Leveraging Technology and Talent to Transform … Technology and Talent to Transform your Branches RICHARD A. LEONE JERALD MURPHY Chief Executive Officer Chief Executive Office

Leveraging Technology and Talent to Transform your BranchesRICHARD A. LEONE JERALD MURPHYChief Executive Officer Chief Executive Office

2017 New Jersey Bankers Annual MeetingMay 17 – 20, 2017

COCC BITS

CORPORATEOVERVIEW Formed by and owned by our clients since 1967

6th largest provider of core processing services in U.S.

Next generation, open, relational database core system

Over $100 billion of assets serviced

Over 4.5 million consumer and business accounts online

Over 1.0 million Internet and mobile banking accounts serviced

OUR COMPANY

• Started in 2005 by Atlantic Community Bankers Bank to provide managed telecommunications services exclusively for community banks. – Owned by community banks– Board of Directors consist of community bank CEOs

• Established reputation– 100 + community bank clients– 800+ branch locations in 18 states– 95% contract renewal ratio

• Complete platform of next generation telecommunication services, specifically developed to simplify banks’ technical, operational, and regulatory requirements.

• SOC 2 Compliant

DISCUSSIONTOPICS How do your customers want to interact with you?

Technology and Business Changes Impacting Branches

If you are redesigning your branches, what are your goals?

Should every branch be the same?

Do you have the staffing talent to match your goals?

Are you letting technology drive your design?

How do you run your virtual branch?

What the heck defines a branch?

How should your marketing change?

BITS & COCC partner to help drive branch change

GOALS

Lower the branch cost structure Reduce the incremental cost of geographical

expansion Improve efficiencies Fund the expansion of digital banking

Reinvent the branch experience (modernize) Increase customer satisfaction Focus on enhancing relationships (over

transaction processing) Refresh the brand Attract and retain millennial customers

Grow (increase sales)

DIMENSIONS OFBRANCH TRANSFORMATION Talent and workforce management

Focus on advice and expertise (less transaction processing)

Branding Unique and customer‐driven

Design Balance space optimization with privacy and

convenience Technology

Purposed to improve experiences Virtual branch

Better integrated and mutually supportive digital channels (omni‐channel strategy)

UNIVERSALBANKER Multi‐faceted job responsibilities acting as both teller and platform service representative

Less cash handling and transaction processing and more product advice, referrals and problem resolution

In depth product knowledge and increased sales responsibilities

Produce more qualified referrals to other lines of business

Possess enhanced relationship building skills Create positions more appealing to those seeking career growth and opportunity

See ABA Universal Banker Certificate

BITS www.bitsnetwork.com

Industry changeWHAT ARE THE MAIN DRIVERS AND HOW DOES IT AFFECT YOUR CUSTOMER SERVICE STRATEGY?

• Technology innovation is constant• Transactional based banking keeps declining• Customer demand changes along with technology

• Desire for self‐service, time efficiency, immediate response• Increased demand for financial consulting and planning, plus cross/up selling turn key services (CPA etc.)

• Increased Regulatory Pressure• Risk and security

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• Clients are changing their banking behavior

• Transactional based banking is increasingly going online (Mobile & Online)

• Resulting in lower branch traffic

• = Less opportunity for retaining face to face customer relationship, loyalty, and face to face up‐selling

Banks should change their sales/marketing strategies to focus on meeting next‐gen customer behavior.

2017 Business Environment


Less face to face time with customers MAINTAINING RELATIONSHIPS WITHOUT KNOWING CUSTOMERS BY FACE

According to the FDIC, the number of bank branches peaked in 2009 at 99,550 and had dropped to 97,337 by 2012. SNL says that the U.S. banking sector finished 2016 with 92,997 branches.

“In 5 or 10 years, it seems pretty likely that branch networks will start to become significantly smaller, people who like to bank in person will need to either switch to a bank that has prioritized keeping physical branches in their area, or just bank online like everyone else.” Greg McBride, Chief Financial Analyst with Bankrate.


