How to Automate Your Branch Without Alienating the Customer

How to Automate Your Branch (1)

As banks face rising costs and less engagement within their branch locations, many are choosing to automate and eliminate paid possessions in order to cut costs and remain profitable. Yet there’s one potential downside of branch automation, and that is the fact that it can alienate customers. For the branch that needs to automate, these strategies will help limit the risk that the automation will turn to alienation.

Combining Teller and Sales Services

Automation can remove the job of the teller in many aspects. Customers can use the ATM to retrieve cash and even deposit checks electronically. In order to save money and continue to automate the bank’s processes, while still providing the customer with an in­person experience when it is wanted, many banks have chosen to combine the teller and the sales professional into one.

By equipping the sales professional with teller abilities and responsibilities, and allowing this professional to roam the bank rather than staying locked in an office, banks can connect with customers and, potentially, make more sales. This phenomenon, which is sometimes called “pod banking,” keeps a friendly face on the bank branch as the sales professionals greet the customer face­to­-face. It also eliminates the need for teller stations at branches.

Of course, the sales professionals who are taking on these new roles need automation to perform them well. Cash recyclers can eliminate the need to count back cash, balance teller drawers and reconcile cash, which can eat up significant amounts of time. With the right tools, these bankers can spend less than 10 minutes to perform tasks that traditionally took tellers hours, all without sacrificing the quality of the customer experience.

Going Paperless Without Sacrificing Customer Security

Another way that automation can be embraced by branches is through paperless banking. However, in order to keep customers, the bank needs to offer some form of digital record that is convenient and accessible to the customer. Emailed copies of forms, digital signatures on signature pads or even the customer’s own smartphone and online account opening options keep customers secure while eliminating the cost and time required to manage paperwork.

Automate Without Sacrificing Relationship

One of the fastest ways to alienate a customer is to fail to build a relationship with that customer. Prevent this problem by retaining the in ­person communication at the branch whenever possible, even while automating to save time on the backend. When customers come to the branch, no matter how automated it is, they need to be greeted with a friendly face.

Embracing Innovation That Makes the Customer’s Life Easier

What banking products are no longer in vogue? Can automation improve the popularity of these products? In some cases, yes. Consider the traveler’s check, as an example. Traveler’s checks are becoming less valuable as an option because of the time it takes to order and collect them. How can automation make this easier? Some banks have embraced a format that handles traveler’s checks electronically up until mailing the actual paper checks to the client. Digital records, digital ordering and even digital deductions from the customer’s account make the process more streamlined and easier for the customer.

Traveler’s checks are just one example, but this trend shows how banks must choose automation innovations that are strategic and helpful to the customer will help banks automate without alienating their customers. This requires a clear understanding of the bank’s customer base and what they need. Once this understanding is acquired, the bank can make wise choices about how to move forward with automation.

The key in each of these strategies is keeping the customer’s needs and desires in mind. By doing so, the
modern bank will be able to automate and save money while retaining their customers at the same time.

Banks Are Reinventing Themselves Through Technology

Banks Are Reinventing Themselves ThroughFor the past few decades, technology has been as important a money to most banking institutions. Although previously lagging behind banks, credit unions also have placed a top priority on employing cutting­-edge technology to better compete with their bank siblings.

In many ways, according the venerable Washington Post, financial institutions are becoming “quasi­-technology companies.” This reinvention involves multiple important factors, including the following items.

Newer Banking Technology Initiatives

●  New and/or shared branch innovations expand market areas and control brick and mortar costs. Shared branching is a particular favorite of the nation’s credit unions as they compete with larger banks having a “branch on every corner.”
●  State­-of-­the-­art electronic payment systems streamline consumer bill, credit card and loan payments, while allowing banks to offer the ultimate in customer convenience.
Cutting­-edge vendor management software systems permit financial institutions to manage vendor relationships, while controlling costs.
High-­level security to prevent successful cyber attacks is high priority. Banks utilize complex algorithms to strengthen security and protection of customers’ data.

Avant garde banks often institute even more cutting­-edge innovations. For example, nationwide bank PNC opened two new “universal branches” (their term) in Virginia in 2014, replacing traditional teller lines with employees helping customers, while using tablets to access accounts. Wells Fargo, experimenting with Google Glass apps, has set up initial high­tech locations in Washington, D.C.

Smaller community banks also are coming on board the technology train. For example, Bethesda, MD­based Eagle Banks has quadrupled its technology team since its 1998 opening. Eagle Bank’s COO commented, “The whole philosophy around technology has changed dramatically in the last 10 years . . . In today’s world the customers are the ones telling us what they want.”

