Banking 2021, Part 1: Banking Trends & Topics That Defined The Year

In this special episode, we take a look back at the trends and topics that defined 2021. Sean and Gina discuss how banking provided short-term solutions to challenges and what opportunities opened up because of the pandemic that will endure. They spoke specifically about banking’s balance of technology and human consultation, and the staff that it takes to be at the right place at the right time for customers and members. With clear eyes, the two hosts all but predicted the increasing deployment of hybrid solutions like ITMs and smaller format branches that are transforming the consumer banking experience post-pandemic.

Text Transcript

Intro: This is Believe in Banking, a podcast series for decision-makers, influencers, and leaders, featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower. Here are your Believe in Banking hosts, Sean Keathley and Gina Bleedorn.

Sean Keathley: Welcome to our Believe in Banking podcast. I am Sean Keathley, president and CEO of Adrenaline. Following our last podcast, Gina and I discussed what’s on the minds of bankers. We thought what better way to start the end of the year wind down than to look back on some of those conversations about what banking faced in 2021. With still significant trade wins, it’s interesting to consider what were temporary responses to more short-term challenges, and which of those will stick in the longer term. In this special episode, we’ll revisit banking’s balance of technology and human consultation, how omnichannel solutions and bank formats are transforming the consumer banking experience post pandemic. We’ve got the rise and increase of the hybrid tools like ITMs, video chat, but we’re also the same time seeing retail bank branches lean in to becoming a more consultation hub at the right place at the right time. Staffing requirements, whether at the branch or remotely reflect the evolution as bankers serve as trusted advisors and are no longer simply just tellers who process common transactions.

Sean Keathley: It’s a trend we expect to continue well into 2022 and beyond. We’re happy to return to these conversations about how banking is delivering on consumer expectations with these more modern experiences. We hope you enjoy. We’ve been talking about ITMs for the last few years. I think the discussion now is really critical because technology in the branch has to play a role in the balance of providing experience, efficiency, consultation, ubiquity in terms of location. It is really impossible to do it without technology. Would you design a custom home and put a VCR in that brand new home? We’ve felt in a lot of ways that a lot of architects and people that aren’t understanding the trends and looking forward have not been thinking about this as to where things are headed.

Sean Keathley: And so if you’re decreasing square footage, ITMs, TCRs, these are part of the strategy. And what we do now is we spin into like, what are you trying to solve for? Because if you are already to a point where physical is around in person consultation versus being more 24 hour, it really depends on what we’re trying to solve. So we’ve been talking to people around understanding formats, what is the business objective? And then you decide how technology plays a role. Maybe far too many people are starting with the technology. And we think that’s in the wrong order.

Gina Bleedorn: When you go micro and you go really small, you still have to have a way to deal with cash. So that can be through a machine or through staff. You either have to choose an ITM or a high functioning ATM. An ITM, probably better as far as capabilities or a TCR. If you are ready and your customers are ready to migrate transactions out faster and mind you, it is a combination of what your consumers want as well as what your organization is ready for in digital transaction migration and virtual sophistication. But if you’re ready to migrate out faster, ITMs might be a better choice than TCRs in a micro format.

Gina Bleedorn: But if you do that and get rid of TCRs in a human way to help staff and you have staff in the branch, you’re going to need to be prepared to help customers adopt the new technology with human assistance. And we have had client do that in quote, unquote cashless branches successfully. But do not forget that any objective for any staffed location has to be to support in person consultation and conversations. The transactions are an afterthought. You have to be able to service them and have cash in some form. And the opportunity of in person conversations that you’re going to have as well as mentioned how fast regular transactions are going to stop occurring in that micro format is whether or not you’re ready to move from TCRs to just ITMs.

Sean Keathley: When the iPhone was introduced to the market at the same time of the financial collapse in 08, it started to make the branch as a transaction center, something very different. And so over the last 12 years that’s been evolving. COVID was a accelerator for sure, but now we’re thinking about it as more a matter of fact. On the flip side, it has been really interesting having conversations about this notion of consultation and how the branch plays a role. There are multiple markets where certain branch networks had closed branches. People did not enter 2020 with renewed strategies on drive ups and many had not rolled out ITM, ITM drive ups.

Sean Keathley: And so when left with consultation centers that are closed, we saw organizations find new customers by just being open and open meant sometimes lobbies, sometimes drive ups, and sometimes ITMs. So this notion of starting the relationship, having the physical branch, having the banker, real important consultation. And as you do think about this balance of staff, technology, service, experience, one thing we know, you don’t need all of your branches designed alike and they do not need to be these huge mega service centers that we’ve seen in the past. Talking about this use of micro branches and how do you balance things, but ultimately have less capital spend. Micro branches seem to offer a low cost blend of personal service and technology, but to what extent are they adopted and how are they made most effective?

