Ten critical insights from 400 bankers

WBR Future Branches Conference, Boston, June 24-25, 2024

EXECUTIVE SUMMARY

The WBR Future Branches Conference in Boston on June 24-25, 2024, brought together key figures from the banking industry to discuss innovative strategies for branch evolution, customer engagement, and leveraging technology to remain competitive in a rapidly changing landscape. Prominent speakers from national and regional banks and credit unions, in addition to industry experts and various levels of banking executives, shared insights on transforming branch networks and customer experiences. Mr. Jean-Pierre Lacroix took the following notes and executive report during the conference but only captured some of the content.

Ten Key Themes and Strategies Emerged From the Conference:

1. Trust and Human Connection: Andrea Principe of JPMorgan Chase emphasized the importance of blending digital and physical experiences to deepen client relationships. The bank plans to open 500 branches and renovate 1,700 in the next five years, aiming to create advice-centric branches that build human connections and trust. Training and empowering branch employees are pivotal, focusing on belief, skills, and confidence to engage effectively with customers. Chase’s One Team approach integrates wealth, SME, and loan specialists to meet diverse client needs.

2. Community Engagement: JPMorgan Chase has dedicated community branches in black and Latino markets, offering financial training and services to build trust and engagement. Homeowner grants and SME support programs have shown significant positive impacts, including a 10% deposit growth in these communities. Ann Tangen of BankFive highlighted the bank’s historical commitment to community roots and the need for modern branch redesigns to stay relevant. Their approach uses historical community photos, financial education, and modern technology to attract and retain customers, resulting in significant deposit growth.

3. Employee Training and Retention: Various institutions emphasized continuous training, career path development, and leveraging technology for training. Strategies include digital assessments, gamification, and personalized coaching to ensure employees can handle evolving customer needs. Employee engagement is crucial for customer satisfaction and retention.

4. Branch Network Evolution: Attendees' show of hands demonstrated the growth in branch renovations and new locations. JPMorgan Chase plans to double down on branch presence, focusing on strategic locations that meet community needs. The goal is to have 70% of the population within 10 minutes of a branch. Many financial institutions were modernizing their branches, focusing on advisory services rather than transactions and leveraging community engagement to drive branch success.

5. Technology and Digital Transformation: Digital First Strategy: Panelists discussed integrating digital channels with physical branches. Innovations like ITMs, AI-driven customer insights, and mobile banking are essential for providing seamless, personalized banking experiences while reducing transactional costs. The adoption of ITMs to handle routine transactions, free up staff for advisory roles, and reduce costs is increasing, as is the case with improvements in software.

6. Financial Education: Many speakers across all types of institutions have put greater importance on financial literacy and education, from providing courses to fully integrating them as part of their organization’s purpose. These organizations have focused on providing comprehensive financial education to customers and their employees at all levels of the organization. Programs include workshops, online resources, and personalized financial advice to improve financial wellness and engagement.

7. Community and SME Support: Besides a renewed focus on financial education, many institutions have established SME strategies as part of their branch networks. These institutions recognize SMEs as a vital customer segment and have enhanced their offerings to SMEs with unique strategies, including bundling services, providing specialized financial products, and offering educational seminars to support SME growth and retention. Beyond SMEs, some credit unions and banks have initiated more robust community outreach programs to reflect the communities' needs better. Efforts include engaging with underserved markets through tailored financial products and community advisory councils. JPMorgan Chase has opened community banking centers staffed by community members in many of these markets and provides extensive financial support programs. Greylock Credit Union has also demonstrated opportunities in Red Line communities to deliver services while driving profits and growth.

8. Data and AI Utilization: Leveraging AI to analyze customer data for personalized marketing, risk analysis, and optimizing branch locations. In addition, many institutions going through technology and CRM modernization have emphasized collaboration with vendors to enhance data-driven decision-making and operational efficiency. Some institutions now use AI for real-time customer feedback and personalized service offerings, improving customer satisfaction and operational efficiency. There was some level of hesitation or trepidation among attendees about using these technologies, with many setting up AI committees to determine the level of integration.

9. Branch Design and Real Estate: Modern branch designs focus on creating advisory centers rather than transactional spaces, integrating community-specific elements to enhance local engagement. Factors such as demographics, site convenience, and the competitive landscape are crucial in branch planning. Financial institutions noted the importance of the branch network in building customer loyalty and delivering better financial advice.

10. Challenges and Solutions: Breaking down siloes as part of change management was a vital topic of discussion and concern. Many noted that the most effective strategy in breaking down silos is through improved communication and collaboration. In addition, breaking down silos was reported as essential for enhancing customer experience and operational efficiency. Universal banking and cross-training employees are also strategies to address this issue.

Summary

The conference underscored that financial institutions must continually innovate, focus on customer and community engagement, and leverage technology to stay relevant in the competitive finance landscape. Presenters reinforced the importance of exploring different business models to engage with customers through hyper-personalization beyond products and including physical assets. With the advent of AI, many view the emergence of this technology as both an asset for increased efficiencies and a trepidation of how these technologies may disrupt banking. Please visit https://www.sld.com/white-papers/ to explore studies on the future of banking, data to support the branch's role, such as ROI, and what defines a seamless banking experience.