The topic of the universal banker is hot and the need for them is clear: Branch traffic is declining, banks have shrunk staffing to the minimum and as a result, 50-60 percent of all branches are staffed at the minimum level just to keep the doors open. Most financial institutions recognize it’s simply unsustainable to employ specialized staff (tellers who do monetary transactions, bankers that handle account servicing and opening) when the real need is for flexible, multipurpose team members who can move between roles.

In the long run, this may mean that more branches shift to assisted self-service with video links to a remote teller or banker. But that model is not yet proven. As recent research from Celent shows, about 90 percent of customers prefer some physical interaction with branches, with the mix split between those who primarily prefer branches and those who prefer them for at least some interactions.

While we expect the shift toward mixed channel usage to continue, that doesn’t mean branches with personal service are going away. Even younger customers strongly prefer banks with reasonable physical convenience and are surprisingly less likely to turn to digital-only banks as their primary financial institution. BAI Banking Outlook statistics shared at BAI Beacon 2018 support the importance of the branch in choosing a primary bank relationship.

So if consumers still want branches where they can talk to a real person, and if the cost of retrofitting the existing network is large, then it is logical to assume that something like today’s distribution mix will be with us for decades. It will evolve and change, but that will take time.

Still the road to a universal banker model has been tough for many banks to navigate. We often hear the complaint “We cross-trained our staff and paid them more but aren’t seeing the results.”

With that admonition in mind, I was very pleased to lead “Exploring the Universal Banker,” a panel at BAI Beacon, with three institutions that shared their success stories: Frost Bank, Broadway Bank and UICCU (University of Iowa Community Credit Union). Here’s what we learned:

Does it fit everywhere or just certain branches?

Frost Bank had the most mature approach, in the sense that they had started moving toward this concept about 15 years ago with their first generation of new, open branch designs. Now they have universal bankers in about 50 percent of their 100-plus branches. Does it fit everywhere? For now, Frost has chosen not to implement this in their highest volume commercial banking centers, or those that lack teller automation.

Broadway and UICCU are making the change in all their branches. As the benefits became clear, they adjusted their busier branches to accommodate the concept rather than run two separate staffing models.

What next: renovate branches? Invest in new tech?

No, but it helps. Broadway Bank offered the most compelling example of how to implement the universal banker in traditional branches. Like many banks, they had older facilities with traditional teller lines, tight security for access to cash handling areas and dedicated drive-up stations.

Rather than wait years to remodel the branches, they enlisted branch staff to envision solutions.  The simplest?  It followed the lines of, “I don’t need all these teller stations. Why don’t we cut down the line and open it up?” This led to a series of branch fixes that cost on average $25,000—which meant they could remodel 10 branches for the typical cost of a single branch.

Over time, Broadway added cash recyclers, redirected pneumatic tubes from the drive-up into the teller line, and eliminated the dedicated drive-up teller station. While this involved some additional equipment cost, personnel savings more than offset it.

Both Broadway and UICCU made a key point: It became a strategic priority to implement the universal banker model, and that meant they had to work with the branches they had rather than wait years to make progressive changes and create “ideal” conditions.

Three variations on a cost-savings theme

All three institutions were emphatic that the shift to universal banker yielded significant cost savings—although each had very different examples.

Frost’s branches have evolved over the years to an even more open concept, anchored by a circular central station that combines teller, concierge and customer service functions.  These more compact, automated branches—most of which do not have drive-ups—can be run with only three full-time employees, plus a manager who covers two to three locations. They invested the significant cost savings in digital services and extended call center hours.

Broadway also experienced direct reductions in labor cost but also captured significant operational savings. For example, by reducing the number of branch positions, they simplified recruiting; by combining teller and new account training, they shortened the total time by about a week. Other savings occurred in IT administration and branch operation.

UICCU faced a different issue. Teller turnover ran about 100 percent but by creating more fulfilling jobs, better career paths and a slight pay adjustment (50 cents an hour), teller turnover was reduced to 43 percent. Not only did this lower recruiting and training costs, but it also created a more experienced branch staff that produced higher sales levels.

‘Take 5,’ get five times the sales

UICCU began implementing the universal concept by better utilizing tellers to handle member (customer) onboarding, retention calls, and relationship expansion (cross-sell). Most branches still have designated lenders, personal bankers and even tellers, but the branch staff functions as a team: a key universal banker concept.

Here’s what matters: an emphasis on coaching, team coordination, training and marketing support—along with an elimination of nearly all administration and operations activity so everyone can be customer facing.

UICCU developed a concept called “Take 5,” which means if you don’t have a customer in front of you, you should do some type of member/customer outreach—even if you only have five minutes. That includes tellers. Unlike other institutions that worry tellers will say the wrong thing, UICCUU coaches them on what’s permissible and gives them a key role in the sales and service process.

The payoff? UICCU’s sales are four to five times that of a typical bank branch.

Parting shot: You can’t communicate enough

All panelists agreed: communicate, communicate, communicate.

Frost Bank described a very disciplined approach based on Blanchard’s change management model. It began the process months in advance of anticipated implementation, modifying job positions and setting expectations for new roles so change would come as less of a surprise.

One major takeaway: Start with the branch managers. When asked what they would have done differently, all agreed that it was too easy to overestimate the impact on long-term tellers and personal bankers and underestimate the impact on branch managers. Frost addressed this head on, making sure to train managers first on any new process and then make them responsible for training their staff.

To be sure, the ceaseless speculation on the future of branches will dominate 2019. But for all the heated debate, rest assured the universal banker will remain hot. Now’s the time for smart banks, then, to take their temperature: to assess and address branch strategy success.

Want more information on the universal banker? See David Kerstein’s recent article in BAI Banking Strategies, Six branch roadblocks to overcome on the way to universal banker success, and listen to his interview on the BAI Banking Strategies podcast.


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David Kerstein is president of Austin, Texas-based Peak Performance Consulting Group, which specializes in community and retail banking strategies. He can be reached at dkerstein@ppcgroup.com.

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