Risk watch: Are bank staff staying relevant in the digital banking era (1)

Alberta Quarcoopome

“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.

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.

Change is inevitable

Change is happening faster than ever before and new technologies are being introduced that are replacing current jobs and dramatically changing the way most jobs are performed. At the same time, competition and consumer expectations are changing the way every organization will go to market in the future, requiring new skills and insights from executives and managers at all levels of the organization., called the 4th Industrial Revolution, where data, advanced analytics and automation are changing existing business models. This occurrence is so challenging that some banks are not prepared for these massive changes, with some executives lacking the leadership and cultural foundation to be successful.

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.

Moving Towards Artificial Intelligence

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.

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. Interesting.

Re-tooling Staff

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. One critical training need is product knowledge. Expectations for frontline staff are shifting. 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.

The Dilemma of some Executives and Managers

The problem is not only about branch banking staff or front- line staff. The potential loss of jobs in the financial services industry is real. Let us examine this real-life situation of an executive, extracted from “The Financial Brand” newsletter in February 2020:

“At the beginning of the previous decade, I was working as a strategic consultant for a large marketing services organization serving the financial services industry. I was 55 years old, and concerned that the way banks and credit unions were going to connect with consumers would change drastically, moving from direct mail to digital communications. Just as concerning was the prospect of clients assuming I was too old to keep pace with these changes relatively late in my career.

Rather than being complacent and continuing with “business as usual,” I decided that I needed to embrace the marketplace changes that were inevitable, take personal risks, and disrupt my career that had been quite successful for more than 30 years. I decided that I needed to learn new skills and build a personal brand that would show that I was still relevant to clients, prospects and peers.
This is the same crossroads that every financial institution executive and manager faces today. Will people who have built successful careers for decades be able to adjust for the massive changes taking place? Or will they hope that change will not impact them, or that they will retire before they are forced to change or asked to leave the organization?”
Many bankers have reached a crossroad, with several questions on their minds: “Shall I quit and move onto another industry? What is my future in banking? What courses can I take to make myself more relevant and stay?”

Next week, we shall see how various levels of staff can retool themselves to remain relevant in the banking industry.

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 21st 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.

Website www.alkanbiz.com
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