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THE ONLY ALL-BUSINESS RESOURCE FOR BANKS AND CREDIT UNION BRANCHES
T H E B R A N C H T E C H N O L O G Y I S S U EMAY 2018 | VOLUME 1 | ISSUE 5
Branch Robots and the Hype of Tomorrow Can Hold You Back!CHAD DAVISFEATURED BRANCH
UWCU’S NEW BERLIN, WI.
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
MAY 2018 | VOLUME 1 | ISSUE 5TABLE OF CONTENTS
5
7 EDITORS POV Title here and here Tim O’Hara
8 STAFFING Q&A Staffing Challenge Hiring for today’s branch staff Jim Romeo
12 IN-BRANCH PRODUCT SALES Becoming a Great Sales Coach Nick Brown
16 BRANCH STRATEGIES Branch Robots and the Hype of Tomorrow Can Hold You Back! Chad Davis
19 BRANCH BUSINESS Indirect Auto Lending Best Practices
Kaitlin Morrison
THE ONLY ALL-BUSINESS RESOURCE FOR BANKS AND CREDIT UNION BRANCHES
22 OPINION Why Bank of America’s Fee Hike is Bad for Communities, Consumers and the Economy Gabe Krajicek
26 BRAND TECHNOLOGY Network Visibility A conversation with Jay Botelho of Savvius Jim Romeo
28 BRAND INITIATIVES “Member Banking Is Better Banking®” Captures The Theme Of Brand Initiative Randi Marmer
32 BRANCH BUSINESS Virtual Tellers Two Managers Tell Us How They Keep Branches Personal Kaitlin Morrison
35 BRANCH BUSINESS Modernizing the Branch Experience Starts with Core Murthy Veeraghanta
38 BRAND TECHNOLOGY Alexa, How Much Is in My Checking Account? Jim Romeo
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
6
ABOUT US
SUBSCRIPTIONSBRANCH BUSINESS is published monthly
(12 issues per year) by The Banking BUSINESS
Network, LLC. A one-year Digital membership is
$75/yr. An online membership form is available at
www.cubusiness.com/register.
TEAMBUILDERhttps://creditunionbusiness.com/the-team-builder/
SALES AND ADVERTISINGTim O’Hara, Publisher
[email protected] or 561-282-6015 #1
CONTACT INFORMATION Credit Union BUSINESS Magazine
P.O. Box 2223, Palm Beach, FL 33480
(561) 282-6015 | (561) 588-7711 (fax)
THE ONLY ALL-BUSINESS RESOURCE FOR BANKS AND CREDIT UNION BRANCHES
T H E B R A N C H T E C H N O L O G Y I S S U EMAY 2018 | VOLUME 1 | ISSUE 5
Branch Robots and the Hype of Tomorrow Can Hold You Back!CHAD DAVISFEATURED BRANCH
UWCU’S NEW BERLIN, WI.
PUBLISHING TEAMTim O’Hara, Publisher
Kaitlin Morrison, Editorial Director
Ashok Kumar, Associate Publisher
Patti Manzone, Designer
BRANCH BUSINESS TEAM
Nick Brown
Chad Davis
Gabe Krajicek
Randi Marmer
Kaitlin Morrison
Jim Romeo
Murthy Veeraghanta
THE ONLY ALL-BUSINESS RESOURCE FOR BANKS AND CREDIT UNION BRANCHES
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
7
TABBY TIM O’HARA
86,000+ New Eyes on Branch BUSINESS Since January!
POV
S ince we launched Branch BUSINESS eMagazine in January, we’ve had an incredibly positive reaction from our fast-growing readership. In fact, 42,198 branch managers and 1,226 branch
supervisors from banks and credit unions in all parts of the USA have been added to our readership list since Vol. 1 Number 1 was published just five months ago. In spite of reading many doom and gloom predictions that the branch is dead, there is plenty of evidence that branches are thriving! The cover graphic of this issue is a photograph of a newly constructed branch of the University of Wisconsin Credit Union’s (UWCU) 25th full service branch in New Berlin, near Milwaukee. And, to prove this point, we’ll endeavor to put a new branch on each cover of Branch BUSINESS in the future. The good old Questions and Answers (Q&A format) is an excellent way to extract good information from experts on branch management, and we’ll also feature a new monthly Q&A column for Branch BUSINESS in every issue. Beginning on the next page is a Q&A interview about the all-important topic of branch staffing. Veteran freelance writer Jim Romeo, who worked with me a dozen years ago, returns to interview Eileen Nolan, EVP of Nassau Educators Federal Credit Union (NEFCU), on Long Island, NY. NEFCU is a nearly $3 billion (assets) financial institution with 15 branches, four of them coming online this year.
Just in the nick of time (pun) is our sales training expert, Nick Brown, one of the busiest guys in branch training, specializing in the all-important sales function. I’ve noticed a growing trend of branch manager titles putting a new emphasis on “sales manager”(see Rosemar Augular on page two). In this issue, Nick outlines four areas to improve your sales coaching. Beginning on page 16, Chad Davis lays the groundwork for mixing the branch latest technology with the human touch. Branch operations will not soon be taken over by machines, but will require a balance of the two. I’ve noticed that this issue is a little top-heavy with credit union branch reporting, but as we prepare to launch our third publication this summer, Bank BUSINESS, with its’ emphasis on community banking operations, the editorial here will be more evenly split between the two types of financial institutions, but the information published here is always the best for the BUSINESS of running a successful BRANCH! Finally, a reminder that we’re always on the lookout for good story ideas about how to make branch operations more successful, and if you have any suggestions for me, please contact me directly. [email protected] or, call me at 561-282-6016. I look forward to hearing from you.
Thanks for reading!
Tim
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
BY JIM ROMEO
Staffing Challenge Hiring for today’s branch staff A conversation with Eileen Nolan, EVP, Chief Marketing and Sales Officer for NEFCU Credit Union
STAFFING Q&A
8
F or branch managers, the human element
and human capital are some of the greatest
assets in successfully running a branch and
serving its members and customers. Any
branch manager faces many challenges in
finding the right staff for the right positions.
Eileen A. Nolan is the EVP Chief Marketing and Sales Officer for NEFCU Credit Union in Westbury, New York. We spoke to Eileen to gain insight into the
challenges of staffing credit union branches. Here’s how our conversation went.
Branch Business: From your perspective, how great is
the challenge of staffing and hiring for today’s branch staff?
Eileen Nolan: While our salaries are in line with
the competition, it can be challenging to match the
competencies needed for phone and branch service
positions. The current low level of unemployment is
also a factor as there are many employers competing
for qualified candidates. However, our salaries are competitive and we have the unique added value of
providing both a pension and 401K program. One of
the ways we look to differentiate as an employer is to
ensure that our branch positions provide opportunities
for cross-training and career growth so that we
retain the talent we hire. We look at aspects such as
a competitive tuition reimbursement programs and
employer of choice initiatives as a means by which
we support and retain our employees. One of the most
demanding aspects of our hiring process is our strong
expectation that candidates exude confidence in having conversations with our members about products and
services and possess a level of active listening and
verbal communication skills that represent our brand.
We significantly invest in training and ongoing coaching milestones to ensure that our new hires are
supported in ensuring expectations are met.
Branch Business: What are some of the hardest
positions to fill and why do you feel they are difficult to fill?
Eileen A. Nolan, EVP Chief Marketing and Sales Officer for NEFCU Credit Union
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B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
10
STAFFING Q&A
Eileen Nolan: Branch management openings are
difficult to fill, mainly due to salary competition from commercial banks and also due to finding candidates with the service mindset that is core to our culture.
Additionally, we look to our branch managers to be
effective advocates of the community with considerable
followings, networking strengths and leadership skills.
Our products and services are highly-competitive
and we look to our branch managers to be able to
communicate this effectively as well as help others do
similarly. Our managers are role models of service and
expertise, particularly in understanding how the credit
union business model, a model that is not beholden
to shareholder dividends, is directly correlated to our
ability to serve and deliver value.
