ALPHARETTA, Ga.—A new study points out five key roadblocks to branch performance and emphasizes that bricks and mortar operations must transform from places to make deposits into centers for sales.
FMSI’s new white paper, Top Five Practices Holding Your Branch Back, emphasizes the pressures being applied to branches from online and mobile banking, as well as from non-financial high-tech players like Apple, Google and a number of Silicon Valley fintech startups.
“Competing more in the virtual world will likely leave many FIs in a desperate situation against technology experts chasing a slice of the financial services revenue pie—forcing them to re-examine their branch strategy,” said FMSI in the report. “Maximizing the impact of their strongest competitive advantage—their branch—can be a game changer.”
A significant portion of consumers, including Millennials, are not completely satisfied interacting only with their mobile device or computer when seeking more complex financial advice—leading them to the branch to seek out financial council face-to-face, said FMSI.
“However, many institutions still have to gradually transform their branch network from a deposit-centric focus to a more sales-centric one to get the most out of these more complex interactions,” the study said.
The report also shows that other industries—such as hospitality and travel—are deploying futuristic technologies and processes to enhance their service experiences, raising the service bar among all industries as well as consumer expectations. That is shining “a spotlight on the service-shortcomings of aging practices in branch banking.”
The report warns that FIs stuck in the “old way of doing things” can slow or stop change, especially in institutions with a long-seeded history of success in a dated, but proven branch model.
The five practices that can commonly hold FI branch performance back:
1. Focusing too much on traditional account holders in the branch.
2. Only hiring individuals with banking branch experience.
3. Sticking with the traditional branch model.
4. Only adopting what other FIs are doing.
5. Letting risk and compliance too often be a major roadblock.
“Survival of the fittest does not mean the strongest will survive,” FMSI said. “Rather, it means that the ones who adapt the best to fit in their environment will survive. In an ever-changing financial services landscape, it will be those FIs that adapt to the consumer needs that will have the greatest success in the future.”