Despite the growth of the online channel, the branch remains central to any member service strategy. According to a recent Forrester study, only one in three financial services consumers intends to do routine transactions electronically in the future. The majority of consumers, therefore, continue to rely on the branch to conduct many of their banking needs.
In recent years, banks and credit unions alike have been rapidly adding branches to better serve their customers. According to the FDIC's Future of Banking Study, while the number of bank institutions dropped 29 percent, the number of bank branches has increased 15 percent. Credit unions too are increasing their network with over 800 new branches added in the past year.
As credit unions expand their branch network, it is important that equal attention is paid to making existing branches more productive. To improve branch productivity, credit unions need to develop a personnel strategy, reengineer key processes, and design an effective branch layout to create a positive experience for their members. In part one of this article series we will discuss the importance of developing an effective personnel strategy.
Developing an Effective Personnel Strategy
For many credit unions, the role of the branch is evolving from a product-oriented, transaction-based model to a more customer-centric, advisory-based model. This evolution requires credit union executives to reevaluate the roles and responsibilities required of branch staff and develop an effective personnel strategy.
Branch staff—from the branch manager to the teller—represent the public face of the organization and are the credit union’s “front line” when interacting with members. To ensure that these individuals are meeting the members’ needs in an efficient manner, credit unions should review the following areas:
As credit unions rethink their branching strategies to achieve greater productivity, they may determine that existing staff do not have the skills and experiences required to execute the plan. Investing in the continual education of the staff, therefore, is vital to enhancing branch effectiveness.
Training tellers to be more knowledgeable about the products and services can help increase sales and improve efficiencies. Denali Alaskan Federal Credit Union ($344 million, Anchorage, AK), for example, found that branch staff could be effective at promoting the credit union’s online channels. Members who had face-to-face interactions with branch staff generally used their online services more effectively.
Training programs alone, however, may not always be sufficient in increasing branch productivity. New roles and responsibilities may require credit unions to hire staff from outside to meet these needs. Credit unions seeking to revitalize a credit card loan portfolio, for example, may need to hire people with credit card marketing experience. Appreciating existing personnel gaps and hiring the appropriate staff is necessary to improve branch productivity.
Credit unions can make use of incentives to encourage a desired behavior and reward results. There are a number of different ways to incentivize staff, from offering monetary rewards (e.g. bonuses, variable compensation) to “in-kind” rewards (e.g. tickets to events, free dinners), to non-remunerative rewards (e.g. recognition awards). Credit unions have different philosophies when in comes to incentive programs. According to Sue Douglas, chief operating officer of North Carolina State Employees’ Credit Union ($12.7 billion, Raleigh, NC), the credit union does not use financial incentives to motivate staff. Others, like Pacific Service Credit Union ($1 billion, Walnut Creek, CA), utilize incentives to encourage and motivate staff.
Relationship-building at the branch is critical. With effective staffing, you can cultivate a productive and efficient branch that delivers superior member service.