Branch Business: What advice could you share with
regard to hiring and staffing your branch and branches?
Eileen Nolan: Work history and performance are
certainly important, but we also very strongly seek
and hire attitude, enthusiasm and willingness to
learn and develop. It’s easier to train someone in the responsibilities of a position, but harder to change a
person’s attitude toward serving others.
Branch Business: What does the future look like for
branch staffing in the next 3-5 years?
Eileen Nolan: Given the emergence of online and
mobile technologies, we remain deeply committed
to branch distribution and, in fact, are growing and
investing in our branch distribution channel. This year,
we opened a new branch in Oceanside with branches
in Uniondale, Northport, Huntington Village and potentially Freeport being completed by the end of this
year. We are in the process of actively doubling our
branch footprint to serve even more LI communities.
We respect and foster a branch environment that affords
opportunity to develop relationships with members
and their bankers and believe that branches are vital.
We support that there is a strong intersect between the
continuing expanse of our branch delivery channel
and our continuing investment in the technology that
drives efficiency, i.e. providing more opportunities for our members to choose their channel for service.
Branch Business: Anything else you’d like to provide that the above has not given you the opportunity to
express?
Eileen Nolan: We continue to be committed to Long
Island and being an employer of choice here. We
have made the decision to centralize our call center
and ITM teller operation here, with strong plans for
continuing growth. Many other competitors outsource
these jobs elsewhere off Long Island. Our state-of-
the art member contact center, located just over a
mile from our Westbury HQ, is replete with training centers, conference rooms, plasma screens, employee
lunchrooms and lounges, charging bars, etc.Branch
management openings are difficult to fill, mainly due to salary competition from commercial banks and also
due to finding candidates with the service mindset that is core to our culture. Additionally, we look to our branch
managers to be effective advocates of the community
with considerable followings, networking strengths and
leadership skills. Our products and services are highly-
competitive and we look to our branch managers to be
able to communicate this effectively as well as help
others do similarly. Our managers are role models of
service and expertise, particularly in understanding
how the credit union business model, a model that
is not beholden to shareholder dividends, is directly
correlated to our ability to serve and deliver value.
Branch Business: What advice could you share with
regard to hiring and staffing your branch and branches?
Eileen Nolan: Work history and performance are
certainly important, but we also very strongly seek
and hire attitude, enthusiasm and willingness to
learn and develop. It’s easier to train someone in the
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
11
responsibilities of a position, but harder to change a
person’s attitude toward serving others.
Branch Business: What does the future look like for
branch staffing in the next 3-5 years?
Eileen Nolan: Given the emergence of online and
mobile technologies, we remain deeply committed
to branch distribution and, in fact, are growing and
investing in our branch distribution channel. This year,
we opened a new branch in Oceanside with branches
in Uniondale, Northport, Huntington Village and potentially Freeport being completed by the end of this
year. We are in the process of actively doubling our
branch footprint to serve even more LI communities.
We respect and foster a branch environment that affords
opportunity to develop relationships with members
and their bankers and believe that branches are vital.
We support that there is a strong intersect between the
continuing expanse of our branch delivery channel
and our continuing investment in the technology that
drives efficiency, i.e. providing more opportunities for our members to choose their channel for service.
Branch Business: Anything else you’d like to provide that the above has not given you the opportunity to
express?
Eileen Nolan: We continue to be committed to Long
Island and being an employer of choice here. We
have made the decision to centralize our call center
and ITM teller operation here, with strong plans for
continuing growth. Many other competitors outsource
these jobs elsewhere off Long Island. Our state-of-
the art member contact center, located just over a
mile from our Westbury HQ, is replete with training centers, conference rooms, plasma screens, employee
lunchrooms and lounges, charging bars, etc.
Jim Romeo (www.JimRomeo.net) writes about business and technology topics.
STAFFING Q&A
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
12
BY NICK BROWN
Becoming a Great Sales Coach
IN-BRANCH PRODUCT SALES
W ho is the best coach you have ever
had? For me, it was Hal, my little league soccer coach. He taught me how to play the game and how to
love it. But more importantly, Hal built my confidence and helped me realize my fullest potential as a little league soccer player.
Great coaches are amazing influences in our lives; which is why you were likely able to think of
someone quickly. They teach and inspire. They help
us to achieve what we believe is unachievable. Behind
every great sports athlete there is a great coach. Unless
of course, you are LeBron James. The same applies
to every credit union sales rep. For sales to thrive at
your credit union and on your credit union teams, there
must be competent sales leadership and consistent
sales coaching.
So how do you become a successful sales coach?
Here are 4 areas you can improve.
#1 Sales Coaches Must Have ExperienceA 2016 article published by ABCNews.com titled,
“Ranking all 129 college (football) coaches… as
players”, illustrates that every Division 1 head football
coach played the game at least at high school level. All
but 7 played at the college level. The same holds true
for professional sports such as Major League Baseball,
the NBA and the NHL. This is not just a coincidence and it isn’t unique to just the sports world. head football coach played the game at least at high school level. All
but 7 played at the college level. The same holds true
for professional sports such as Major League Baseball,
the NBA and the NHL. This is not just a coincidence and it isn’t unique to just the sports world.
Many of the best coaches, those who help others to
achieve exceptional success in any given area, were at
one-time players in their respective industry or craft. In
order to be a successful coach, you must have a passion
for what you are coaching. You must have a foundation
to build upon, and you must be able to relate to those
you are coaching.
To develop into a successful coach, you need to
walk the walk and talk the talk. You must understand
how to sell and have success doing it. If you find yourself in a leadership role over a sales team but have
limited sales experience, one of the first things you need is sales experience. But don’t worry, you do not have to become an elite salesperson.
The article points out that of the one hundred and
twenty nine D1 Head Football Coaches, less than ten percent played at the professional level. The message
here is that a coach doesn’t need to have been an elite contributor to become a great coach. But elite coaches
were once players.
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
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IN-BRANCH PRODUCT SALES
#2 Sales Coaches Must Make TimeCoaching is not only an investment of experience in
others, but an investment of time. I often hear sales
leaders tell me that they simply don’t have time to sit with their teams and provide coaching on a consistent
basis. However, when we sit down and look at where their time is being invested, we often find a number of time consuming tasks which can be eliminated or
delegated.
As a leader of a sales team, a top priority,
perhaps the top, is to coach and develop staff. With
this perspective, it is easy to see that allowing your
schedule to be dictated by the next fire that needs to be put out, or solving other people problems, or a full
email box is simply not effective. As a leader you can
start making time by resisting the urge to respond to
the lower priority tasks which always seem to make the
loudest noise.
Next, as a manager and leader you should not be an
iatrical part of the day to day operations of your team.
When you are fulfilling operational activities such as monitoring phone calls, balancing the value and ATM,
making schedules, and so forth, you are consuming
time which should be spent coaching. Additionally,
you are depriving your team the opportunity to take on
responsibilities and develop into leaders themselves.
To make more time for coaching your team, assess
your day to day functions and delegate as much as
possible.
Ideally, a sales leader will make time every day
for coaching. This would look like official coaching sessions such as one-on-ones, shadow coaching,
and follow-up meetings. In addition, it’s important for leaders to take time to prepare for coaching and
training opportunities. Because coaching is a top
priority for sales leaders, enough time should be made
to effectively lead the team.
#3 Sales Coaches Must ListenImagine a coach who never shows up for games. She
justifies this by saying she can simply look at the stats and the final score of the game and know exactly where the team needs improvement. If this situation truly
existed, how effective do you think her coaching will
be? How will her coaching be received by the team? It’s hard to even imagine someone coaching a sports team like this, yet it happens all the time on sales teams.
