This month I had a couple of long conversations with two reporters, both from well-known publications, who were each working on the same basic story: strategy and staffing changes going on in bank branches.  The conversations brought me back to one of my favorite soapbox topics.

The first reporter, who seemed to have a knack for asking a dozen questions at once, wanted to know I thought that branch transactions would continue to decline.  And, if so, did I expect branch personnel numbers to drop, and did I believe there would be a transformation of the standard “teller” position into more of a sales and service function? And if that were the case, did I think that hiring practices would be affected, as well as compensation plans adjusted, for these individuals? Then he exhaled.

I said, “Uh… yes,” but couldn’t help but add that the “new” issues he was asking about have been dealt with, often well, by some banks for some time now.  These particular “staffing and strategy” challenges are old-hat to folks with in-store banking backgrounds.

Old "new" issues

Neither reporter was very familiar with in-store branches or with how in-store jobs differ from traditional branch positions.  I told them that when I ran my first in-store branch in 1994, the “new issues” they spoke of were already around.

Four-and-a-half FTE (including me) worked in that branch. We stayed open later in the evenings than any bank in town, and on  weekends, as well.  (That was unheard-of in the town we operated in.)  All “tellers” did everything from run teller windows, to discuss and open new accounts, to make PA announcements. They also greeted customers and kissed their babies.

My job included all of that plus playing the roles of loan officer, flier designer, dry erase board creator, barista, and branch janitor. Oh, and I made sure a hundred-plus Winn-Dixie store employees liked us enough to say good things about us to their customers.

My point to the reporters was that many folks in the banking industry already have the kind of mindsets and on-the-ground experience that the retail banking industry is beginning to learn will be vital.  We do indeed have the “small multifunctional team” DNA out there, if people care to learn from it.

Some minds never change

Of course, the list of in-store bank branch critics is long and illustrious.  I’ve had bankers (it’s always bankers, never folks from outside of the industry) chew my ears for years about why they don’t believe in-store branches “work.”  Many of these people formed their opinions years ago, and have never revisited them in light of new facts and results.

Even some good friends who run successful in-store branch programs give me a hard time when I talk-up in-store branches.  They’d prefer that their competitors stay disinterested in competing for future store sites, thanks very much.

The laundry list of objections to in-store branches never changes. People tell me in-store branches (take deep breath) are too small, have too much employee turnover, are not perceived as “real” banks by customers, struggle to sell a full menu of services, don’t gather enough deposits, only gather deposits, can’t make loans, don’t attract small business customers, become overwhelmed with small-business customers . . . and on it goes.

I’ll concede that at some banks, some of these complaints have had some merit over the past two decades. Certain banks don’t belong in this business.  And, sure, some store sites have less potential than others.  How is that different from traditional branches?

Transformation underway

Then again, most people accept that the banking industry has begun an massive transformation toward electronic banking that will pose a major challenges for the traditional bank branch model.

But contemplate the impact the shift will have on in-store branches.  As much of a branch's traditional transaction- and paperwork-intensive tasks get handled electronically, those “too small” in-store branches can actually handle many times the households they once could.  Suddenly, having “only” three or four teller windows doesn’t seem very small at all.

And as fewer and fewer customers even enter a bank branch, banks are losing a precious asset--face-to-face contact with existing and potential customers.  However, there are still as many folks as ever walking into those grocery stores and retailers every week.

The ability to personally interact with and market bank products to thousands of potential customers each week is something more and more banks can only fantasize about. Not so at in-store branches. Plus, banks almost always report increased production levels from their traditional branches in close proximity to their in-store locations.  Well-run in-store branches produce noticeable “billboard” effects for the entire institution.

Regardless of whether a bank is an in-store fan or not, some of the best-prepared folks for the change coming to traditional branch banking are in in-store branches now. Show me a solid in-store branch manager, and I’ll show you someone who understands multi-tasking, managing smaller, cross-trained teams, working long hours, engaging non-bank customers, and marketing on a guerilla level.

Plugged in already

Show me a solid frontline employee in an in-store location and I’ll show you someone who can be plugged in to two or three different jobs at a traditional branch.  “Combining” job duties and wearing multiple hats are nothing new to these folks.

And when you find a strong area manager with experience managing in-stores, you'll find a person who understands what it takes to keep small teams, operating under demanding conditions, motivated about what they do.

Sure, there are some atrociously run in-store locations. I have several friends who enjoy nothing more than pointing them out to me.  My argument, however, is that critics should judge the individual bank and not the channel itself.  I think the channel is making more and more sense as our industry evolves.

As your own staffing and strategies change, you may want to shop for a few smart ideas and some pretty good folks down at those often-misunderstood and maligned “little branches” inside your local grocery stores and retailers.

You’ll likely find some pretty good stuff in-store.

What do you think? Let me know!

/DMM/

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