THE MODERN BRANCH New offices will likely have a smaller footprint

Reduce capital investment, occupancy costs and headcount

Crowded during peak hours Diminished privacy

Updated design of existing offices should be one optimized to achieve clearly defined goals

Open floor design

Concierge style, better facilitating personal interaction

Pods for Universal Bankers

Reflect your brand, mission and values

Private offices and conference rooms as needed

BRANCHDESIGN

Make the customer experience more comfortable

Lounge‐type environment

Charging stations and Wi‐Fi

Purpose‐driven innovation

LCD screens with more image‐driven messages that can easily be changed

BRANCHDESIGN

Source: Peak Performance Consulting Group’s March 2015 Digital Banking Report

BRANCH DESIGN

Archetype Typical Size Technology Staffing Utilization

Self Service 500 to 1,000sq. ft.

‐ Full self service‐ Advanced function ATM

‐ Video teller

‐ Not staffed‐May have video teller

for live support‐ Urban core

Express 1,000 to 2,000sq. feet ‐ Full self service or assisted self service ‐ Concierge (1 to 2 FTEs)

‐ No dedicated tellers

‐ Urban core‐ Rural replacement to substitute

for closing branch

Neighborhood 2,000 to 3,000sq. ft.

‐ Assisted self service or cash recycler pods‐ Video conferencing access to business

line partners (mortgage, business banking, investments, etc.)

‐ 3 to 4 Universal bankers‐ No dedicated tellers

‐ Urban core‐ Suburban strip mall

‐ Rural replacement to substitute for closing branch

Traditional 4,000 or moresq. ft.

‐ Cash recyclers to supplement traditional teller lines

‐ Assisted self service in high volume locations

‐ 6 to 8 FTEs‐ Universal bankers as a component of branch

staffing

‐ Hub branch‐ Center of expertise staffed with

business partners


USAA case study

CONSUMER REPORT – 2016 SURVEY

HOW TO DEVELOP AND MAINTAIN EXCELLENT CUSTOMER SUPPORT WITHOUT FACE TO FACE INTERACTIONS


HOW TO DEVELOP AND MAINTAIN EXCELLENT CUSTOMER SUPPORT WITHOUT FACE TO FACE INTERACTIONS

CONSUMER REPORT – 2016 SURVEY

USAA case study


USAA case studyHOW TO DEVELOP AND MAINTAIN EXCELLENT CUSTOMER SUPPORT WITHOUT FACE TO FACE INTERACTIONS

• “Non Bank” Competition

• Low operating cost as they don’t

have branches

• Providing stellar customer service

through technology

• Ability through economies of scale


USAA case study

Forrester Research: The Customer Experience Index. Top‐ranked in Bank, Credit Card and Insurance Categories Among All Brands Surveyed (2013 to 2016)

Staffers get time to do their jobs, too. Employees aren't rushed through calls with customers or evaluated on how fast they handle the inquiries. "Member satisfaction trumps every single metric," says Forrester's Temkin. Other call centers "may relax things like average handle time, but they still measure it, and still you get in trouble if you're out of bounds.“

Reps are also armed with software that lets them view a history of the online screens a particular customer has viewed on USAA's Web site, letting them know what policies or business lines the customer was perusing—and may be ready to buy.

Pros: Self serve with personal support Modern look to replace

pamphlets Multi dimensional ‐ sound and

video

Cons: Information is not grab and go Requires new marketing skills

LARGE TOUCH SCREENSAND DIGITAL SIGNAGE

Pros: Self serve with personal support Modern look to replace

pamphlets Multi dimensional ‐ sound and

video

Cons: Information is not grab and go Requires new marketing skills

TABLETKIOSKS

POP‐UP/MOBILE BRANCHES Position the brand as forward‐thinking, adventurous, innovative and responsive

Flexible and low‐cost, allowing for the testing of new concepts and products

Gather feedback and watch consumer behavior, reactions and preferences

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Expert Customer Support Is Becoming Increasingly Important


Contact center & IntegrationWHAT ARE THE MAIN DRIVERS FOR CHANGE?