For many sales leaders the preferred method of
coaching is performance based. This means the coach
will look at their team’s numbers, including the sales in process, and then discuss what needs to be done to
correct those numbers. While performance metrics are
effective for holding salespeople accountable and to
get a high-level view, they do not tell the whole story.
The majority of sales coaching should be development
based. This kind of coaching can only be done after
observing employees’ sales conversations with members. Listening is also key. Great sales coaches
will follow-up to review what they have observed with
their team. Rather than jumping in to correct and teach,
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
14
IN-BRANCH PRODUCT SALES
they will ask questions to learn what the salesperson
was thinking and feeling during the member interaction.
After having observed their employee apply what
they have learned in real interactions with members,
and having asked questions to learn more, the coach is
prepared to begin offering guidance.
#4 Sales Coaches Must Be TrainersLikely, when thinking about an amazing coach in your
life, you thought of someone who empowered you to
become better than you thought was possible. Coaches
lift us up and see in us that we don’t see in ourselves. In my credit union career, I had two different sales
experiences. My first experience was as a branch employee. I started as a part time teller. I worked at a
busy branch. The two most important directives were to
move members through the line and be sure to balance
at the end of the day. You can probably guess where
my managers invested the bulk of their coaching time.
Don’t get me wrong, accuracy and speed are important. However, in a short period time I had mastered both, yet there never seemed to be time for sales coaching.
My second experience happened 3 years later in the
credit union’s newly formed outbound call center. I applied for the position and came to the interview with
a great attitude and optimism that I could become a
great salesman. The hiring managers must have seen
something promising in me that lead them to believe
I would be great because they hired me on the spot.
I remember walking out of the interview wondering
what I had just done.
From day one my manager took responsibility for
my development. He taught me the basics of selling and gave me the information I needed so I wouldn’t crash and burn on my first call. Then he handed me the phone and told me to make my very first sales call ever. To say the least, I was a bundle of nervous energy. I
remember he looked at me and said “Nick, I believe
in you. You are going to do just fine.” I made the call and I made the sale.
With continued coaching from my manager, I learned
to overcome objections, sell a wide range of products
and services, and even recapture mortgages, of which
I was quite leery. Within a few months I was a top
producing agent amongst others who had much more
experience than I. This happened because I was
trained, not just on operation, not just on processes and
regulations, but continually on sales.
Hal probably doesn’t understand how much of an impact he made in my life. His coaching and belief in me, the time he spent with our team at practice and
games, and his interest as me as an individual inspired
me to be a better soccer player. One day after practice,
I remember Hal talking with my Mom about tryouts for a competition league. I asked, “What is competition
league?”. I don’t remember his exact words, but he turned to me and said something like this, “It’s the next level, and it’s time”. As a sales leader you have the opportunity to coach
your team up to that next level, whatever it may be.
Just don’t be upset when the time comes for them to move up.
http://abcnews.go.com/Sports/ranking-129-college-coaches-players/story?id=37518988
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
15
IN-BRANCH PRODUCT SALES
Nick Brown Consulting, established and founded by Nick Brown in 2015, is a credit union–specific sales training group dedicated to bringing a proactive sales approach to every credit union. Nick Brown Consulting accomplishes this aim by providing sales consulting and training to enhance branch sales, outbound sales and lending center sales. With an emphasis on lending and cross-sales, Nick’s goal is empowering credit unions to add value in the life of every member in every interaction. Engage Nick Brown directly at 801-860-5807 or [email protected]. Ask about his credit union–specific workshops and online sales training, featured at www.nickbrownconsulting.com.
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
16
BY CHAD DAVIS
Branch Robots and the Hype ofTomorrow Can Hold You Back! The raised concerns over a possible downturn in jobs, caused by robots taking jobs in the branch, has thus far proven to be more hype than reality. Empty clickbait headlines are the only thing real about tellers being replaced by robots anytime soon. Instead, people—not machines—dominate frontline and back-office functions of credit unions.
BRANCH STRATEGIES
M any great advancements, available
today, serve not as a replacement
for the human component, but as an
enhancement. These innovations are
highlighted in a new white paper
from Kronos, titled, Robots vs. Reality: Innovative
Technology for Today, Not Tomorrow.
Combining people and technologyIt’s true that robotic and intelligent process automation (IPA) is a rapidly advancing field, but relatively few financial institutions have ventured into this form of technology thus far. According to a recent PwC
Financial Services IPA survey, only 9 percent of
respondents reported having IPA bots in production.
Some firms encountered unexpected risk and control issues that have tempered adoption of this technology.
Quelling concerns about industry job loss is the growing realization that financial institutions need not choose between embracing technology and supporting
their workforce. As the white paper points out, the
organizations that are likely to do best in the financial services industry are those that successfully combine
people and technology. The competitive advantage
goes to those companies that use their technological
strengths to empower their people by leveraging
technology to optimize their workforce, improve the
customer experience, and ultimately boost their bottom
line.
Committing to breakthrough advancementsMaking the financial commitment for breakthrough technologies can be difficult, given how rapidly the tech world advances. It’s like trying to jump on a fast-moving train. Some financial institutions may be tempted to wait for “the next big thing,” but that
hesitation imposes an inherent risk in falling behind
competitors that have caught the train and are
integrating advanced solutions into their organizations
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
17
BRANCH STRATEGIES
today. Forward-thinking companies figure out how to integrate digital innovations into their physical
channels as a way to enhance the customer experience,
deploying cutting-edge technologies that allow them to
gain competitive advantage in their markets.
Financial institutions looking to upgrade their
technology should begin by creating a flexible information technology platform. This will help
them shrink development and integration cycles
when implementing new applications or onboarding
third-party services. A flexible platform enhances the ability to integrate core business systems with an
ever-expanding digital ecosystem using a convenient
software-as-a-service (SaaS) model.
Using open application programming interfaces
(APIs) allows credit unions to keep pace with the
latest innovations in their quest to create new revenue
streams and take on the role of disruptor. A robust
API and integration platform offers virtually unlimited
extensibility while also simplifying integration.
Growing capabilitiesOther up-and-coming technologies hold the promise
to enhance efficiencies and customer service. Artificial intelligence (AI), coupled with machine learning,
will likely become more important in relatively short
order. More than half of those responding to PwC’s 2017 Digital IQ Survey report that they are making substantial investments in AI, and nearly two-thirds
said they will be doing so in the next three years.
AI includes such capabilities as advanced
forecasting, proactive labor compliance solutions,
and personal digital consultants to help frontline
managers work smarter and more efficiently. One bit of good news about AI, in comparison to robotics, is
that financial service employees don’t feel particularly threatened by it. According to a 2018 Coleman Parkes
Research, Automation and New Technology Study
conducted on behalf of Kronos, about two-thirds of
respondents view AI as a means to simplify processes
and ease their workload.
Any discussion of leading-edge technologies must
encompass the continuing need for state-of-the-art
mobile solutions, which are a big factor for today’s on-the-go workforce. Younger workers are especially
likely to choose their employers based on the quality
and quantity of the mobile tools they offer.
Consumers are likewise on the go, so financial institutions need to deliver personalized services
promptly and efficiently. For example, next-generation appointment-setting solutions enable customers to
book appointments in a matter of seconds, using
geolocation technology right from their smartphones,
tablets, or computers.
Another major technological innovation is the
use of advanced analytics to guide strategic decisions.
Implementing an advanced analytics strategy involves
collecting and crunching data and using the resulting
insights to build business processes that allow
organizations to improve their operations, enhance
productivity, accelerate growth, and improve risk
control.
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
18
BRANCH STRATEGIES
Getting beyond the hypeAdvanced technologies in the financial services sector are making a difference today, even as the hype swirls
about robots, quantum hardware, and the Internet of
Things. These concepts have yet to hit the mainstream,
and it could be years before they reach their full
potential. In the meantime, savvy credit unions would
do well to focus their technology dollars on solutions
that are already delivering results. Empowering
managers and employees with flexibility, convenience, and guided decision making, these commercially
available solutions can help businesses stay ahead of
the competition.
