Banks seek to improve the customer—and employee—experience
By Jim Eckenrode, TowerGroup
Over the past three decades, bankers have been relentless in their pursuit of increased productivity and efficiency. Major gains have been made through effective application of technology to problems of both scale and complexity. The results are in: Bank efficiency ratios have improved significantly over the past decade. And profitability—particularly in the retail banking lines of business—is at historic highs in many developed countries.
Despite these major gains, bankers have often been accused of irrational exuberance, particularly in their willingness to invest in technology that defies their implementation skills or does not reflect customer needs. Look no further than the development of ATMs, call centers, and Internet banking, which some bankers thought would render branches obsolete. We now know better.
Banking still is (as it has always been) a people business, with the net effect that banks are now building more and better branches to welcome their customers and prospects with a little caffeine and conversation. Employment has increased in the industry as a result: U.S. commercial banks have increased total employment by 20 percent since 1997. And in terms of expense categories, large banks around the world report that their salaries and benefits costs are the largest single category of expense, dwarfing their investments in technology (exhibit 1).
Given these factors—that customers seek banks because of their people, and that banks have more people than before to help these customers—the imperative to attract, develop, manage, and retain the right mix of staff in skill and number is high on the list of objectives for most bank managers. In other words, banks are interested in improving the banking experience for their customers, but also for their employees. At the core of discussions about how to improve the employee experience is the concept of an employee portal—a desktop application to be used by internal bank staff for their own enlightenment, development, and motivation. Through an employee portal, three areas of functionality, e-learning, staffing, and incentive management can provide real benefits to bank employees.
Benefits of e-learning
Most training and development in the bank today is provided through one-to-one coaching and formal training classes. In contrast, e-learning represents an emerging set of computer-based training applications that enable training to be delivered from the staff member's desktop. These applications are not meant to supplant all coaching and classroom training, but to supplement these methods with more directed and timely training during periods when customer volume is low. As such, e-learning can be used to fill otherwise wasted time when the branch is overstaffed and employees are idle. In fact, employee idle time can be beneficially used for e-learning: Managers can create schedules that err on the side of overstaffing rather than understaffing. This scheduling approach better meets customer service goals without the inefficiencies typically associated with overstaffing.
Most e-learning applications provide authoring tools that enable users to quickly develop and deliver courses as needed. For example, by capturing customer sessions from a quality monitoring application, the e-learning application can develop a short course about a particular best practice that should be shared through the branch network. Another function of some e-learning applications is the capability to assess the effectiveness of training and development on employee performance by comparing performance metrics before and after the training is delivered across all agents.
Benefits of workforce management and staffing models
Basic forecasting and scheduling tools are used throughout many industries, from manufacturing and distribution to healthcare and other service sectors. The mathematics behind service system forecasting and scheduling has some unique characteristics that must be considered to ensure accuracy. Service systems generally have what is known as perishable products. The service system product (the customer) can not stay on the shelf (in queue) forever. While manufacturing systems simply create queue storage areas for work in process, service systems must pay much more attention to queue length, wait times, and handling. For example, customers only stay in a queue so long before they become agitated, eventually abandoning the teller line if the wait reaches their tolerance threshold. A branch or contact center workforce management application helps management put the right number of staff in place to handle anticipated volume. Branch or contact center managers can then use the application to set schedules, monitor staffing levels, and balance skill set requirements with observed transaction patterns. Exhibit 2 highlights the functionality of workforce management applications. Performance optimization takes workforce management to the next level by providing tools for managers to better match their staff to current and future needs.
Benefits of Enterprise Incentive Management
The human resources department of retail banks is not immune to the cost-savings drive that has ensnared the banking industry for the past 25 years. Aside from being on the front line of managing reductions in the employee workforce, human resources must provide services to the rest of the organization more cost effectively. One trend that banks have gravitated toward in recent years involves using Web-based portals to manage employee benefits—such as sales or other incentives—and encouraging employees to actively manage their benefits such as 401(k), insurance, and healthcare plans via a secure intranet.
A clear benefit of the packaged Enterprise Incentive Management solution is the ability to give employees feedback about their sales performance through secure portals. Dashboards can provide both managers and employees with performance information about team and individual goals in near real time. Misunderstandings about goals and activity levels can be addressed promptly, obviating the need to wait until the end of the reporting period. Banks that are serious about inculcating a sales culture understand that information about goals and objectives goes well beyond providing facts about current and expected performance. This information becomes an integral part of sales coaching and employee development. Banks strengthen the links between employee behavior and corporate business goals when they make performance information readily available to employees.
Conclusion
Customer demand for face-to-face interaction has not waned over the years, despite the development of myriad self-service options. Turnover in retail bank branches and call centers is still at unacceptably high rates. This, combined with the fact that banks have a wider and more varied set of products and services than ever before, means tools such as e-learning classes, staffing models, and enterprise incentive management applications are ideal offerings to distribute via employee portals.
Jim Eckenrode is vice president of banking and payments at TowerGroup, a leading advisory research and consulting firm focusing on the global financial services industry. He can be reached at jeckenro@TowerGroup.com.