This is vastly different from the days, not long ago, when financial institutions dictated the technology offered to customers. The most common current customer request is easy, safe access to accounts and services using their smartphones. For example, at Capital One Labs, the small, two­-and­-a­-half­-year old “technology spin-off” of the McLean, VA giant financial institution, small teams work on creating innovative technology, such as its mobile wallet app, independently or with equally talented partners, such as Apple Pay.

Cyber Security Equally Vital

Recent security breaches at some major retailers, costing hundreds of millions of dollars, keep cyber security enhancements on the banking industry center stage. Bank executives agree that using the most advanced technology is more than important—it is now critical to protecting customer information. Talented hackers seem to rapidly increase their ability to thwart even complex algorithms and multiple security levels. At times, data breach gurus seem to conquer security measures faster than new software can be developed. Hence, the banking industry goal of staying one step ahead of cyber security threats is becoming ever more challenging.

Vendor Management Platforms Control Costs

Proven vendor management platforms and applications offered by top banking software firms, such as Banktel, help financial institutions control costs, while efficiently tracking vendor performance and contracts. As outsourcing becomes more popular, vendor management platforms increase their role in expense
control.

These applications are integral components to the renaissance and reinvention of banks and credit unions, large and small. Smaller institutions typically need to manage fewer vendors, but often lack the talent or personnel numbers to perform this vital function. However, proven vendor management software helps all financial institutions save money and take advantage of opportunities to increase bottom lines via cost control.

The reinvention of banks and credit unions with technology as the vehicle is disputed by few, if any, banking industry experts. For example, Capital One purchased online bank ING Direct for $9 billion (yes, with a “b”) to strengthen its Internet presence. CapOne still adds software engineers, developers, designers and “data scientists” to its staff to improve Internet and Mobile applications.

The commitment to cyber security, vendor management and mobile device banking will continue. While bank advertising may still focus on traditional customer values, the technology reinvention will continue behind the scenes with talented, creative design teams.

Sales Tactics Banks Must Employ

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Increased competition, new technology that is keeping customers out of the branch and increasing costs across the banking industry has increased the demand on sales professionals to do their jobs well in order for the bank to make a profit. Today’s bankers can do well by keeping some sales tactics in mind as they try to sell more products to their customers. Without these fundamentals, your branch’s sales numbers will suffer.

Target the Right Prospects

 

The first step in successful sales is targeting the right prospects. Whether sales professionals working in the bank or calling officers who are soliciting targets in another way, bankers need the tools to target the right prospects.

It helps no one when your sales professionals spend their valuable time calling or reaching out to prospects, filling out applications and running credit checks for offers that are simply not going to go through. Why does this happen? It happens because all too often management expects their sales professionals to find their own prospects, or the bankers are given a list of prospects to contact that has not been screened. This wastes everyone’s time.

The truth, however, is that this is not necessary. Data on prospects is readily available, and the latest analytic programming can make it easy for bankers to receive a targeted list of prospects. Consider, for example, a bank looking to increase its business checking account numbers. By using analytics to identify the customers who are using DDAs instead of business accounts, and targeting those specific customers, the sales team will have a much higher rate of success.

Offer Engagement Services to Harvest Easy Sales

 

Another tactic that banks can use is targeting existing customers with engagement services connected to the accounts they already have and use. For example, a customer with a debit card and checking account can be enrolled in online bill pay or an automatic savings transfer agreement. Customers with credit products can upgrade to privacy protection.

Why is this so effective as a sales tactic? These customers already use, and hopefully like, your bank. As a result, they are more likely to accept the additional service. They are familiar with your bank and enjoy banking there.

Offer the Right Products

 

Your bank has many different products you wish to sell, but not all of these are a benefit to your customer. Banks need to teach their sales teams how to provide appropriate products to the specific prospect they are talking to.

How can you do this? Again, it requires data collection and analysis of that data. Your bank must know the demographic of its typical customer, and target those customers with the products that make sense for them.

Data can be collected in several ways, but customer service representatives are one of the greatest tools you have to collect this data. Customer service representatives need to make notes in a customer’s account when they hear information that could lead to a future sale. For example, when chatting with a customer who mentions children, a note can be made to offer a college savings plan at a later interaction. The more personal and targeted the product offering is, the more likely it will be that the offer is accepted.

Another way to do this is to create packages that target the demographic you see most frequently at your branch. In order to make these packages work, bankers must be trained how to match customers with a package offering.