Chad Davis is senior industry marketing manager, Financial Services Practice Group, Kronos, which is a leading provider
of workforce management and human capital management cloud solutions. Kronos’s industry-centric workforce applications are purpose-built for financial institutions of all sizes. Chad can be reached at [email protected].
B R A N C H B U S I N E S S | M A Y 2 0 1 8 | C U B U S I N E S S . C O M
BY KAITLIN MORRISON
Indirect Auto Lending Best Practices One credit union has found prosperity in auto lending by keeping its members informed and engaged. Discover what this CU’s Top 3 best practices are and how to apply these secrets to success to your indirect lending program at both the corporate and branch level.
BRANCHBUSINESS
19
At the start of 2017, we talked about
automotive lending and shared some ideas
for creating an effective indirect lending
program.
For this issue, we spoke with two
leaders at Greater Nevada Credit Union about their
auto loan program and how they serve their members
by helping them get the financing they need. This credit union emphasizes financial education right at the start and keeps members informed and
engaged so they do not feel lost during the process.
Greater Nevada shared their best practices with
us and we have three great takeaways from our
conversation. From there, we will talk more about
branch best practices, including compliance and
training issues at the branch.
Best Practice #1: Reassure your members and avoid
making assumptions. The start of every lending
conversation is your opportunity to encourage your
members, begin arming them with knowledge and help
them feel confident. Your members should “not be frightened of the process. Ask for clarification on anything that you don’t fully understand – there are no dumb questions!” says Tom Wambaugh, VP of Member Services at Greater Nevada Credit Union.
If your member needs a little reassurance, that is
okay. Remember, not everyone has the same level of
experience with auto buying. A big part of the loan
consultant’s job starts with finding out where the buyeris in terms of his or her loan and financial knowledge.
Not everyone needs a detailed play-by-play of the
lending process, but some of your members are also
beginning with very little or no loan know-how at all.
This is the moment for your consultant to triage the
member’s experience and research level. Wambaugh suggests that loan consultants
prep for every new loan conversation by avoiding
assumptions about the buyer. Each member is bringing
a different level of experience, confidence and financial preparedness.
Tom Wambaugh, VPof Member Services atGreater Nevada CreditUnion
4 BRANCHBUSINESS
TURN ON YOUR BRANCH SUPERVISORS & MANAGERSwithTEAMBUILDER.
www.cubusiness.com/teambuilder/buy
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Best Practice #2: Bring the right education to every
loan conversation. After pre-approval, your member’s financial picture will guide the way through the education, budgeting and shopping steps.
“Having your financing in order prior to shopping for your next vehicle eliminates some anxiety and lets
you focus on making sure you make a great vehicle
choice,” Wambaugh adds.
By having every member get pre-approval at the
start, Greater Nevada is able to identify members who
may want or need additional help before they make
the purchase. The credit union’s member consultants know which financial education programs to suggest and how to help applicants who do not feel ready for a
loan right now. From there, members can get a personal
plan to shape up their finances for a loan or to prep for better loan options in the future if they are looking
for lower rates than what they currently qualify for.
Maybe a loan is not right for the moment, but that does
not necessarily mean applicants are far away from the
right car.
Best Practice #3: You don’t have to choose between member service and following metrics. Your success
requires that members get the service they need and
that your lending program remains viable. Embrace the
challenge and hold these two benchmarks in tension.
If your program is working, your members will
get the services they need and buy the cars they are
looking for. Along the way, your credit union also
needs to promote the long-term viability of your auto
lending program.
“Auto lending success can be defined by market share, portfolio performance and member-to-loan
ratios. Ultimately, a successful program should
provide our members with flexible loan options that are priced competitively,” says Marcus Wertz, VP of consumer lending at Greater Nevada Credit Union.
Using performance benchmarks is not inconsistent with
member service. Your members need a competitive
program that will be around whenever they need a
loan. Keeping the program strong requires solid, stable
planning along the way.
Applying Best Practices to Your Indirect LendingProgram – at the BranchConsumers are increasingly turning to credit unions for
financing. According to the Federal Reserve’s March 2017 report on consumer credit, credit unions have
seen several years of fairly consistent consumer credit
growth.¹ How your credit union manages and guides this growth is important. Effective staff training, strong
relationships with dealers and effective benchmarks to
help you navigate market changes are particularly key.
Working closely with the dealerships, develop contracts
that protect your organization and your members.
Know how to grow these dealer partnerships over time
and protect your lending program by managing risk
and compliance issues.
At the branch level, there are specific steps you can take to advance these goals. In addition to Greater
Nevada’s insights on auto lending, consider how yourbranch is doing in each of these areas:
Preventing Fraud – At the branch level, all staff should
know your credit union’s policies and consistently apply them. Data should be secured appropriately and
access to information should be restricted. This is a vital
part of your organization’s due diligence in protecting your lending program. Any potential source of fraud
should be watched carefully and your organization
should take steps to safeguard itself.
Staffing Levels – Your program needs enough staff
to reasonably divide the loan responsibilities if your
lending is done in-house. No one person should be
responsible for every aspect of the program. This
division of duties may help reduce your liability and
ensure that your policies are appropriately applied.
Fair Lending – Even if your credit union applies fair
lending policies very carefully as a whole, every person
at every branch should know where your organization
stands on these issues. This is a very important area
for lending. Discrimination against borrowers for
protected characteristics is inappropriate and may
jeopardize your entire loan program.
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Branch-level associates are a strong asset to auto
lending, so make sure they regularly review your
policies and understand their roles. Compliance issues
may occur at any point in the lending process without
appropriate policies, guidance and planning. Your
branch may need a self-audit to identify weak areas
and to look for ways to improve.
Prepare for Responsible GrowthAs you train employees, build your auto lending
program and educate your members, be prepared
to manage this next phase of growth carefully. Best
practices may help as you carefully plan how your
branches will help you serve your members better.
Balancing the right metrics, watching compliance
issues and conducting audits of your lending programs
may help you keep these loans available without
sacrificing competitive rates. However you manage your lending, strong communication with branch employees and thorough
training will help them provide members with the right
information and options. Loan consultants, whether
or not they are at the local branch, must know what
resources to offer members and how to provide the right
financial education. Branch managers have a significant role to play in this process and can demonstrate best
practices to their teams. If a particular practice is a
struggle for their branch, they can also reach out to
upper management for guidance and suggestions.
Your organization and your members rely on every
aspect of your lending program. Consistency and care
will help your leaders and team members find their next goals and appropriately follow them. At every
stage of the process, your willingness to reconsider
your choices and watch your environment will helpyou
stay prepared for new opportunities.
In addition to covering Branch BUSINESS for CU Business, Kaitlin is a freelance business writer based in Central Washington State. She is passionate about educating her readers and is a proud credit union member and supporter of credit unions. You can read more of her writing at www.kaitlinmorrison.com
Sources:1. https://www.federalreserve.gov/releases/g19/current/2. https://www.ncua.gov/Resources/Documents/LCU2010-15.pdf3. https://www.cues.org/article/view/id/Loan-zone-indirect%E2%80%93lending
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OPINION
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BY GABE KRAJICEK
Why Bank of America’s Fee Hike is Bad for Communities, Consumers and the Economy
B ank of America’s recent decision to slap a $12 monthly fee on all accounts with
less than a $1,500 balance is an insult to
consumers across the nation. The charge
applies to customers with an “eBanking”
account, which up until recently, was free for anyone
who didn’t receive paper statements or use bank tellers. Bank of America has now phased out eBanking
and transferred all its customers to “core checking
accounts” that require them to contribute a direct
deposit of at least $250 a month ($3,000 a year) or keep
a minimum daily balance of at least $1,500 to avoid the
$12 fee.
This greed-driven tactic attacks some of the hardest
working and most vulnerable people in the country.
