Why the rise of digital banks makes branches more important than ever
June 5, 2022
5 min read

Why the rise of digital banks makes branches more important than ever

There has been much hype about the rise of digital banking and demise of physical branches. But is this the reality? In the USA, bank branches are down just 12% from their 2008 peak1. So, while established banks do face a period of massive digital transition, branches are in fact their greatest differentiator from neobanks. 

The proliferation of connected devices, apps, ecommerce and digital payments was already rapidly transforming banking. However, the global pandemic accelerated and exposed the challenges for traditional financial institutions facing the threat of 100% virtual competitors.

As digital demand continues to rise, and branch usage evolves and reduces, banks are under more urgent pressure to rebalance and optimize their physical and digital workforce to compete.

Balancing the best of both worlds

When up against new pure play digital banks, the physical branches of legacy players provide a major competitive advantage. They leverage the personal relationships, community connection, face-to-face service and brand trust that have long been integral in financial decisions. 

Customer preferences for branch or digital banking will constantly evolve, so it’s important to engage with customers where and how they want. 

But in an environment where online customer service agents are often swamped, while branch staff can be twiddling their thumbs, the burning question is: 

How can banks balance their workforce to deliver the best of both face-to-face and virtual customer experience?

Virtual solutions to real-world challenges

The good news is that for institutions willing to innovate, the latest artificial intelligence (AI), and machine learning (ML) technologies are helping today’s banks optimize and balance customer service across branches and online channels.

Tapping into these new solutions enables you to streamline operational costs, automate scheduling and efficiently manage a disparate workforce to unlock new revenue opportunities and differentiate your services.

While the opportunities are enormous, delivering this outcome at scale requires access to accurate data across the network, and intelligent software and analytics tools to make evidence-based decisions.

How to use artificial intelligence to optimize branch value

Traditionally built on complex legacy platforms with a web of integrations on top, it’s challenging for banks to access real-time data across regions, branches and online systems. 

Manually collating weekly branch reports, teller data and online service activity is slow, inaccurate and difficult to analyze. Data from traditional time and motion studies can also be flawed as they use small samples generalized across all branches, only represent a point in time, ignore seasonal variations and staff behave differently under short-term observation. So, it’s near impossible to get an accurate snapshot across the business, let alone deliver workforce automation.

By taking advantage of the latest AI and ML techniques, combined with in branch cameras and sensors, banks are now anonymously capturing, analyzing and optimizing workforce activity across tellers, concierge and online team members.

Visual dashboards, up-to-date reports and automated schedules arm managers with the tools and information they need to allocate, forecast and optimize staff based on capacity and utilization to cost effectively meet service level promises in branches, online or via voice.

Banks are seeing benefits from branch to boardroom

  • Branch managers are automating and optimizing schedules, rosters and staff utilization to meet customer demand and target service levels – eliminating overstaffing and understaffing.
  • Regional managers are identifying teller and lender latent capacity by region and branches, and measuring staff and customer movements to track KPIs like visits, queues, wait times, interaction counts/duration, customers served per hour and more.
  • Workforce management teams are identifying the opportunity to redeploy underutilized branch staff to digital responses to cut wait times, and define the optimal number of full-time staff and part-time staff.
  • Executives are using visual dashboards to compare and benchmark bank performance, continuously optimize branches while maintaining services, and share best practices across the network.
  • All managers are accessing the insights they need to identify customer service trends or issues by region, branch, day or hour and respond rapidly to maximize NPS scores and feedback.
Research by McKinsey2 found that effective redeployment and reskilling is 20% more cost-effective than hiring and firing.

Trimming costs, rationalizing headcounts and improving customer service are all significant wins, especially when multiplied across many branches. However, even bigger opportunities may come from reinvesting these savings and redeploying capacity into new services and revenue streams. 

By using technology to optimize customer experience – in branch and online – established banks can remain competitive and build a more valuable bank that thrives in the new normal. 

Proven technology and ROI

An ASX-listed Australian company, RocketBoots Beehive applies the power of AI, mathematics, machine learning, cameras, sensors and simulation to provide banks with accurate metrics and analysis to increase service levels and put latent capacity to work through intelligent workforce optimization and scheduling. 

With a rapidly expanding user base, RocketBoots has been deployed at 5 of the 7 largest banks in Australia, with proven return on investment and savings across hundreds of branches. As more branches re-open nationally and globally post-pandemic, growth projections are strong.

If your bank is interested in optimizing operational costs and improving customer service at scale, visit RocketBoots.com to learn more or arrange a demo.

Joel Rappolt

CEO of RocketBoots (ASX:ROC), software that assists with the transition from branch to digital banking by optimizing staff productivity, service levels and property spend.

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