• Contact Center and CRM becomes significantly more important when serving customers over the phone

• Connect customers with Sales Staff faster (Agents/supervisors with skills‐based routing)

• Customer support software integration/automation• Business analytics and reporting capabilities• Staffing and training

• Don’t make “silo decisions”, the cost of technology integration and automation becomes cost prohibitive for smaller financial institutions who don’t have leverage.


Contact center & Integration









Hosted/Managed Hosted/Managed

VoIP/Contact Center CRM/Core

Debit card Swipe debit/ATM card and enter PIN

Biometrics Fingerprint reader Retina scanner Fujitsu PalmSecure

o Contactless (hygienic)o False rejection rate of only 0.01%

CUSTOMERIDENTIFICATION

Pros: Full transaction support outside

of bank In branch mobility Video conferencing E‐sign Training

TABLETS

NCR INTERACTIVETELLER MACHINE (ITM) Remote assisted service

Transactions processed by remote staff

Cash recycling

Not an ATM: ATMs remain for foreign customers and as the best option for quick cash withdrawals

United Bank (Georgia) credited for being the only bank to open during a few days of unusual ice storms


BITS & COCC Voip partnership






















Bits & cocc voip partnershipBENEFITS SUMMARY

• No need to reinvent the wheel (no need to buy phone system or licenses)

• BITS & COCC core integration with bank agent desktop and contact center

• COCC call center call overflow• Highly certified BITS voice engineers supporting voice and call center systems

• Extended geographic diversity for phone system• Remove bottlenecks – no more capped incoming/outgoing call volume• Simplify regulatory compliance• Avoid finger pointing

SMARTPHONEENABLED ATMS Set up the transaction on the smartphone

Go to any of the FI’s ATMs

Enter one‐time use PIN, QR code or use NFC to complete the transaction

Prevents skimming

Reduces wait time

Cards and PINs may become undesirable as compared to NFC and biometrics

SCHEDULING

Online appointment scheduling through any channel Website Online/mobile banking Email campaign Social media Systematically match customer needs to appropriate

service representatives

Maximize engagements from a pool of resources at varying locations and with varying specialties and skills

Branch SolutionsMatrix

AttractNew

Customers/customers

Retain Customers/customers

EnhanceImage/Branding

ReduceFootprint

Increase Efficiency

AddCustomer

Convenience

Reduce Expenses

ExpandHours

Centralize Expertise

Expand Geographical

Reach

Attract aNew

Segment/Demographic

Branch Design/Redesign Pop‐Up/Mobile Branches

Cash Recyclers Interactive Teller Machines

(Remote Assisted) Next Generation ATMs

Contactless ATMs Self‐Service Kiosks Tablet Banking

Video Conferencing Digital Signage

Informational Kiosks Account Holder Verification

System Workforce Optimization

Universal Bankers CRM Assisted Service

Professionals Paperless Banking

Instant Card Issuance iBeacons

Online/Mobile Banking

VIRTUAL BRANCH(MOBILE AND WEB) Lowest cost per transaction

Largest adoption

Always available

Easiest training

Broad functionality

Easy‐to‐leverage targeted marketing capabilities

Dynamic content, in‐session messaging, chat and video chat can reduce the loss of personal connection

Create a consistent look across channels while balancing the need to simplify the experience as screens get smaller

Chat and video chat

Social media integration

Marketing analytics

Site analytics Geolocation and device details Traffic sources Page statistics

VIRTUALBRANCH

Full debit card management

Location

Transaction type

Merchant type

Spending thresholds

Fraud alerts

Suspicious activity alerts

VIRTUALBRANCH

BUILD A COMPREHENSIVE BRANCHTRANSFORMATION PLAN

Branch Transformation

People

Process

Brand

DesignVirtual Branch

Technology

Budget


Summary

• Changing Client Demographics are increasing the need for new ways to enhance customer service

• New VOIP technology allows better integration of networking, data center, and call center technology

• Branches need to adapt new technology to increase customer intimacy and optimize efficiency and effectiveness

• BITS and COCC are working together to ensure banking apps and customer service can work together seamlessly

QUESTIONS

Documents

Leveraging Technology and Talent to Transform … Technology and Talent to Transform your Branches RICHARD A. LEONE JERALD MURPHY Chief Executive Officer Chief Executive Office