In fact, a new survey suggests that nearly 70 percent
of Americans maintain an average checking balance
of less than $1,000. Making this decision even more
insulting is the fact that Bank of America is upping
fees after having recorded a record-high profit of $5.6 billion last year.
But it’s not just Bank of America. Over the past seven years, we have seen megabanks make
irresponsible lending decisions, get bailed out by
the government, and then turn around and charge
consumers more for services and products. As her
last parting shot, Janet Yellen, the exiting chair of the
Federal Reserve board of governors, basically said that
the actions being witnessed at Wells Fargo indicate
that there is such top-down lack of management
oversight that in order to protect consumers, the Fed
needed to force Wells Fargo to restructure its top-level
leadership. But interestingly, the megabanks are so
strong that even the Fed Chair didn’t challenge them while still a sitting member of the committee.
So it’s not just BofA; it’s not just Wells Fargo. Megabanks do not put consumers first. They are not committed to the communities they serve. They are not
committed to the customers that bank with them. They
are only committed to the stock price and the profit needed to drive it higher. Now I’m not saying that profit is bad, but banking is a trust-based business first. There has to be a balance between profit and good ethics…especially since the five biggest financial institutions currently hold 44% of all the industry assets in the
United States according to recent data.
There is a dire need to put a stop to the bad behavior
of megabanks now, as it severely impacts consumers
and the communities they live in. Unlike megabanks,
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OPINION
community banks and credit unions are committed
to their communities, and Bank of America’s blatant disregard for consumer well-being has made this the
perfect time to highlight the stark contrast between
the consumer-friendly policies of credit unions and
community banks compared to the predatory practices
of the big banks.
Here are just a handful of advantages:First, community banking is an investment in that
community. Studies show that small banks actually
make up 54 percent of small business lending. And as
we all know, small businesses are critical to driving
innovation, creating thriving local economies and
significantly reducing wealth inequality. Second, consumers get better service, plain and
simple. Sixty-four percent of people surveyed in the
Consumer Banking Insights Study believe community
banks and credit unions provide better personal service
in any kind of interaction — be it face-to-face, over the
phone, or online — than big national banks.
Last, consumers are more likely to get rewarded for
their business rather than penalized, as in the case
with Bank of America or any other megabank. Let’s face it, this concept is just too consumer-friendly for
megabanks’ taste. In general, community banks offer lower fees than big banks, with 63 percent offering
free checking. They also have lower overdraft fees,
and some community banks are even reimbursing
several, if not all, surcharges at out-of-network ATMs.
Additionally, studies show that community financial institutions also offer, on average, better interest rates
on savings and better terms on credit cards and other
loans.
In contrast, the kind of behavior we’ve seen from megabanks time and time again is unacceptable,
and we – as a collective industry – need to send a message that the blatant abuse of power just won’t be tolerated. These banks have a long-standing history of
consistently acting in their own self-interest regardless
of the impact on account holders or the economy at
large. If you are an investor, they are in your corner. If
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OPINION
not, then they really seem to care less about your well-
being.
There is a petition in response to BofA’s fee hike, and it is getting some traction. But it won’t work, as we’ve seen from the past, because BofA will ignore it long enough to outlast the consumer distaste for their
actions. You can see the petition for yourself at www.
change.org. It’s time to send a real message. We must hold our financial partners to a higher standard – and that standard has to indicate that consumers have the
right to expect a fair exchange. When a consumer trusts
a financial institution with their income and savings, that institution should honor them by respecting how
hard it is to earn every nickel that goes into the account.
It is time to take back banking.
Gabe Krajicek is Chief Executive Officer of Kasasa, an award-winning financial technology and marketing technology provider. For more information on Kasasa, visit www.kasasa.com, or visit them on Twitter @Kasasa, @KasasaNews, Facebook, or LinkedIn.
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BY JIM ROMEO
Network VisibilityA conversation with Jay Botelho of Savvius Jay Botelho is the Head of Products at Savvius Inc. based in Walnut Creek, CA. Savvius is a technology company that provides network visibility to monitor performance of crucial networks and insure their reliability to support the business operations they serve.
BRANCHTECHNOLOGY
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S avvius’ products are used by bank and credit union branches. We spoke to Jay
Bothelo to gain insight into this topic of
network visibility and what it means for
the branch of today and tomorrow. Here’s how our conversation went.
Branch Business: What is network visibility and how
can it be used at the branch level?
Jay Botelho: Because of the size and number of bank
and credit union branches, network visibility is often
limited, or non-existent until an actual problem presents
itself. Then, and only then, does a network engineer or
IT organization set up, on a temporary basis, the tools
needed to troubleshoot the situation. The real solution
is to have a 24x7 network visibility solution in place.
Such a solution provides a headquarters-based IT
organization or network engineer(s) visibility into all
network traffic at the bank, whether or not that traffic is routed back through a centralized data center. A well-
designed solution provides both overall monitoring
dashboards for long-term trending and reporting, and
detailed information, like the network traffic itself, for immediate root-cause analysis of problems. And
all of this can be done immediately, and remotely,
eliminating costly travel to branch offices and enabling problems to be solved quickly. Small-footprint, low-
cost hardware solutions now exist that makes network
visibility feasible even for banks with thousands of
branch offices.
Branch Business: For a branch manager, will it make
their life easier?
Jay Botelho: Network visibility is not something
your typical bank branch manager thinks about on
a daily basis, but when network issues interrupt
branch services, it becomes top of mind. If the branch
manager can have a network expert immediately
access the network traffic and begin troubleshooting the instant a problem presents itself, or better yet, if
a remote network engineer can see problems brewing
with network visibility and address them before they
Jay Botelho, Savvias, Inc.
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present themselves to tellers and customers, the branch
manager’s life will indeed be easier.
Branch Business: How about for customers within the branch, will network visibility dashboards be able
to benefit them? Perhaps indirectly?
Jay Botelho: All a customer in a bank branch wants
to do is get in and get out, finishing their transaction as quickly as possible. Although the customer has little
concern for how the branch’s network is configured or monitored, they never want to be inconvenienced
by a slow, or unresponsive, network. So, although a
customer may never see the benefits, they’ll also never suffer the consequences of poor network performance
if proper network visibility is in place.
Branch Business: For branch managers, what advice
would you give them with regard to the security of
applications in the cloud? There’s a high degree of concern that data could be compromised, yet many
believe that the cloud is actually much more secure
than an on-premise software installation? Would you
agree and what can you tell us about this from the bank
and credit union branch perspective?
Jay Botelho: The “cloud” is a very broad term.
Breaking it down a bit should help provide at least some
assurances. There are three broad categories to consider
– private cloud, public cloud, and SaaS applications. In private cloud, the bank utilizes virtualization
technology for its servers and applications but remains
in control of these assets. Key applications are run in
this private cloud versus on premises at the branch. In
many ways this is similar to the centralized data center
model many financial institutions have followed for decades. The risk is very low, but it’s still “cloud.” In public cloud the bank makes a decision to leverage the
hardware assets of a third-party provider, like Amazon,
while still running their own applications. There can
be (but not always is) a financial benefit in making this transition, but significant trust must be placed in the third party. It is assumed the public cloud provider
implements security at least as well as the customer
since they can afford to hire the best team possible and
amortize it over many, many customers, but security is
always a risk. When it comes to Software-as-a-Service
(SaaS), the bank is putting substantial faith in the SaaS
provider, since the third-party controls everything
about the application – hardware, software, data, security, etc. It is at this point that extreme caution
should be employed. Non-critical applications may be
candidates for SaaS, but it’s unlikely banks are ready to let their core banking applications be managed by
third parties.
Branch Business: Any useful lessons learned about
network visibility and activity within branch operations
- or advice that may be useful to a branch manager?
Jay Botelho: The takeaway for branch managers is to
make sure they’re informed about and involved in the deployment of proper network visibility within their
branch(es), visibility that provides skilled network
engineers remote access to the branch 24 hours a day. If
told that visibility at each branch is too expensive, they
need to be educated and confident enough to challenge the IT organization to find an appropriate solution, because cost-effective solutions, both hardware and
software, do exist that will help to eliminate just about
any network issue a branch can face.
