This year, people across demographics have adopted digital options for interacting with their friends, businesses and even banks. Many banks – and their employees – will see lasting impacts.
Pandemic restrictions have compelled banks to serve customers through online and call center options in communities across the country. “This is an exogenous event that’s challenged banks at a time when many felt they had their operating models worked out,” said Grant Thornton Financial Services Managing Director Chris Acevedo. He added, “In practical terms, you’d have to say that most banks pivoted very well – COVID-19 has been a test of the resilience, agility and adaptability banks acquired from spending on new technology at an exhaustive rate for the last decade and a half.” The quick response to recent challenges demonstrated how far many banks have come in their digital transformation, but also uncovered gaps and opportunities to better serve customers and employees.
In fact, recent disruptions have dramatically accelerated a long-term digital shift that will continue into the future. This shift will not just change the way banks serve customers, but the way banks get work done. Banks and their employees responded to recent changes well, and now need to identify how to provide a differentiated customer experience and service that sets their bank apart. Bank managers and employees need to adopt a perspective of adapting to change.
“There are so many moving parts, and people’s ways of working have changed, will change and will continue to change. It is an ever-evolving solution-driving discussion across the organization,” said Grant Thornton Principal and Business Change Enablement Practice Lead Joy Taylor.
“This is a call to arms for banks to be agile and resilient, and to have a fungible workforce that can do different things”
– Sean Groves,
Grant Thornton Operations Transformation
“This is a call to arms for banks to be agile and resilient, and to have a fungible workforce that can do different things,” said Grant Thornton Operations Transformation Senior Manager Sean Groves. “This is about organizations realizing that things are going to happen that’ll demand different working situations and environments.”
Serve customers in a new way
As customers fully adopt and adapt to remote options
, banks need to make sure those options represent them well.
“When customers embrace using the call center, digital channels and mobile banking, that really raises the bar on the performance of those capabilities,” Acevedo said. “So, the question becomes not just ‘Do you have the capabilities,’ but ‘How do you still imbue a sense of personal touch and knowledge of the customer in the customer experience?’ I think that is a significant challenge that isn’t going to be solved by spinning up technology alone. It calls for rethinking the operating and service model with a new strategy more weighted toward digital customer service and digital ways of working. During that transition, it’s critical to have an effective strategy for managing change, talent, training, productivity and employee sentiment.”
“‘How do you still imbue a sense of personal touch and knowledge of the customer?’ … It calls for rethinking the operating and service model with a new strategy.”
– Chris Acevedo,
Grant Thornton Financial Services Transformation
“New demands from new adopters in customer channels will cascade through the organization and impact people who directly and indirectly serve customers,” Acevedo continued. “And those people have to be supported – upskilled, trained and enabled with enhanced analytic insights, tools and technology to serve new customer needs.”
Digital banking is the new reality, but digital transformation affects many teams in the bank, and sometimes that transformation meets resistance. “In the middle office and back office, there are different implications for different parts of the organization. There can be cultural impediments to change, and legacy ways of thinking, like ‘All of our employees need to be in the building in order to be effectively managed,’” Acevedo said.
Transformation requires new ways of thinking, managing and developing talent. There is tremendous value waiting to be unlocked by bank operating models that empower new ways of thinking and working. The current disruption will catalyze action for banks that take a forward-looking view and envision the performance opportunities.
Manage your culture carefully
The real challenge is to develop a digital culture that integrates with other important aspects of your bank’s culture.
“When you think about a regional community bank, the culture is the people who work within it and the people in the community.”
– Joy Taylor, Principal and
Practice Lead, Grant Thornton
Business Change Enablement
“When you think about a regional community bank, the culture is the people who work within it and the people in the community,” Taylor said. “And I don’t think that culture needs to change significantly,” Groves said. “If this is handled correctly, even a small-town bank that’s focused on customer relationships can keep the same culture, philosophy and mission within the bank.”
“One important question is 'How do you keep employees connected to your cultural identity and your brand promise while they work in an increasingly digital and distributed way?' It’s critical to have that culture shine through in positive ways while serving customers – those things don’t change,” Acevedo said.
“It’s about having the right people, equipped to answer the questions that go along with the changing ways that customers bank,” Groves said. “So, instead of having all of your tellers waiting for foot traffic to come in, maybe have some of those people serve a call center or work from home answering questions about the bank’s new technology and digital offerings.”
Teach new ways to interact
“We need to consider how these communities will reach out to their patrons without physically seeing them anymore,” Taylor said. “There are going to be some big changes, and some significant technology challenges, especially for some individuals who have worked in their banks for years. Regional banks are going to need to teach some very new skills to some people in the bank, and some people in the community.”
Apart from learning new technologies, employees need to learn new ways to do some traditional things. “If your employees are used to helping people make choices about financial products and services in person, you’ll need to teach employees new approaches to identifying needs through the lens of a computer,” Taylor said. “Instead of saying ‘While you’re here, the paperwork is very similar for another service,’ you might need to say, ‘Knowing that you’re starting a business, here are some other products that you should consider.’”
Track your performance and productivity
As banks assess performance and plan for the future in new digital models, it’s important to establish the baselines, data and tools to measure performance and productivity. Banks need to ensure they are tracking key growth, efficiency and risk dimensions.
“With the push toward remote work, it’s important to make sure that your workforce is still productive and meeting stated goals and objectives – whether or not they’re the same now as they were a few months ago,” Groves said. “And those goals need to be clear.” Digital ways of working can yield clear and valuable metrics, but banks need to know what numbers to capture and how to interpret them.
“It’s not all just dollars and cents,” Acevedo said. “It’s ‘performance and productivity,’ broadly defined. It’s employee engagement. It’s employee sentiment. It’s customer satisfaction. It’s employee adherence to controls. It’s the cost to serve. There are many levers of performance that have to be tracked and managed.” Now is a good time for banks to assess how they are performing in key dimensions and create action plans to close the gaps. What will enhance performance while at the same time help you build resilience, agility and adaptability into the organization?
It’s your move
As bank managers consider questions about new trends, they might be responsible to find the answers themselves. The pace of recent changes has pushed more managers and employees to address challenges on their own.
“We’ve found that the decision-making hierarchy has flattened,” Groves said. “Many banks are putting more responsibility and onus on branch-level managers. They’re creating policies and communicating more, to drive that decision making down, just because of the sheer number of decisions that have been made in a short amount of time. So, branch-level managers have policies and procedures that guide them, but more responsibility really rests on them now, as opposed to regional managers or directors.”
“Banks have had to adapt. They’ll have to adapt further going forward, and it’s a big ocean. That’s why a framework can help bring it back to themes like productivity, performance, resilience, control and customer experience,” Groves said.
Banks can use a decision framework
that aligns performance strategies with revised business and operating strategies to inform their decision-making and roadmaps. This helps to inform their strategies and redefine their approach to being successful digital-era banks. “At the end of the day, banks are still going to have the same objectives – happy customers, happy employees, high growth, high profitability, high earnings per share – for an acceptable level of risk. That doesn’t change,” Acevedo said.
Principal and Leader,
Business Change Enablement Practice
+1 215 561 4200
Financial Services Transformation
+1 212 542 9640
+1 212 542 9603