample, a full third of institutions chose to work on new branch design and technology first and address human capital considerations later. Some institutions chose to put the right people with the right skills in place before exploring new branch designs. These institutions are in the small minority (13%). Larger institutions have a more proactive human capital position, with 36% leading with human capital — compared to just 4% of smaller institutions (Figure 9).
Figure 14: Larger Institutions Have a More Proactive Human Capital Plan
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Relative to your institution's branch transformation efforts, your human capital strategy timing is: Note: 8% indicated, “Not applicable: not making significant changes to our approach to human capital”
Credit unions are behaving much like smaller banks with regard to human capital timing. Only 10% of surveyed credit unions are leading with human capital. Several Celent has interviewed wished they had. Most credit unions seem to be lagging or in step with branch physical changes in about equal proportion.
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Scope Institutions are pursuing human capital plans with great diversity in scope. Here are three basic ways to think about scope.
• Narrow (24%). –Some institutions refine their human capital strategy and plans before expanding into new branch designs. They want to have human capital plan nailed prior to implementing across any meaningful part of their geographic footprint, whether new or legacy branches.
• Proportional (39%). These institutions leave legacy branches alone, while they refine their human capital plan in step with the build out of new branch designs or the remodeling of existing branches.
• Larger (24%). These institutions implement their human capital plan enterprisewide, regardless of the physical state of individual branches. They value having a uniform approach across their footprint.
Based on our sample, institutions both large and small tend to look at implementing human capital strategy similarly (Figure 10), with rich diversity in scope.
Figure 15: Size of Institution Does Not Appear to Determine Human Capital Scope
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Relative to your institution's branch transformation efforts, human capital strategy scope is: Note: 13% indicated, “Not applicable: not making significant changes to our approach to human capital”
Credit unions tend to embrace larger scope changes to human capital compared to banks in the sample (30% larger, 50% proportional, and 10% narrow). There are arguments for and against each of these approaches. The most common argument for a leading (or proactive) approach to human capital is that staff are initially more effective once the new branch(es) go live. The downside argument is that the ROI of higher-cost universal bankers can be more protracted when the technology is not in place to migrate transactions off the teller line.
Challenges Most aspects of branch channel transformation are easier said than done. That may be one reason why industrywide change is occurring more slowly than some wish. In an attempt to understand which human capital considerations represent the greatest challenges to institutions, we asked the panel to rate six considerations, derived from pre-survey interviews, on a 10-point scale (1=no challenge, 10=very challenging). They are:
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Narrow - we are refining our staffing plans beforeexpanding within new branch designs
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• Recruiting well-qualified staff. • Determining best compensation level. • Reducing regrettable turnover. • Retaining well-qualified staff. • Creating career paths for outstanding branch talent. • Change management, including communicating plans about the future of the branch.
The first thing to note from the results of this exercise is that institutions consider all surveyed human capital considerations to be relatively challenging (each had a mean rating of 6 or greater). The second thing to notice is the significant diversity of opinion. That is, although the ratings were generally high, they were widely varying (Figure 11).
Figure 16: Human Capital Is a Difficult Endeavor, But with Widely Varying Difficulty
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Relative to your institution's branch transformation efforts, human capital strategy scope is:
Some of the variability in the ratings may be an artifact of the question itself, producing an inherent difficulty in associating a numerical value with each consideration. But beneath the variability is a clear consensus. That is, recruiting well-qualified staff is the #1 human capital challenge cited by banks and credit unions of all sizes.
This was clear no matter how we analyzed the data. For simplicity, Figure 12 on the next page graphs the percentage of respondents that rated each human capital consideration
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Key Research Question
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What are the most difficult aspects of staffing the new branch?
Recruiting well-qualified staff is the #1 human capital challenge cited by banks and credit unions of
all sizes.
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a 7 or higher — at least “relatively challenging,” you might say. Using this metric, 76% of the panel considered recruiting well-qualified staff relatively challenging, followed by change management (61%). Institutions see other staffing matters (career pathing, retention and compensation) as less challenging.
Figure 17: Banks’ Top Human Capital Challenge Is Recruiting Well-Qualified Staff
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Indicate to what extent each of these considerations represents a challenge for your institution.
Other aspects of the variability seen in Figure 27 and Figure 28 may be related to the organization, its size, complexity, and stature in the community. For example, larger institutions appear to have a comparatively easy time with recruiting and creating career paths, but have a comparatively tough time with compensation and retention (Figure 13).
Figure 18: Organization Size and Complexity Factors into Human Capital Considerations
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Indicate to what extent each of these considerations represents a challenge for your institution.
