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Disruption or Dystopia - The Impact of Software on Branch Banking Roles

By Nick Miller, President, Clarity Advantage Corporation

Nick Miller, President, Clarity Advantage Corporation

“Which banks in Boston (where I live) offer the best checking accounts?”, I asked my phone.

“OK, I found this on the web,” she replied, listing several articles about the checking accounts in Boston and in Massachusetts. I picked the first article, a review of bank checking accounts in Boston. Best free account, best branch networks, best customer service, best student account.... and the ability compare features, just like I were looking for a refrigerator or a laptop.

“And, I need a mortgage. Which are the best places to apply for a mortgage in Boston?” Again, within seconds, several “best of...” lists popped up.

“Thank you,” I replied, “and what’s the best credit card for me to use for travel rewards?” Within two seconds, she’d found several sites on the web that recommend ‘best travel rewards cards.’

“And, I want to develop a new financial plan for retirement.” Two heart beats later, “Here’s what I found on the web for ‘I want to develop a new financial plan.’ ”

"Bank managers, from first level to executive, will become significantly more concerned about and focused on employee development to assure their employees have mastered the personal skills"

“My spouse and I don’t agree on how to do our budget.” (Pause) “Here’s what found on the web for ‘my spouse and I don’t agree...'”

“Thank you,” I said, “I’m very grateful.”

“Your wish is my command,” she replied.

So, why do I need to go to a branch or talk to branch staff? Yes, I know the research indicates that more than 50 percent of consumers prefer branches when they’re purchasing new products...and many/most bankers seem reassured by that number. I don’t think we should plan for that.

We—any of us—can identify the best providers, open accounts on line, transfer money to those accounts, apply for credit cards, apply for mortgage loans, receive investment advice, and Docusign almost anything from phones, tablets, or laptops. Why take the time to go to a branch?

“One more question,” I said. “How much do I need to save for my daughter’s college education?”

“I don’t have an opinion on that.”

OK.... maybe I need to talk to someone in a branch about that.... because the answer is, “it depends.” The answer requires judgement, an assessment of an uncertain future, an understanding of values, an insight into family dynamics, as well as some insight into college options and funding alternatives. That’s a lot to read about or search for. Much better to talk to someone who can cut through all of that quickly and facilitate a discussion to reach a decision.

How do we get to there, in our branches, from here?

1. The content and extent of training will change.

During the next five to seven years, sophisticated software will perform the work described above and more; bankers’ roles will become, increasingly, “schmooze at the front end” and “guide fulfillment at the back end.” Software will analyze clients and markets, guide conversations, recommend appropriate solutions, initiate product fulfillment, and check on client progress.

Bankers will need to learn far less about many of the topics on which they are trained now. And they will need to learn far more about one thing many branch employees lack now: judgement—how to help clients make decisions that they can’t make through self-service or available cloud software or by talking to their friends. Decisions that are harder than “which is the right checking account?” or “how much can I afford to borrow?” or “should I take the Rewards card or the Cash Back card?”

Bank CXOs, CIOs, and HR leaders will need to address, in a completely new way:

• What skills, capabilities, and knowledge bankers need to perform well in their jobs (as in, which do they need and which will software and performance support tools provide to them)?

• How best to help bankers develop the knowledge, skills, and judgement that they need to complement the software they’re using?

• Would the answers be different for bankers serving mass market consumers and small business clients and bankers serving middle market or large corporate clients?

2. The delivery of training will shift more toward “when needed”—just in time, just enough, just for me, integrated with work tasks.

Just as many of us have become accustomed to learning what we need when we need it, frequently through apps on our phones or tablets or “short courses” on line (think Kahn Academy, for example), so the delivery of training will change. Increasingly, bank employees will follow ‘learning paths’ or ‘certification paths’ that prescribe combinations of learning, practice, and application experience. They will participate in training experienced electronically at prescribed points in those paths. These will be integrated with performance of job tasks.

Through currently available software and computer-mediated learning, bank staff will learn, practice, and master skills ranging from completing teller transactions to sales conversations. In many cases or most cases, they will learn better and faster because of the software—less wasted time, customized remediation, accurate assessment of progress.

3. The need for coaching or facilitation will increase.

That said, bank managers, from first level to executive, will become significantly more concerned about and focused on employee development to assure their employees have mastered the personal skills, the software utilization skills, and the judgement that will be required for their jobs. These requirements will drive an increase in facilitation and coaching and increased attention to assessment and certification.

How Much, How Fast?

The time frame for these changes? One can see leading tendrils of each change in industry and academic settings; the banking industry is, already, adopting performance support software and cloud-based learning for skills ranging from simple transactions to complex conversations. The direction is clear. The timing for individual banking institutions may vary from three to ten years. A significant shift will be visible within five years.

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