Jim Romeo (www.JimRomeo.net) writes about business and technology topics.
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BY RANDI MARMER
“Member Banking is Better Banking®” Captures the Theme of Brand Initiative
I n a highly competitive and saturated market,
financial institutions often look for ways to distinguish themselves from the competition.
When TruMark Financial® Credit Union, one of
the strongest, most progressive credit unions in
Southeastern Pennsylvania set out to create a branding
initiative, its mission was to do just that --- distinguish
itself from the competition.
Founded in 1939, TruMark Financial is
headquartered in Fort Washington, Pa., and has
approximately $2 billion in assets through its 22
branches, Member Service Center, and a suite of
innovative online and mobile banking services.
Offering a full range of banking, investing, and
insurance services to more than 115,000 members in
Southeastern Pennsylvania the credit union receives
high praise from its members on member surveys.
TruMark Financial was performing well, member
satisfaction was high, and the business was growing.
Despite that, management realized there were so many
people living within the credit union’s footprint that were unaware of the financial services and benefits it offered. The branding initiated presented an opportunity
to heighten awareness.
TruMark Financial hired branding experts, Van Deusen & Levitt Associates (VDLA), to conduct employee interviews, member focus groups, and an
Emotional Brand Analysis® (EBA) – a proprietary quantitative research technique that uncovers emotional
and rational factors that drive member behavior.
Thirty-two distinct brand attributes were identified and then measured against actual marketplace performance
to quantify how each attribute could impact members
and the organization.
EBA® Analysis revealed TruMark Financial
already had a very specific emotional brand advantage over competitors that could be used to effectively attract
new members. Using this insight, the credit union
marketing team worked with VDLA and developed a new brand positioning, target audience profile, and a simple yet powerful brand promise: “Member banking
is better banking®.” The advantage the credit union
had was it already possessed the emotional brand
among its members. The components were already in
place. The next step was to design a strategic plan to
communicate the message through the media and other
delivery channels.
The new branding initiative aligns with the credit
union’s member-focused philosophy and aims to strengthen the credit union’s visibility in Southeastern Pennsylvania. Everyone knows membership has its
privileges and “Member banking is better banking®”
captures the theme of the initiative, said Elizabeth
Kaspern, TruMark Financial’s senior vice-president, chief retail services officer.
BRANDINGINITIATIVES
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pscu.com
844.367.7728
Member Insight: Advanced Analytics Reporting Tools
Uncover a wealth of knowledge in your data with easy,
point-and-click, ad-hoc reporting. Member Insight solutions
empower credit unions with actionable intelligence that
drives cardholder engagement, satisfaction, and retention.
Understand Your Market Our Venture. Your Gain.
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“Consumers that bank with TruMark Financial are
more than customers, they are members,” said Kaspern.
The frontline staff addresses members by name;
they are not just an account number. The branding
initiative communicates what it means to belong to
a credit union and the benefits that come along with membership. Delivery channels to heighten awareness
include television and radio commercials, billboards,
and an updated easy-to-navigate website. The branding
initiative reaffirms the credit union’s commitment to its members. Humor and a catchy tune set the commercials apart from the usual financial institutions’ messages and boast TruMark Financial not only likes
a little competition but offers better products than its
competitors.
The credit union’s senior management team views the branding effort as a way to stand apart from the
competition and better reflect the value the credit union provides to its members. “It’s an opportunity to educate consumers about the credit union, its purpose, its
visionary goals, and the benefits of membership,” said Richard F. Stipa, TruMark Financial’s chief executive officer. Working with supervisors and team leaders
at TruMark Financial, VDLA also created a comprehensive brand training curriculum to ensure
that all employees could easily and consistently live
the new brand promise every day, with every member.
At every member touch point, TruMark Financial uses
its emotional brand advantage to attract new members,
deepen existing relationships, and inspire employees
to outperform.
The management team realized the employees
had to be engaged before rolling out the brand to the
public. To create excitement and increase engagement
among employees, the marketing team created posters
that were displayed on easels on each floor at its headquarters as well as in the branch work rooms. One
message said, “Watch for the commercials on April 2.”
Another said “Member banking is better banking®.”
Before long employees found themselves walking
around saying “Member banking is better banking®,”
embracing the branding initiative.
On April 2, the brand initiative was officially introduced. At 6:30 a.m. bright-eyed and full of
enthusiasm, the senior management team greeted the
first employee as she entered the building and offered her a sweet treat. Each employee was personally greeted
and the stage was set for the rest of the day. “Member
banking is better banking” resonated throughout the
building as employees donned their new TruMark
Financial polo shirts with “Member banking is better
banking®” embroidered on the sleeve.
When employees turned on their computers, the
portal page displayed a graphic with the message, “Our
enduring idea: Member banking.” There was a wave of
Mom spot Dad spot
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excitement in the air throughout the day as employees
talked about the radio and the television commercials
they heard and saw as they got ready for work that
morning.
To keep the momentum and enthusiasm going,
front-line employees in TruMark Financial’s 22 branches distributed slices of cake decorated with
the message “Member banking is better banking®.”
Members happily shared in the celebration and
expressed their appreciation for the credit union’s continued commitment.
In conjunction with the branding initiative to
increase visibility, the credit union continues to
support its community partners and consumers in
Southeastern Pennsylvania, demonstrating the credit
union philosophy, “People Helping People.” Some of the community outreach projects the credit union has
End title Please note: Click here to view the television
commercials: www.trumark.com/better
sponsored include a clothing drive for women returning
to the workplace, a book collection for school-aged
students, and a food drive for local pantries.
As the credit union continues to thrive, it’s important its members realize “Member banking is
better banking®” because the member belongs to a
financial not-for-profit cooperative. TruMark Financial continues to grow and has become one of the most
progressive credit unions in the country where its
employees live the brand and “Member banking is
better banking® “resonates.
Randi Marmer is the Assistant Vice President of Public Relations at TruMark Financial® Credit Union in fort Washington, Pa. A seasoned communications and marketing professional, she has more than 25 years of experience in the credit union industry.
Virtual TellersTwo Managers Tell Us How They Keep Branches Personal Virtual teller platforms may offer opportunities for credit unions to extend their reach but they also pose the risk of impersonality. How can you take advantage of all this technology has to offer without alienating your members? Listen is as two CU branch managers share their top three secrets to success.
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BY KAITLIN MORRISON
4 BRANCHBUSINESS
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V irtual teller technology is reshaping many
credit union branches across the country
and the world. A virtual teller platform
allows members to interact with a remote,
live person to conduct their banking
transactions. This capability allows tellers to be offsite,
in a centralized location for multiple branches or
elsewhere. For branch managers, it represents another
tool to connect with members and improve their
experiences at their credit unions.
Rather than alienating your members with such
technology, you can implement it in the right way
and actually enhance the experience at your branch.
Your branch staff and other support staff are already
the backbone of your credit union. When you add new
technology, giving them the starring role will help
make the transition successful for everyone.
For this month’s column, we asked two credit unions to share with us how they successfully use this
technology and still maintain the quality, personal
connection members crave when they visit physical
branches. Their answers show how your branch can
add a personal touch and still extend your reach through
the power of virtual tellers.
Learn from their tech tips and help your members
have a top-notch experience with technology at your
branch.
Tech Tip #1: Plan for the learning curve by engaging
your staff and your members. Choose to deliberately
make the technology more human and personal.
While these systems do use technology, the
transactions are still fundamentally driven by human
beings on both sides of the machine. This may seem
very straightforward, but branches ignore this tip at
their own peril. Your members will likely need plenty
of time and help adjusting to your new system. Your
employees will, too.