Similarly, credit unions appear to have a comparatively harder time all around. Across all considerations, credit unions rated them more challenging than banks did — except determining the best compensation level (Figure 14).
39%
45%
53%
61%
61%
76%
0% 20% 40% 60% 80%
Determining best compensation level
Reducing regrettable turnover
Retaining well-qualified staff
Creating career paths for outstanding branch talent
Change management, including communicatingplans about the future of the branch
Recruiting well-qualified staff
% rating 7 or higher (1 to 10 scale)
Top human capital challenges
55%
64%
46%
82%
64%
55%
33%
37%
67%
41%
59%
85%
0% 20% 40% 60% 80% 100%
Determining best compensation level
Reducing regrettable turnover
Creating career paths for outstanding branchtalent
Retaining well-qualified staff
Change management, including communicatingplans about the future of the branch
Recruiting well-qualified staff
% rating 7 or higher (1 to 10 scale)
Top human capital challenges by asset tier
< $10 B
> $10 B
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Figure 19: Credit Unions Appear to Have a Comparatively Harder Time All Around
Source: Celent Branch Transformation Research Panel, October 2016, n=38 Q: Indicate to what extent each of these considerations represents a challenge for your institution.
The apparent mismatch between compensation and retention/turnover suggests that institutions don’t see a direct relationship between retaining good employees and compensating them well. An alternative explanation may be that many of the challenges are interrelated. Specifically, if an institution is successful in the first three tasks in Figure 14, they will likely be successful in the remaining three.
30%
50%
70%
70%
80%
100%
43%
43%
46%
57%
54%
68%
0% 20% 40% 60% 80% 100% 120%
Determining best compensation level
Reducing regrettable turnover
Retaining well-qualified staff
Creating career paths for outstanding branchtalent
Change management, including communicatingplans about the future of the branch
Recruiting well-qualified staff
% rating 7 or higher (1 to 10 scale)
Top human capital challenges by FI type
Bank
Credit Union
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RECOMMENDATIONS
Celent offers three recommendations for banks seeking to improve the efficiency and effectiveness of their branch networks. Specifically:
• Lead with human capital investments. • Extensively train on digital capabilities. • Compensate generously, with strategically chosen variable components.
Lead with Human Capital Investments Without exception, interviews among institutions well along in their branch channel transformation initiatives suggest human capital investments are best made prior to technology, or physical changes. Many institutions are glad they led with human capital, while others wished they had. This approach may appear to erode short-term ROI because the higher cost of universal bankers will likely not be coincident with labor-reducing technology. Many institutions that chose this approach, however, will likely attest to the superior sales and service results this approach produces — in both new and legacy branch designs.
Extensively Train on Digital Capabilities While all institutions surveyed conduct some form of general product training, fewer equip branch staff with a solid command of mobile and online channel capabilities. Many institutions find that highly trained, digitally savvy staff produce superior customer service levels (the proportion of digital questions and concerns is growing) and lead to greater digital channel utilization.
Invest Generously in Training Beyond advocacy for developing digitally savvy branch staff, successful institutions will likely attest to the benefits of comprehensive initial and ongoing training. Albeit with a small base, Celent notes an association between highly successful branch transformation efforts and a willingness to invest generously in training. Moving beyond separate teller and platform roles to universal bankers is a big change. For these new associates to manifest much-desired behavior, they must be thoroughly trained and completely comfortable with products, policies, procedures, and your institutions’ approach to needs-based selling.
In the final analysis, human capital considerations may be both the most challenging and important aspect of branch channel transformation. No matter how slick the branch technology environment, it is for staff interaction that most customers continue to choose to use the branch. Making these interactions valuable to both customers and the institution will be of the utmost importance for the foreseeable future.
Was this report useful to you? Please send any comments, questions, or suggestions for upcoming research topics to [email protected].
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APPENDIX I: PANEL DEMOGRAPHICS
The results presented in this report were based on responses from 38 financial institutions in October 2016. Panelists represented financial institutions from across the asset tiers; 74% represented banks, while 26% represented credit unions. Because this is a quasi-static panel, demographics are substantially identical to previous surveys (Figure 15).
Figure 20: Large Banks Are Overrepresented in the Panel
Source: Celent Branch Transformation Panel Survey, October 2016, n=38
A number of roles were also represented. Figure 16.
Figure 21: Executives in Strategy/Innovation Roles Dominate the Panel
Source: Celent Branch Transformation Panel Survey, October 2016, n=38
< $1 billion 23%
$1-$10 billion 46%
$10-$50 billion 15%
$50-$100 billion 3%
> $100 billion 13%
Composition by Asset Tier
C-Level Executive
20%
LoB Executive 21%
Operations 33%
Product Managememt
5%
Strategy/ Innovation
21%
Composition by Role
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APPENDIX II: SURVEY INSTRUMENT
In the interest of transparency Celent provides the full survey instrument in this appendix.
