Risk WATCH WITH Alberta Quarcoopome: The banker-customer relationship in the digital banking era (1)

“Banking is necessary, Banks are Not.” ? Bill Gates

As a regular facilitator of training programs, I regularly encounter bankers who have no inclination of the effect that the fourth revolution is having on their jobs. Sometimes I jokingly describe my perception of some of their routine daily activities, ” Debit, Credit, Balance, sleep, REPEAT!  The digital revolution is fundamentally impacting every industry across the board, and banking is no exception — in fact, far from it. As focus shifts from paper money to digital distribution, the implications for the banking industry are significant.

Staying relevant in the branch space

The focus in yesterday’s banking space was on being service-focused, procedural, re-active and hierarchy-driven. On the other hand, today’s market space focuses on being digitally-savvy, open and communicative, customer-oriented, results-driven, advice-focused, teamplay, energetic and self-motivated.

There’s been a lot of discussion in the industry about the future of the branch. There’s no arguing that branches are expensive, and many players have even argued that they’re no longer relevant in a “digital world.” However, branches represent an opportunity for banks to differentiate and build loyalty with their customers.

This can be through great, advice-driven experiences with frontline staff. There are several benefits of moving frontline staff from transactional to advisory positions.  Bank branches now have less transactions and rather need more expertise. What customers now need is guidance and advisory services. The banker-customer relationship is still key whether in traditional and digital banking.

Most senior management across the banking sector are aware of the fact that digital disruption, data explosion, and customer experience are driving the mandate for intelligent operations. Traditional banks are now deploying technology and provide technology-driven experiences to customers.

The shrinking number of front liners in the branch

Many customers have been complaining about the reduced number of teller counters in banks. Of course, many banks were built before the introduction of ATMs, internet banking, mobile apps etc. Banking halls are virtually empty, or with a few people conducting physical interactions/transactions.

Since technology started enabling bank customers to tap their smartphone screens to transfer money between accounts or deposit cheques, the functions that used to require walking into a branch and talking with a front liner is getting extinct. However, it is the failure of the systems that would require some customers to walk into a banking hall….even the digital-savvy Millennials. Customers who frequently visited a teller had tried to complete their banking transaction elsewhere — online or through mobile or a call center — before going to a teller.

Bank of America, for example, stationed “digital ambassadors” at bank branches who help customers specifically with digital banking questions. These ambassadors walk around with smartphones and tablets, and demonstrate to customers digital options like remote cheque deposit. Recently the creation of the digital branches by some banks in Ghana is a step in the right direction to satisfy those who are too busy for the human interaction.

Artificial Intelligence: Its impact

As banks adapt to customers’ changing needs, they’re employing artificial intelligence to help deliver some of the customer service that tellers traditionally provided. Bank of America, for example, is among the companies using cutting-edge technologies like banking chatbots — conversational assistants powered by artificial intelligence and predictive analytics that can answer basic banking questions like “What is my account balance?” or highlight spending patterns via text.

Wells Fargo in February 2019 announced a major push for AI-focused personalized customer service that would, for example, send customers text messages alerting them that they don’t have enough in their account to cover an upcoming car payment. Despite all this, AI cannot completely replace the personal touch of a human being or better still a human banker.

The origins of banking services offered by robots

In one of my articles in 2019, I mentioned many awesome banking innovations being undertaken to intensify virtual banking in the advanced economies. Despite the introduction of digital branches and robots, customers at a point need to be referred to a human banker. In the case of HSBC, Pepper, the finance robot was created in 2019, at 4 feet tall, shiny white with a lemon-shaped head, large eyes that light up blue, and a tablet attached to its chest.

Instead of replacing tellers, the robot’s job is to lure pedestrians into HSBC’s flagship on Manhattan’s Fifth Avenue, then pose for selfies, field basic questions and direct customers who need real help to the right human. “Pepper’s job is to bring you information about basic services offered by the bank, so the bank’s human employees will have more time for “deeper, more high-value customer engagements,” a bank official said in a recent news release.

Pepper is friendly and social, says Jeremy Balkin, head of Innovation at HSBC Bank USA. It can show customers “how-to” videos on its tablet. It can teach customers how to use the bank’s ATM machine or download its smartphone app. It can send links to your device to help you apply for a credit card or open an account.

Quickening the pace of digital banking

There are some critical training needs that financial institutions can help bridge the gap to ensure their staff fit well into the digital banking era.  In the advisory role that the few branch staff left in digital branches would have to master in, product knowledge is key. Customers who walk into a branch, whether traditional or digital have become very assertive and know what pertains in other banks as well as the promises made online. Not being experienced enough in financial advisory and business operations would cause modern customers to resort to do strictly online banking.

Concentration on new skills reflect the importance of being tech savvy and having a good understanding about the business. For a bank to succeed in the technology-driven world, technical talent is important. However, there is also a need to value enduring human skills for a bank to succeed in the long run. Upskilling and retraining are key for current and future bankers to work more effectively in a digital environment.

Paradigm shift in skills required for banking

With the above-named developments and disruptions in the banking world there is an urgent need to re-tool bank staff to make them more relevant to the changing times and continue the banker-customer relationships. When customers walk into brick & mortar locations, they expect more than just friendly staff. They want employees to be product experts, able to recommend relevant options and answer any questions they have. If they don’t get that experience, many simply leave.

Knowledgeable frontline staff affect everything from how likely the customer is to buy, to how they purchase, to how likely they are to return to your bank. Product knowledge is therefore crucial for customer service, and the objectives of Product training program should consist of increasing product knowledge, build confidence in using or cross selling the products.

There has been a shift over the past decade in the type of skills that leaders say they are looking for. Banks are looking for employees who can work well with new technologies but also display leadership, creativity, empathy and curiosity. This shows that it is not enough to have only technical skills related to digital services and artificial intelligence. In making reference to the permissible activities, banks have collaborated with fin-techs to perform transactional services in all aspects of banking.

Lifelong education always ensures relevancy

At a period of continuous massive change in the financial services sector, coupled with closure of  financial institutions, one should not be impervious to learning what went wrong and learning how  to stay relevant to ensure survival in the marketplace as well as for ongoing survival for businesses.

These days one should not stop learning when one graduates from school. In the new era of digital banking, there is a need to learn new skills in business today including coding, digital analytics and others.  There is an obvious need for mastery of essential knowledge to apply data handling methods to inform business and financial decisions. While some organizations are embracing this need by committing to training their employees, most organizations expect employees to learn on their own.

Next week, we shall look at the list of services listed in Act 930, and see how useful employees can benefit from them, to find more modern means of enhancing the banker-customer relationship.

 …to be continued

ABOUT THE AUTHOR

Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of Three books: “The 21^st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story” and “The Modern Branch Manager’s Companion”. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud.

CONTACT

Website www.alkanbiz.com

Email:alberta@alkanbiz.com  or [email protected]

Tel: 233-0244333051/ 233-0244611343

 

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