Sales in today’s banking industry are not easy to come by, but with the right strategies, they are not impossible to make. Target the right people with the right products, and don’t forget engagement services, and your bank will be able to reach your sales goals more effectively, even in a competitive market.

How the Bitcoin Phenomenon Might Affect the Banking Industry

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Since its birth in 2009, Bitcoin has begun changing the face of US and worldwide  finance. The banking community has differing views on its growing user numbers,  volatility and evolution of companies favoring Bitcoin.

Although Bitcoin had little or no dollar value in the beginning, its value has increased since inception. Even global consulting firm Deloitte has weighed-in on the subject,  claiming Bitcoin is developing its own “ecosystem,” which includes retailers, lenders and financial institutions.

Media Attention

 

Along with a growing user base and rising value, Bitcoins popularity has been fueled by increasing media attention. Although primarily an Internet phenomenon to date, expanding attention from print and electronic media has increased its notoriety.

For example, media attention helped drive the price of a single Bitcoin to over $1,100 near the end of 2013. The market wisely determined this price was inflated and during  2014, although its volatility continued, prices generally declined to more reasonable levels. Banks—and

Governments—Are Wary

 

The growing use of this alternative currency has supporters and wary opponents. Supporter identities vary. Although predominantly individuals and an increasing base of retailers, increasing entities favor Bitcoin for its rebellious nature, as a perceived viable alternative to government-sponsored currency, such as the US dollar.

However, the expanding Bitcoin network, evolving to a global level, is making banks and governments more wary than ever. This currency even attracted the iconic global news outlet, The Guardian, after single Bitcoin prices rose to $147 in 2013, before pricing  broke the four-figure level. At the time, The Guardian called the Bitcoin phenomenon  “one of the most intriguing things to have happened in cyberspace” since the royalty-free music of the peer to-peer networks or the furor created by Wikileaks.

Bitcoin’s Mysterious Founder Nakamato

While the alleged mysterious Bitcoin founder, known as Satoshi Nakamato, disappeared from the Internet by April 2011, only two years after creating this virtual currency, the Bitcoin ball was rolling—and has continued since. No one has publicly disclosed to being the missing Nakamato or even if he is (or was) a 36-year old Japanese male he (or she) claimed to be.

Supporters and opponents alike generally agree that “Nakamato” is (or was) a world class C++ programmer with a solid understanding of economics and peer-to-peer networking. Others contend there must have been a talented team that created Bitcoin or “Nakamato” is a genius. The venerable magazine, The New Yorker, called the entity “Nakamato” a “preternaturally talented computer coder” for having the expertise to create “all bit and no coin” virtual currency.

Bank Concerns

 

Totally controlled by software, most observers agree the creation of Bitcoin was driven by the anger and frustration of the global finance crisis (the Great Recession). The apparent goal: Create a currency impervious to volatile government politically-fueled monetary policies or “greedy” bankers. The term “miners” quickly came to be known as people wanting to accumulate Bitcoins.

As US and global interest escalated, quickly over forty exchanges, permitting those with Bitcoins to trade them for government issued currencies, such as dollars or euros. As more merchants began to accept this alternative currency, the value of Bitcoins began to escalate rapidly by 2010.

While most bankers remain unconcerned, some may fear, if left unchecked, Bitcoins could threaten the public trust needed to validate government-issued currencies. In addition to acceptance for purchases, government currency also depends on the integrity of central banks, like the US Federal Reserve.

Since Bitcoin has become a global phenomenon, should public trust dissipate, numerous currencies could suffer. While not close to a reality, such loss of trust, remains a perceived potential threat to the US dollar, UK pound and Europe’s euros. Whether real or mistakenly perceived, the impact on the world’s banking community could be significant should it grow in popularity.

6 Steps Toward Better Vendor Management

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When it comes to managing relationships with vendors, too often businesses focus solely on getting the lowest price and neglect other actions that can help develop strong business relationships. While that may seem prudent from a short­term “bottom line” perspective over time it’s an approach that can backfire and wind up costing you more. Building strong vendor relationships isn’t rocket science, but it does take some special skills and understanding. Here are six tips to help you get started:

● Share your goals. Your vendors are in business too, which means they may share at least some of the same goals as your company. When you explain your overall goals and priorities, you create a feeling of partnership that can help strengthen relationships and ensure the services or products they provide will be more focused on those needs. For instance, letting vendors know about a new products launch that may require quicker turnaround or other resources from their end helps them anticipate your needs so you both achieve a mutually beneficial outcome. And don’t forget to show your interest in their company by asking them questions about their own goals and look for ways to provide knowledge or guidance when you can.