Introduction Previous Branch Transformation Research Panel surveys primarily focused on technology issues. This fifth survey turns its attention to human capital considerations. In the inaugural survey, 75% you judged branch workforce issues “Important” or “very important” to research in future surveys. Here we go!
Figure 22: You Said Branch Workforce Issues Were Important to Include in Future Surveys
Source: Celent Branch Transformation Research Panel, June 2015, n= 39
This survey will consist of two parts.
1. Page 1 compares human capital considerations 2. Page 2 is your current assessment
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Page 1: Human Capital Considerations This section compares human capital considerations: recruiting, training, measurement and compensation. 1. Which of the following roles are utilized in one or more new or re-designed branches
at your institution? (check all that apply) • Teller • Platform sales • Universal Banker • Branch Manager • Head Teller • Concierge • Digital Advocate or Digital Genius • Licensed financial specialist • Private Banker or Wealth Manager • Lending Officer or Mortagage Specialist • Small Business Banker • Other _____
2. What is your opinion regarding the use of Universal Banker roles? Indicate your
agreement with the following statements. [5-point agreement scale] Universal Bankers are: • A given - here to stay • Simply a matter of how to best execute • May not apply everywhere • More effective as transactions decline • Best used instead of Tellers and Platform Sales staff • Best used in addition to Tellers. • Other ________
Recruiting: 3. How important are the following skills in candidates for non-teller roles? [randomize
order, 1-5 importance rating] • Ability to identify customer needs • Technical / digital competence • Ability to think on their feet • Creative thinker • Social / conversational aptitude • Skill at problem solving • Leadership ability • Other _______
4. How important is the following experience in candidates for non-teller roles? [1-5
importance rating] • Retail, non-financial services experience • Retail financial services experience • Successful sales experience, regardless of industry • Customer service experience
5. What is your primary source of new, non-teller roles? Select all that apply.
• From among existing tellers • From among existing contact center agents • From other roles inside the bank
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• From outside the bank with financial services experience • From outside the bank and outside the industry
Training: The next few questions refer to training associated with branch staff in new or re-designed branches. 6. Which of the following content is included in your branch staff training curriculum?)
[randomize order] • Lobby management (greeting, interacting, placement, etc.) • Customer engagement (how to have better customer conversations) • Teller automation system & transaction fulfilment • Platform sales platform & process • General product training (product basics of all your products) • Specific in-depth training on selected products • Online channel capabilities • Mobile channel capabilities • Other _______
7. Which of the following components are included in your branch staff training
curriculum? • Classroom • In-branch • Contact center • Internet-based training via web cast • Self-paced training delivered via hard copy or internet • Role playing • Other _________
8. How long is your branch staff training curriculum? (1 week = 5 business days
duration) • 1 week or less • 1-2 weeks • 3 weeks • 4 weeks • More than 4 weeks
9. Which best matches your ongoing training requirements?
• One day annually • One day quarterly • 1 week annually • Formal training of another duration • Ad hoc training • Other _____
Metrics and Compensation: 10. Which of the following metrics influence compensation at your institution?
• Customer satisfaction • Products or services per household • Products or services per customer • Referrals to other business lines • Service event disposition
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• Hard, objective metrics not mentioned above • Manager review on totality of factors with some degree of subjectivity • Other ________
11. To what extent has staff compensation changed in the past two years in your
institution? • We’ve increased average compensation • We’ve increased the variable component • We’ve lowered average compensation • Compensation hasn’t changed materially in the past two years • Other ______
12. Which of the following technologies are you using to maximize branch employee
effectiveness? [using, planning, considering, no plans] Planning implies you have budget approval and will implement within the next year. • Workforce Management (WFM) to measure and forecast demand for sales or
customer service experience and staff accordingly • Branch audio recording – captures face-to-face conversations to analyze
interactions for quality, sales effectiveness and compliance. • Video business analytics – identifies in-store traffic patterns, peak store hours
and customer wait times • Lobby management system or kiosk for customer check-in • Digital appointment booking • Branch customer experience surveys • Other __________
Page 2: Branch Channel Human Capital Assessment This section explores how you think your institution is doing and where you are in the process. 13. How would you assess your institution’s current branch organization design in term of
roles and capacity planning? • Unsatisfactory - • Poor - • Good - • Very good - • Excellent -
