Branches aren’t going away but most built for a different era. Should you keep it, close it, move it, remodel it, or add capacity to capture market opportunity. And if you remodel, should it be a simple re-fresh or a full remodel?
Jon Voorhees, who is now a consultant with Peak Performance but formerly was senior vice president for retail distribution execution at Bank of America, discussed these issues in a presentation at Esri’s annual mapping conference in 2014, including some of the ways distribution planning is integrated into the overall bank strategy:
- Market investment prioritization
- Branch & remote ATM planning
- Regulatory compliance
- New branch forecasting
- Customer spotting
- Attrition-retention modeling
- M&A analysis
- Risk mitigation
- Asset management
As BB&T and other banks look for every possible competitive advantage, no matter how small, GIS software is playing a key role in developing ever-more-precise views of data. While GIS tools have been around for years, the software has become more advanced recently and more and more banks are using it for an increasing number of projects.
“You could look at a spreadsheet with 30 columns and try to figure out your decision, or you could look at a map and see it all in one place and the decision becomes much more apparent,” said Jon Voorhees, a former senior vice president for retail distribution at Bank of America, who is now an adviser at Peak Performance Consulting Group in Austin, Texas.
Now, banks create maps using multiple layers of data, tracking everything from the rate of nonperforming loans to levels of homeownership in specific census tracts. Mapping software can also help banks monitor potential security threats and even manage where and how to deploy executive talent.
John Voorhees, consultant and advisor at Peak Performance Consulting Group, was one of seven experts asked to share their vision of what bank branches will look like in the future in this Banking Strategies article and as part of the Executive Report on the Evolution of the Branch.
Speaking specifically about how customers will be assigned, John states “The platform will consist of even more specialists, and platform bankers may be assigned a portfolio of customers when issues need to be resolved—think of the olden days when you could go see ‘your banker.’ Customers may be able to communicate with branch personnel via Skype and more banks will also have private soundproof rooms in which customers can have face-to-face conversations with offsite bank specialists via video-conferencing.”
Jack Hubbard, of St. Meyer & Hubbard, is one of my favorite people, not only for his insight about sales (he is widely known as the “Professor of Prospecting”) but also for his openness and generosity in freely crediting industry thought leaders he admires – even if they are competitors.
Jack quotes his friend Charles Green in saying “You are a trusted advisor when you willingly refer your top client to your top competitor because you know that competitor can help your client better than you can.”
Jack just published a humorous and timely article on The United States of Sales – his 2017 Inaugural Address as if he were elected President of Sales. In it, he lists the industry resources he turns to. Some are competitors, most are not. It’s a great read – and a great list of resources.
We were so honored to be names to his Cabinet as the Baron of Bricks and Sticks!
“Baron of Bricks and Sticks. David Kerstein, President of Peak Performance Consulting Group is my go to guy when it comes to branching and the issues surrounding those buildings and the people in them. David writes eloquently about trends dealing with pricing, profitability, strategy and overall effectiveness of the branch and call center of the future and the present. David is a former banker with decades of experience in retail financial services. I go to his website often to see his articles, white papers and research at www.ppcgroup.com. “
David Kerstein, president of Peak Performance Consulting Group, was interviewed by S&P Global (formerly SNL Financial) about FinTech and the whether they are competitors or partners. He said that digital disruption isn’t new, citing past developments like automated teller machines and automated call centers. The difference, he said, is that today’s developments are much more rapid.
Nonbank competition can be a sore subject among community bankers as the banking landscape — along with customer expectations — is continually changing. “If you think about it, banking and technology have been tied together for all of our lives,” Kerstein said. “These were developed not by the core banking providers, but by what we would now call fintech firms.”
Today, wealth management is one area where small banks and fintech companies are teaming up. He said he sees ample opportunities for robo-advisory companies to team up with community banks to simplify and standardize wealth management platforms, citing SigFig Wealth Management LLC’s partnership with Cambridge Savings Bank.
Fintech companies such as PayPal Inc. and LendingTree Inc. have put pressure on banks to up their digital game, and teaming up with fintech companies rather than competing with them is a sensible solution, Kerstein said.
“There’s a huge number of fintech initiatives that are really building their business propositions around providing services to financial institutions to make quicker loan decisions or provide more efficient investment advice,” he added. “Small-business processing has been complex for financial institutions. It’s been difficult to maintain the skill sets, just given the amount of training that it takes and the skills of loan officers.”
For more, see the full article.
So begins a new year, a new administration and new possibilities in the ways banks will approach business and operations
This article was originally published in BAI Banking Strategies .
It’s that time of year again—time to put away the ball in Times Square and polish up our crystal ball for 2017. What do we think will be the key trends for the industry? Here we present our picks for distribution, innovation, technology, and compliance.