- This move gives credence to the “branch is not dead” argument. Financial institutions serve a diverse customer base with differing needs and preferences. As much of a success as Deposit@Home and Deposit@Mobile have been, they have not rendered branch banking obsolete – even for USAA. Traditional retail banks should expect significant deposit transaction migration to self-service channels with desktop and mobile RDC, but not overwhelmingly so. There will remain – for at least a number of years – important customer segments for which RDC solutions won’t appeal.
- On the other hand, retail branches are disturbingly devoted to deposit gathering. USAA’s move will give it quick access to 1,700 locations near its target geographic markets at a small fraction of the cost of traditional branches. Traditional banks that think they don’t compete with USAA need to think again.
- As transactions continue their migration to self-service channels, there will be increasing demands placed upon retail FIs to re-think their branch models. The status quo is no longer sustainable. As transaction volumes leave the branch, so will foot traffic. FIs will have to create new reasons for customers to visit the branch and obtain proportionally higher cross sell ratios just to maintain. At the same time, declining transaction volumes will produce increasing unit costs on the remaining transactions. It’s not a pretty picture.
- USAA obviously isn’t selling in The UPS Stores. Any cross-selling will be for UPS Store products and services, not those of USAA. This isn’t a problem for USAA because it has become adept at selling its wares without face-to-face interaction. Traditional retail banks need to learn this art! For most U.S. financial institutions precious little sales effort exists apart from the branch network. This too is unsustainable.
June 20, 2011 by 1 Comment
In October 2010, USAA announced its partnership with The UPS Store to act as an in-person deposit gathering channel for the bank – something USAA has done without for years and still managed to enjoy a deposit growth rate of roughly three times the industry average. Last week, USAA announced its Easy Deposit service is now available at 1,700 The UPS Store locations. From its start in 1983, the objective of USAA Federal Savings Bank was to leverage the company’s strong brand equity and high customer satisfaction among its insurance, credit, and brokerage customers to build a strong banking franchise. USAA struggled with attracting member checking and savings deposits— for good reason. Without a branch network, USAA relied on mail-in deposits. To facilitate, it has provided free self-addressed stamped envelopes for members. But this approach, with its delayed funds availability and high internal processing cost, was not a competitive proposition. USAA more recently pioneered desktop and mobile RDC solutions for its banking customers as an alternative for mail-in deposits which used to be its mainstay. The solutions have been a huge success. So why this? The obvious answer is that despite the overwhelming success of Deposit@Home and Deposit@Mobile, a significant number of USAA members aren’t opting in. Far from an indictment against remote deposit capture, USAA’s latest move – along with its opening additional full-service retail branch locations in Killeen, TX and Washington, D.C. speaks volumes about the enduring relevance of branch banking in our increasingly multichannel world. Moreover:
June 9, 2011 by Leave a Comment
Multichannel is more than a buzzword, it’s a way of life in retail financial services. With consumers increasingly using a growing array of self-service channels to interact with their financial institutions, many banks are struggling with creating and implementing a vision for their most expensive channel – the branch network. For the majority of FIs, the branch channel is plagued by at least three challenges: 1. Cost control 2. Declining foot traffic 3. Eroding relevance How to address these challenges given today’s capital constraints and multiple other pressing priorities can be vexing. These challenges are going to be discussed in detail on June 16th at the Celent Innovation and Insight Day. I’ll be moderating a panel discussion with the following retail banking executives: • Sandy Dixon | EVP/Group Executive, Operations | Extraco Banks • Andrew Lederer | VP, Business Process Manger | Kennebunk Savings Bank • Deanna Savage | SVP, Branch Operations & Administration | UMB Bank I look forward to seeing you all at Celent Innovation & Insight Day in Atlanta. Readers of this blog are eligible for a discount on their registration fees by using the discount code web_celent.
February 3, 2011 by 3 Comments
Tablet computing is on an obvious growth trajectory, but is this trend something banks should be acting upon, and if so – how? Said another way, led buy Apple’s iPad, will tablets change banking? In the words of Sarah Palin, “You betcha!”. We see tablets contributing to financial services channel delivery both inside the branch network and as a viable self-service channel on its own. Tablets provide distinctive and compelling attributes that, in our opinion, will drive adoption: • Mobility compared to the desktop platform, with the ability to operate usefully in both online and offline environments. • Particularly rich video delivery capability. • A unique form factor making the platform particularly useful for interactivity between staff and bank customers. Several examples of tablet applications may help illustrate. USAA Federal Savings Bank this week launched its iPad application after months of design effort aimed at leveraging iPad’s unique attributes. Like USAA’s internet and mobile channels, the application provides banking, insurance, investments and financial advice in one place. That’s where the similarities end. The tablet application enjoys less latency. Significantly more content is available above the log-in and it’s more intuitively and easily acquired. And, the content is available whether online or offline. See: www.usaa.com. Financial Management Solutions, Inc. (FMSI), a provider of workforce automation solutions aimed at small to midsize financial institutions will be introducing an iPad integration to its Lobby Tracking System (LTS). LTS is a web-based, queuing and reporting tool that tracks key productivity, sales and service indicators. Running LTS on a tablet in addition to desktops will provide FIs new options beyond traditional desk based concierges. Finantix, a Venice Italy based provider of front end sales and service solutions launched its Wealth Apps 2.0, a comprehensive suite of wealth management applications for the Apple iPad last month and plans similar applications for its banking platform sales application in the future. Finantix won Best of Show at Finovate Europe this week with its app. Tablet apps are clearly nascent in retail banking at the moment. Banks should evaluate the use of tablets in future branch initiatives and keep the heat on vendors that are slow to respond. Why? Because tablets will help branches sell more effectively with a reduced training burden. How might this work? Currently most banks rely on branch staff to engage customers as directed by staff-facing CRM systems (or no system at all). Using a tablet interactively with clients reinvents the experience. It holds the promise of a more engaging interaction – one in which branch staff interact alongside clients as coaches. In the process, much paper can be eliminated and workflow efficiency much improved. As a self-service channel, tablets will likely emerge as yet another development opportunity. No one really wanted another delivery channel to manage, but this one looks like it’s a keeper.
September 17, 2010 by 2 Comments