5 of the biggest obstacles to a branch transformation
While the motivations behind a branch transformation are often clear - the rise of digital banking, new consumer demands, cost savings, etc. - the hurdles that can stand in the way of your branch may not be so obvious.
As you look to grow and evolve your bank branches, keep in mind these five obstacles that you could have to overcome:
1. Financial regulations
Regulations have an immense impact on the financial services industry. Naturally, they remain a key consideration during any branch redesign. Since the financial crisis, increased regulation has become the name of the game. Many banks are confined by more stringent stress tests and stricter guidelines when it comes to liquidity and capital. Any changes to your bank will have to be made through the lens of regulation. For example, a redesigned branch can bring about asset growth, which will in turn lead to increased regulatory scrutiny.
2. Consumer interaction
The big trend in banking today is digital technology. Smarter ATMs, online banking, mobile devices - all of these tools streamline the user experience, and many save money for the banks themselves. However, one problem with digital banking - that also becomes an obstacle during a redesign - is a lack of consumer interaction. With less foot traffic, you have fewer opportunities to outline the upcoming changes and drum up exciting for the transformation. The challenge becomes finding a way to connect with consumers in ways that aren't face-to-face.
3. Staff awareness
The third obstacle is staff awareness - specifically, the understanding of your branch redesign and what the future holds for your bank. The goal should be to energize and reward your staff through this transformation. However, a lack of communication about the changes can do the exact opposite. You don't want any confusion, or worse, fear about losing jobs. In some cases, "branch redesign" means removing tellers in favor of universal bankers, and that create some tense situations in your branch. So, get out in front of the redesign and educate your employees on the upcoming transformation.
4. Cost control
During this time, you'll also run across problems with cost. A branch redesign will require a significant investment, but the expenses can be mitigated with the right strategies. For example, focus on lean operations. Identify business processes that are redundant or simply unnecessary, and then remove them. The right policies and procedures can save you time and money. On a similar note, incorporate new technology wherever possible to cut costs. Look for long-term savings - a branch transformation will typically cost more in the short-term, while saving you money in the long run.
The final, and one of the most important, obstacles to a branch redesign are the logistics. This refers to the basic "is it possible?" question surrounding your transformation. Say you want to remove the teller and build a number of universal banker kiosks instead. You have to figure out how that design fits into your existing space. You have to plan for the costs, the time, the renovation and much more. You also have to train your staff for the change in job description and create new workplace policies to handle the switch. It goes without saying, but a lot goes into a branch redesign.
As a result, the most important step you can take is to plan. Map out your desired transformation, and determine what is necessary to make it all happen. As you do, keep in mind these five obstacles, so you'll be prepared when it comes time to get started.