14. How would you assess your institution’s current branch channel human capital (talent, skills, effectiveness, etc.?)
• Unsatisfactory - • Poor - • Good - • Very good - • Excellent -
15. How important is having a comprehensive staffing strategy as part of overall branch channel transformation or redesign? • Unimportant • Somewhat unimportant • Neutral • Somewhat important • Very Important
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16. Which best describes your institution’s human capital strategy and Plan? • Developing (researching, debating…) • Testing (one or more pilots are operational) • Refining (evolving design prior to rollout) • Executing (strategy and design are in-place) • Not applicable: not making significant changes to our approach to human capital
17. Relative to your institution’s branch transformation efforts, your human capital strategy timing is: • Lagging behind – we worked on design, technology, etc. first. • In step – human capital decisions are made coincident with other aspects of re-
design • Leading – we put the right people with the right skills in place before exploring
new branch designs • Not applicable
18. Relative to your institution’s branch transformation efforts, human capital strategy
scope is: • More narrow – we are refining our staffing plans before expanding within new
branch designs • In step – we implement new staffing plans with each new branch design • Larger – we implement new staffing plans enterprisewide even as we test new
branch designs • Not applicable
19. Indicate to what extent each of these considerations represents a challenge for your
institution. Degree of Difficulty Easy Moderate Difficult 1 2 3 4 5 6 7 8 9 10
• Reducing regrettable turnover • Recruiting well-qualified staff • Determining best compensation level • Retaining well-qualified staff • Creating career paths for outstanding branch talent • Change management, including communicating plans about the future of the
branch 20. Optionally, let us know if you think there is an area we missed or should investigate in
our next survey. [open text block]
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LEVERAGING CELENT’S EXPERTISE
If you found this report valuable, you might consider engaging with Celent for custom analysis and research. Our collective experience and the knowledge we gained while working on this report can help you streamline the creation, refinement, or execution of your strategies.
SUPPORT FOR FINANCIAL INSTITUTIONS Typical projects we support related to branch channel transformation include:
Vendor short listing and selection. We perform discovery specific to you and your business to better understand your unique needs. We then create and administer a custom RFI to selected vendors to assist you in making rapid and accurate vendor choices.
Business practice evaluations. We spend time evaluating your business processes. Based on our knowledge of the market, we identify potential process or technology constraints and provide clear insights that will help you implement industry best practices.
IT and business strategy creation. We collect perspectives from your executive team, your front line business and IT staff, and your customers. We then analyze your current position, institutional capabilities, and technology against your goals. If necessary, we help you reformulate your technology and business plans to address short-term and long-term needs.
SUPPORT FOR VENDORS We provide services that help you refine your product and service offerings. Examples include:
Product and service strategy evaluation. We help you assess your market position in terms of functionality, technology, and services. Our strategy workshops will help you target the right customers and map your offerings to their needs.
Market messaging and collateral review. Based on our extensive experience with your potential clients, we assess your marketing and sales materials — including your website and any collateral.
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RELATED CELENT RESEARCH
Getting to Digital: Assessing Banks’ Progress - Branch Transformation Panel Series Part 4 May 2016
The Branch Self-Service Conundrum: How US Banks are Navigating the Options - Branch Transformation Panel Series Part 3 December 2015
The Tablet Stampede: How Branches will Change in the Short-Term - Branch Transformation Panel Series Part 2 September 2015
Optimizing Face-To-Face Interactions: The Missing Link in Branch Channel Transformation July 2015
These Early Days of Branch Channel Transformation: Branch Transformation Panel Series Part 1 June 2015
Retail Channel Systems in North America: The Quest for Omnichannel Continues January 2015
Slow Going: How US Financial Institutions are Tackling Branch Transformation November 2014
Video Banking: Lights, Camera, Transaction? August 2013
Branch Boom Gone Bust: Predicting a Steep Decline in US Branch Density April 2013
Is That Any Way to Run a Branch? Workforce Optimization Solutions for Retail Banking 2012 Update October 2012
Branch Transformation at RHB Bank: Making It Look Easy June 2012
Branch Banking in a Multichannel World, Part III: Case Studies in Branch Transformation March 2011
Branch Banking in a Multichannel World, Part II: The Many Faces of Change February 2011
Branch Banking in a Multichannel World: What Ever Happened to the Branch of the Future? August 2010
Cash Automation in Branch Banking: Cut Costs While Improving Sales and Service May 2010
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Celent, a division of Oliver Wyman, Inc.
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This report is not a substitute for tailored professional advice on how a specific financial institution should execute its strategy. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisers. Celent has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been verified, and no warranty is given as to the accuracy of such information. Public information and industry and statistical data, are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information and have accepted the information without further verification.
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