At the Bay Shore Branch of New England Federal
Credit Union (NEFCU) in Long Island, NY, branch
manager Amy Williams-Carmella suggests accounting
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for plenty of time to assist members and help them feel
comfortable. This is also an opportunity for both your
in-branch and remote staff to shine.
“The two teams work cohesively as our member
service representatives spend a significant amount
of time at the ITMs (Interactive Teller Machines)
demonstrating and introducing members to the new
technology to ensure a positive member experience,”
Williams-Carmella says.
She also suggests testing how members use and
interact with your technology. Everything from camera
angles to lighting to how keyboards are positioned and
how responsive the touchscreens are all factor in to how
users interact with the technology. Technology that is
perceived as difficult, unfamiliar, strange or somehow
wrong can be off-putting or uncomfortable to some
members. User experience of technology should be an
important factor in how and what your branch presents
to the membership.
David Perry, vice president of branch operations at
Mid-Hudson Valley Federal Credit Union (MHVFCU), recommends preparing staff members for the time and
effort necessary to assist members during the transition
to virtual teller technology. This is also the right time
to employ creative strategies to make your members
more comfortable trying the new technology, he says.
“During our initial roll-out, we stationed staff on the
floor with dollar bills. We offered each member the
opportunity to deposit a dollar into their account as a
means of demonstrating the technology,” Perry said.
With a bit of planning and learning, you can even
build these new technologies into your branch team’s strategy. Be sure to include your offsite, virtual staff,
who are a valuable part of the success of your branch.
Tech Tip #2: Regard your offsite staff as essential
members of your branch team.
Whenever possible, try to include your branch’s offsite staff in team meetings or find other ways to keep
them informed and involved in the life of the branch. A
cohesive credit union team will help you provide better
member service. Your tellers understand your members
and are close to the needs of your membership, even if
they are remote, Williams-Cardella points out.
“I make sure to personally include our remote
tellers on anything affecting or related to the branch,”
she says.
Because remote tellers help members with their
financial transactions, they also have opportunities to
upsell and cross-sell.
“Our ITM tellers are a rich source of cross-sell and
sales referrals as they are the first line of communication
with our members,” she says. “The tellers act as an
extension of the branch and we consider them an
integral part of the branch team.”
Williams-Cardella’s branch has no onsite tellers. She claims this model is more efficient and allows tellers to
quickly help members with fewer errors and a greater
level of member engagement during transactions.
NEFCU’s headquarters in Westbury, NY has onsite staff and branch management to help members use the
machines and ensure that operations run smoothly.
“Our staff is excited about the new technology as it
represents the future of banking.” Both teams really do
work as one when they are serving members, she says.
At MHVFCU, Perry says the virtual tellers (whom the credit union refers to as “personal tellers”) are basically
their own branch and are valued for what they do for
the entire credit union. The personal tellers work at a
centralized location and function together as a single
team.
4 CFOCURRENCY
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“We consider them their own branch, a branch which
supports the entire physical branch network,” he says.
“The retail branch management team members consider
and refer to the personal tellers as ‘their’ tellers.”
Tech Tip #3: Boost your branch by taking advantage
of the best technology has to offer.
As Perry claims, technology offers some significant
advantages for your members that make the transition
to virtual teller systems worthwhile for many credit
unions. These systems allow your branches to scale
staffing levels to meet demand and to provide better
service during peak hours. Branches that see variable
traffic throughout the day can benefit from this boon.
You can seasonally adjust your staffing based on past
transaction data and expected future traffic, allowing
for flexible scheduling across multiple branches.
Even with these advantages for the credit union,
members also stand to benefit from improved service
during peak hours.
“The personal teller channel allows for the delivery
of personalized member contact over a broad network
during extended service hours,” Perry notes. “In these
days of commuting, working multiple jobs and such,
many members simply cannot make it in to the branch
during traditional business hours. The availability of
the extended service house the personal tellers offer is
a convenience many members need and desire.”
Williams-Carmella agrees. “It also eliminates a
lot of common errors as members are engaged and
can see on screen everything the teller is processing.
It improves the member interaction, which leads to
[fewer] transactional discrepancies. It’s a win-win situation for the credit union and our members.”
Making Technology Personal In Branch BUSINESS, we frequently talk about the
role of member experience in the life of your branch. If
you do choose to embrace remote teller technologies,
use them to enhance the personality of your branch and
its connection to the membership. Make the technology
fit the people, not the other way around.
As future credit union branches become more
digitally connected, it is this traditional value that
may just save branches from becoming irrelevant.
Your branch is only as relevant as it is to credit
union members, so make them the architects of your
technological experience as you create your branch’s future.
In addition to covering Branch BUSINESS for CUBusiness, Kaitlin is a freelance business writer basedin Central Washington State. She is passionate abouteducating her readers and is a proud credit unionmember and supporter of credit unions. You can readmore of her writing at www.kaitlinmorrison.com.
BRANCH BUSINESS
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BY MURTHY VEERAGHANTA
Modernizing the Branch Experience Starts with Core
BRANCH BUSINESS
35
F inancial institutions all over the country
are welcoming account holders into a
modernized branch experience. This effort
is fueled by a desire to create a seamless
customer experience by evolving the branch
experience to be an intersection between the online
banking world and the physical branch. Embracing
these changing expectations is inevitable, but updating
the branch experience goes far beyond a fresh coat
of paint on a feature wall. To create a ‘branch of the
future,’ financial institutions need to create a foundation to build on, which means starting at the core. Choosing
a core processor that cuts costs, increases usability,
and enables them to hire and train talent easily, ensures
financial institutions are positioned for sustainable
success.
Your Legacy Core is Holding You BackLegacy systems are slow, stagnant and often sorely
overdue for a total transformation. For decades,
core providers have used symptomatic treatment as
problems arise rather than addressing the root issue
within their systems: lack of adaptability. A recent
survey by NTT DATA consulting showed that more
than 70 percent of banking executives felt that existing
tools and processes within their core system couldn’t adapt quickly enough to change.
However, financial technology is changing quickly, and financial institutions are spending a lot of money to keep up. In fact, a study from Opimas
estimated that financial institutions spent $127 billion on financial technology in 2017. The question is, with many core systems being more than 20 or 30 years old
and difficult to integrate with today’s technology, is this money well spent?
It’s time for financial institutions to seriously consider a core conversion. Archaic legacy systems are inhibiting
financial institutions’ capacity to pursue growth opportunities and enhance in-branch experiences.
A Flexible Core Cuts CostsFinancial institutions spend heavily on merely
maintaining their legacy systems. According to the
study by NTT DATA, banks allocate more than 70
percent of their IT budgets to maintaining their legacy
core deposit systems. Realistically, this cost is not going
to decrease as technological innovation continues, and
the majority of institutions agree that they anticipate
investments in their legacy core to either increase or
stay the same. Upgrading to a flexible core system can cut these costs significantly. In addition to sustaining their core to match
updated offerings, financial institutions often work with third-party vendors to handle regulatory and
compliance issues. When converting to a new core,
financial institutions can make this process easier and less expensive by selecting a core with APIs that allow
third-party vendors to build on the software easily.
Financial institutions can also seek a core system with
a variable structure.
Most executives think that a core conversion
could never save money and time because of the
headache involved with converting; however, the best
modern cores are database independent. They work
with whatever database the institution currently uses,
making the transition simple and cost-effective.
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A Responsive Core Increases AccessibilityLegacy cores have long tied associates down, requiring
them to sit at a desk. Financial institutions should look
for an open, responsive and browser-based core system
that can increase employees’ mobility. Browser-based systems arm associates with the flexibility to open the software on any device, and highly responsive cores
look the same no matter which browser or device
they are using, creating a cohesive experience for the
employees that use them.