● If you have a vendor who supplies a service or product critical to your business, ask them for their opinion on strategic moves like roll­out dates or minimum thresholds for buying that can help your business run more efficiently. Your vendor will be more likely to work harder when they feel they’re essential to your company.

● Remain loyal – as long as it doesn’t come with significant costs. Just like you, vendors want long­term relationships with their customers, and if you demonstrate your willingness to remain loyal month after month, you’re more likely to get better deals as well as access to expert or “insider” knowledge about products or services you use. Of course, that doesn’t mean you should pay exorbitantly higher prices for that privilege, but it does mean you should avoid switching from one vendor to another just to save a few nickels and dimes. By remaining with the same vendors over time, you can potentially reap much larger savings.

● If you have the resources, assign one person to manage your vendors. Duties include reaching out to each vendor with phone calls and in­person visits when possible, as well as resolving issues and answering questions to ensure the relationship remains as strong as possible.

● Have a written agreement for each vendor that spells out your company’s policies as well as expectations to set the tone initially, then follow up with specific expectations, including pricing and turnaround times, for each order. Make sure you have a record that shows the paperwork (or emailattachments) was received and by whom to avoid miscommunication or mistakes that can cast a cloud over vendor relationships.

● Remember: Sometimes, you have to give something to get something. While getting a good price is important, be willing to negotiate a win­win agreement that benefits both you and your vendor, especially if you have special needs like an unusually fast turnaround time or unexpectedly high volume. Building any relationship is a two ­way street, and it takes time to make sure it’s strong and mutually beneficial. Considering the relationship from the vendor’s side and then working toward solutions and actions that satisfy both your needs will help you strengthen your bond so you both can profit. BankTEL’s agile software applications provide robust solutions for managing vendor relationships and managing risks. Learn more about BankTEL Systems by visiting our solutions page or use our online contact form to speak with a representative.

Capturing the Elusive Bank Account Switcher

Capturing the elusive bank account

Capturing the Elusive Account Switcher

       In the American banking market, customers have a high rate of switching accounts, seeking after new incentives or better offerings and leaving their current bank behind. How can your bank capture these customers and cause them to choose your bank, or, in the case of current customers, stay with your bank? This begins with understanding how these customers think, and it may not be the way you think they do. AOL and Oliver Wyman recently did a survey and study of account switchers, first-time applicants and account abandoners. The study looked at the clickstream history of over 1,700 participants while also asking them some survey questions. The results can help today’s banks understand how account switchers think, and change their own thinking to be in alignment.

Account Switchers Typically Choose the Bank They Already Like

       According to the study, two out of every three of these potential account switchers had a bank in mind before they started their research, and 90 percent of those who had a definite interest chose that bank they liked. This means that banks who wish to capture account switchers need to stay at the forefront of their target market’s mind, before shopping begins. Your branding, then, needs to be “always on” so your bank comes to mind when the first thought of making a switch occurs.

Account Switchers Are Not Influenced by Cash Offers

       Offering a cash incentive for opening a new checking account may not be as effective as it seems at first. The survey found that 40 percent of switchers were influenced by these offers, the offers themselves were not enough to cause people to make a switch. Instead, your company must have differentiators that are well understood and clearly show how your bank is different. Simply offering some money is not enough.

Client Experience Causes Majority of Switches

       Is your bank operating on the fact that life changes cause the majority of account switches? Getting married, moving, having a child and other life changes can cause people to switch accounts, but surprisingly the survey found that negative experience was the most common cause. Your customers demand a positive experience at your bank, and if they don’t have it, they will move on. So how does this knowledge help you capture account switchers? When people have a negative experience at a bank, they turn to the experiences of their friends and family to help them find a new one. This means that you need to cultivate advocacy from your current customers. When account switchers learn about your bank from their personal network, it becomes a verified candidate in their minds.

People Want to Open Accounts Online, but Can’t

       Finally, the survey found that people are running into a roadblock preventing them from opening accounts conveniently online. One out of every five first-time checking account clients surveyed tried but failed to open an account online. As a result, 40 percent stopped trying to switch banks altogether, indicating that the hassle was too great. To capture that 40 percent, consider making your online account opening simpler. Some banks avoid this because they want to have the customer come into the bank for a face-to-face meeting. Rest assured these meetings will still happen. A full 60 percent of those surveyed indicated that they preferred to open at a branch to speak to a person who can answer questions. You will still get your customers into your bank, but allowing account opening easily online can prevent losing those who want that convenience. So how can your bank capture the elusive account switcher? Learn more about how they think, and make changes to your marketing plan accordingly, and you can land these accounts at your own bank.