Banking in the new normal

Three issues to consider as branches & lobbies begin to open in Texas

By Trent Fleming

Although Texas banks, as essential businesses, kept banking access open for citizens throughout the COVID-19 pandemic, many made the decision to voluntarily close lobbies and/or some branches to help “flatten the curve.” As Gov. Greg Abbott begins re-opening Texas in phases and the state’s stay-at-home order expires, many of these banks are safely re-opening their lobbies and branches.

But what will banking in the new normal look like, and what important issues should banks consider as they do their part to protect their customers, employees and communities?

I’ve been considering three particular issues and wanted to share some thoughts with you on each.

What will it look like?

First. what will it look like to “reopen”? Most banks have closed their branches for walk-in traffic, sending all teller activity to the drive-thru and meeting in person only with those customers who need that level of attention during this time. Some of you have also entirely closed selected branches.

I’m always interested in metrics. It’s OK to have feelings about customer behavior and to guess at how your volumes are holding up. But it is better to leverage actual data from your systems to understand what is really going on. This is because limited operations, in conjunction with remote delivery systems, are probably a glimpse into what the future looks like. Not because of any specific threat, like the current one, but because this is how consumer banking is evolving.

Many banks are already successful with appointment scheduling, for example. You’ve probably done some of this to accommodate customers, as mentioned above. But what if this is how customers want to conduct business going forward? Less walk-in traffic and more scheduled ones. I say “great!” because planned appointments allow you to schedule your folks more effectively, while meeting customer demand.

I applaud those of you who offered innovative solutions like curbside pickup and drop off of documents and transactions. Depending on the exact situation in your part of the world, you may stay in this operating environment for several more weeks or you may be considering following your state’s guidelines to begin re-opening your lobbies sooner.

Safety considerations

Let’s talk about what re-opening looks like. Before you announce that your lobbies are again open, consider what you can do to ensure employee and customer safety. Certainly, limiting lobby traffic will be a part of that. While there are varied levels of what “open” means, virtually all of them include maintaining social distancing and limiting crowds to 10 people or less. You will need some employee training on how to man the door and effectively control crowds.

You’ll also want to consider what measures you can and should take to keep everyone safe. As a PR move, you may want to take the temperature of each employee when they arrive to work. Make that practice widely known, and ask anyone who registers a temperature, or otherwise doesn’t feel well, to stay at home. That’s just good advice, any time. But let’s make a stated practice out of it.

Now, the issue of masks. I think there’s a lot of conflicting advice on how effective these are, especially “face coverings” that don’t have medical specifications. I’ll leave that to the experts. I am pretty firm about this: either every employee wears a mask or no one does. The risk of only having selected employees with masks is that someone interprets that they are sick.

Can you take the temperature of customers before you let them in a facility? This is more difficult. Disney says they plan to do that when they reopen their parks. Our children’s summer camp has been doing this for several years. Again, this is kind of a common-sense thing but not everyone will see it that way. You’ll have to consider the number of cases in your area and overall public sentiment to decide what to do.

Many of my clients are already installing Plexiglas shields to prevent transmission of germs at points of customer contact, like new accounts desks and teller windows. I even saw one at a fast food restaurant drive-thru window recently. This will also, I believe, become the norm and I don’t think customers will have trouble acclimating to them.

Regardless of these measures, continue maintaining a clean environment. Access to cleaning wipes, hand sanitizer and gloves will continue to be important for the foreseeable future. Ask your janitorial company about enhanced cleaning measures, including fogging with disinfectant, and make sure you publicize these measures to let customers and employees know how serious you are about their safety.

Before we leave this subject, a word about branch opening/re-opening. If you closed selected branches, what were the key decision factors? Are those long-term issues and, if so, can you get along without that branch going forward? Such events are a good time to consider those matters.

Your customers — business and consumer — are overwhelmingly choosing electronic delivery channels. This will eventually have a significant impact on the number and configuration of your physical locations. The sooner you begin addressing this, the more smoothly you can implement any needed changes. Start this discussion today. For branches you kept open, is a return to full inside service warranted or can the drive-thru and appointment environment meet the needs of your customers?

Lessons learned

Second, I want to talk about what we are learning from distributed work. There are important lessons here that can make you a more productive and profitable organization over the long run. Put together a small team to start capturing pros and cons of the current environment. Think about what has worked well, and what has not.

There are certainly challenges to address, ranging from the quality of internet access employees have, to the strength and resiliency of your network in supporting remote workers. Some tasks can easily be done at home, while others require office presence, and those have to be clearly identified.

Many banks find themselves outgrowing office space. If you find that selected employees work as well — or better — from home, this is one way to address that problem. You employ a wide range of individuals. Some require close supervision, others do not. Effective management will assess employee skills and abilities and assign duties accordingly.

In addition, it must be said that you should be evaluating your overall workforce requirements. It may be that you simply have too many employees. Situations like the one we are in will often make that more visible to you. Your ability to grow without a corresponding increase in head count is critical to your long-term success.

What are you learning about effective meetings? Have your virtual meetings been shorter or longer than normal and more or less decisive? Has the use of video enhanced or hindered your meetings? Again, don’t make this just about crisis situations; consider what you have learned that may be applied to the long term.

For example, I think we have proven that loan committee meetings can be done by video, saving your remote employees the travel time to and from those meetings, every time.

Digital platform implications

Third, and finally, let’s consider the digital platform implications. A lot of community banks have resisted online account opening, online lending applications and, yes, even remote deposit.

Once the crisis hit, many were rethinking this. Implementation lead times are long enough that you just couldn’t get such systems installed in time to help.

The lesson is this: You must stay ahead of the technology curve in order to anticipate and meet customer needs. Institutions that already had these systems in place have seen customer adoption go up. In my opinion, that will likely continue, at least at 50% of the increase you saw.

We are apparently making some headway in converting some of your “holdouts” to the digital solutions. This will pay long-term benefits. Each time a customer successfully uses a self-service option, you save money and they become more loyal to you because of the ease of use.

We did experience a day or two of industry-wide diminished service because no one anticipated that customers would make such a large number of inquiries about their stimulus payments. Vendors quickly worked to shift resources to inquiry systems to improve their performance.

But we learned that such systems are not as resilient as they need to be. Be sure to prod your vendor to continue investing in scalable solutions that will meet periodic high demand in light of growing use.

Start now to assess any gaps in your digital offerings and begin the process of selecting those missing components and getting them installed. Customers are more willing than ever to use your remote channels; make sure you have them available and promote them well once installed.

At a minimum, online account opening, online loan applications, remote deposit and contactless payment technologies are critical. You will no doubt think of others, but let’s get started. Higher customer satisfaction and lower costs await!

These are just a few thoughts. Remember to keep an eye out for fraud, work to ensure that employees are properly trained and educated for any operational changes you implement and remember to communicate well to employees, customers and the media. The basics never change, do they?

For more than 35 years, Trent Fleming has helped community banks make good decisions. As a speaker, teacher, author and consultant, he works with banks on matters of technology and strategy. [email protected]