Not only does a flexible core system free up time on behalf of branch employees, but it relieves executives
from holding back on implementing innovative
products for fear of their legacy core not being able
to accommodate new products easily. Go-to-market
time can significantly impact consumers’ response to
a financial institution’s latest offering. For best results, financial institutions should bring an innovative product to consumers as soon as possible, but legacy
systems make this difficult. Many cores are so closed off that they require the core provider themselves to
add a new product or update to the system, slowing
down the financial institution’s ability to offer a new service. Open architecture cores that are parameter
driven are more accessible because they empower
financial institutions to add new products to the system easily. This saves financial institutions both time and money.
A Modern Core Raises the Bar for EmployeesAn updated core system can even enable financial institutions to hire younger, tech-savvy employees of
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a higher caliber. Legacy systems are clunky to use,
and many younger professionals or technologically
experienced job seekers prefer to work in an
environment that uses systems with a level of
technology comparable to what they use in their
personal life. Millennials, especially, no longer request
adequate technology at their jobs; they demand it.
These employees also understand the value of data
and analytics. When financial institutions are looking for a core system that will allow them to hire well, it’s important to consider a robust reporting module that
permits employees to pull reports whenever they need
to as well as automatically.
When financial institutions become serious about overhauling their branch experience, they need first to take a look at their core and ask if it is hindering
them or enabling them to create success. Dated legacy
systems will continue to prevent financial institutions from delivering innovative products and quick, modern
service to their customers and members. Financial
institutions can’t expect to survive the age of Apple and Amazon if they insist on using archaic systems
that require huge costs and time to upkeep. Instead,
they must search for a core provider that will bring a
new level of efficiency and service to their branches.
Murthy Veeraghanta is chairman and CEO of VSoft Corporation, a global provider of information and technology solutions for financial institutions. Veeraghanta has more than 30 years’ experience in the financial services technology industry. He co-founded VSoft in 1996 and has grown the company from inception to a global company serving financial institutions that range in diversity from large, international banks, corporate credit unions and service bureaus, to small community banks and credit unions.
BRANCH BUSINESS
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BY JIM ROMEO
Alexa, How Much Is in My Checking Account?
BRANCHTECHNOLOGY
38
I n early 2016, Capital One Financial blazed the
trail of using smart voice activation technology
for personal banking. A patron could simply ask
Alexa, the Amazon smart device: “Alexa, what’s my savings account balance?”
With all the courtesy and responsiveness that a live
human could provide, Alexa—an electronic device—
could audibly reply with the customer’s account balance. Adoption of this technology is growing in
the financial services sector. Credit unions are now on the cusp of adopting this and related technology for
their members, who increasingly expect their banks to
bloom with technology, automation, and ways for the
tech-savvy member to embrace digital technology. This
includes the voice movement—the same technology
customers can use in their smart homes.
The Voice Movement “The voice movement is
already well-entrenched
in a large segment of
the population,” says
Elizabeth Robins,
Product Director of the
Best Innovation Group
in Tampa, Florida.
“ V o i c e - a c t i v a t e d lighting, appliances, and
environment controls
make up today’s ‘smart home’ functionality. It is only natural that
activities like ordering
a car service, a pizza,
or a latte are becoming incredibly popular because
companies building voice apps for these services
are creating a frictionless ordering process. Voice-interactive financial operations are a natural step in this progression. As the systems that underlie this
functionality get smarter, and the data that fuels these
interactions becomes more widely available, we can
increase the breadth of features that voice services can
provide. Imagine what a Hall of Fame, a museum, or even a monument could be and do with this technology.
Instead of being defined by the past, we invest in the future. We continue to push the limits and challenge
ourselves to be a dynamic organization that comes
to life in classrooms, curricula, and competitions
throughout the country. In partnership with more than
1,400 schools and districts nationwide, we connect
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BRANCH TECHNOLOGY
inventors with creative minds of all ages to provide
these future leaders with the experiences and tools they
need to help them realize their innovative potential.”
Banking in the Age of AmazonSmart home devices are available for retail purchase
and are affordable. As consumers become accustomed
to using these devices, institutions such as banks and
credit unions are opening the door to such technology.
Consumers are used to Amazon and the many
conveniences that the online behemoth brings, so
incorporating its technology in credit union branches
is a natural fit. “Customers interact with brands through artificial intelligence-powered natural-language conversational
interactions,” says Alex Chan, Senior Product Manager
with Central 1 Credit Union in Vancouver, Canada. “We’re already seeing large financial institutions in Canada and in other countries release applications
where the user interacts conversationally with Amazon
chatbots. Big technology industry leaders such as
Amazon, Google, Apple,
Microsoft, Facebook, and
Samsung are continuing to
invest in this technology at
price points that are attainable
by the masses. It’s interesting to note that by 2020, 30% of
web-browsing sessions will be
performed without a screen.
Many teens already use voice-
search technology daily, and
new audio-centric technologies
such as Apple’s AirPods, Google Home, and Amazon’s Echo are turning ‘voice first’ interactions into ubiquitous
experiences. By eliminating
the need to use your hands and eyes for browsing, vocal
interactions extend the web experience to multiple
activities such as driving, cooking, waking, socializing,
exercising, operating machinery, and more. By the end
of 2017, watch for room-based screen-less devices to
be in more than 10 million homes.”
Voice Activation in the Mainstream?Voice activation technology is not mature by any means, particularly in today’s credit unions. But this technology is attuned to the credit union member who
still wants to visit the branch to conduct his or her
financial business. Will this technology become mainstream? Some
think that it’s only a matter of time. “As credit unions seek to continually make life
easier and add value for their members, the use of
voice-enabled technology will play a key role,” says
Mickey Goldwasser, VP of Marketing for Payrailz, a digital payment company located in Glastonbury,
CT. “Voice is certainly not new, with voice response (VRU) still in use at many credit unions, but what is
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BRANCH TECHNOLOGY
exciting is the emergence
of voice-activated smart
devices such as Amazon
Echo, Google Home, and even Apple’s Siri. The question is not if we will
see this technology go
mainstream, but when?
The answer is ‘sooner
than we think.’ We are entering a new technological era driven by the ‘do it
for me’ phenomenon, or automation services driven by advances in machine learning, that has seen the
advent of self-driving cars, self-setting thermostats,
self-driven vacuums, robo-investors, digital personal
assistants, and the list continues to grow. There is
nothing easier than using our voices to make requests,
and this certainly applies to banking and payments.
Providing conversational banking and payments will
help address the demand for easy-to-use ways for
members to interact with
their credit unions and
access their accounts.”
“Once a credit union’s IT systems are equipped
with the interfaces that
allow mobile and voice
services, it becomes
possible for a wider range
of smart devices to provide
a ‘front end’ or enhance data interactions with the credit union,” says Ted
Bissell, Global Head of Digital Consulting at Axis Corporate. “Members might opt to share their current
location and designate where they prefer to be when
conducting sensitive transactions. Sensors on the farm
or equipment measuring the expected or actual yield
of a harvest, for example, can predict financing needs. Deliveries of raw materials to a manufacturing facility
can anticipate cash flows. For credit unions in places
where members spend a lot of time at the wheel of
their cars, a range of voice services optimized for the
constraints of the driver has yet to be developed.”
The full adoption of voice activation technology
will require good IT security hygiene to ensure that the
technology complies with security measures. Credit
unions and their staff must work to ensure that member
conveniences are at the center of these efforts in a
trusted environment.
“With the introduction of any technology, best
practices, security, and privacy must be in place before
the technology is implemented,” says Chen. “When
it comes to the implementation of voice activation
with smart devices, at Central 1, we have an entire
compliance team working behind the scenes to ensure
that best practices, security, and privacy are at front of
our minds with the implementation of voice-activated
transactions. Our team puts our innovative platforms
through industry best practices and rigor to ensure our
members are able to have convenience balanced with
security.”
Jim Romeo (www.JimRomeo.net) writes about business and technology topics.
4 BRANCHBUSINESS
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Ted Bissell, Global Head of Digital Consulting at Axis Corporate.
Mickey Goldwasser, VP of Marketing for Payrailz
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