Gina Bleedorn: Yes, they do exactly that, blending service and tech efficient delivery. Most institutions we believe are at least considering them, if not already piloting them and some have had versions of them for years. But the most critical thing to remember is that micro branches are spokes within an ecosystem. And when you deploy them, they should either be in areas of let’s call it lesser market opportunity or in areas where real estate is either very expensive or hard to come by and you have to have a smaller format location. All that aside, they are most effective when they are supporting consultative conversation while efficiently serving transactions in the background.

Gina Bleedorn: And something else to think about from a design and deployment standpoint, these things need to be billboard it as much as possible, as do all of your branches, but especially when they’re small. If it’s a little vestibule in a inline shopping center, or if it is something that is standalone, use every aspect night and day to make it seem as large as possible. Prominent signage as big as it can be within restrictions, as much branding and use of your brand color, absolutely focus on nighttime illumination. The night view sometimes is as important or even more important than daytime. And if using ITMs, which as mentioned, make a lot of sense, make sure they are only 24 hour accessible, but use the branding of the ITM itself to help with the billboard presence of that micro branch.

Gina Bleedorn: That’s how they’re made most effective, as little mini billboards that are points of presence, but really efficient ones, which leads to the question I wanted to cover on here, because it’s clearly an ongoing, real topic of conversation. How are bank branches using ITMs in the real world? I’ve seen them inside the branch in some places, but with the examples presented here, ITMs are outside the branch. Sean, how would you answer that?

Sean Keathley: Well, it’s a fair question. In the absence of a strategic discussion with a specific institution about where they are on their journey and what they’re trying to accomplish, I would say most often, and it is our belief that ITMs are best used as an extension of the branch or as part of the drive up capability. And in the right markets where there’s urban traffic, a walk up service and generally speaking, not inside the building. We still subscribe to the idea that you need to be available to people.

Sean Keathley: You need to be convenient. You need to be on people’s minds, whether they need you or not through the big signage you talk about Gina, but we’re really delineating between am I getting out of my vehicle or not? And if you’re not two kids in the back, inclement weather, whatever it may be, the ITMs are an incredible way to have an option of putting a face on the screen and helping, extended hours, having locations you could not have if a full branch was required. There are fewer examples where we’re saying it is a good investment to replace a human being with a machine inside the building. We’ve talked a lot about the dot connecting of the spokes and that ubiquitous presence. The ITM is critical in our mind in doing that cost effectively.

Gina Bleedorn: They are thus an extension of the branch drive up or walk up, not necessarily really inside it.

Sean Keathley: As we move forward, there’s a lot of still incredibly difficult challenges everyone’s facing. One of those for these financial organizations is just staff. Last year, we had to keep staff safe and that’s still not out of people’s minds, but it’s gotten more complicated. A lot of different markets are having a hard time finding enough people to work in certain jobs. And manning a bank branch or credit new branch is something that is very difficult and it can be even more so in certain regions, there’s been people moving around, there’s safety concerns. There’s a lot of factors around that. And we were talking to one of our clients who is branching for growth, and they’re doing a couple of things. One of the things they’re talking about is in those growth markets, it’s really important to have the higher quality employee.

Sean Keathley: They’re paying more in these universally designed models. They don’t need as many employees as they do in a traditional teller driven branch, but they’re making real investments and people that can really help solve problems, give advice as opposed to using the more traditional approach where there’s not technology and you need a lot of different bankers. So I think that’s an interesting trend and perhaps a best practice that can start to be deployed. Technology and cash automation, et cetera, is making the simple, more convenient for the consumer. And when you need real hard advice, you’ve got a qualified banker that can help with the conversation.

Gina Bleedorn: One way to look at it, kind of what’s old is new, banks and credit unions have always told us that what is the difference when I ask them, what makes you special? Our people, our people are the difference. Our people are why people bank with us. The difference now is those people have to do more. It is not as much about servicing with a smile and support, but advising. And so your people can still be, and ideally should still be the differentiator because a human to human relationship with any consumer or business owner of any age from any demographic background will always trump that of a digital one. So in a way, doubling down on your people and reframing who those people really need to be, that is a key to future success.

Sean Keathley: I totally agree, Gina. And I think the times we’re living in are putting more emphasis on it. There’s a lot of studies that are out there around just people’s concern about their finances and people are worried and we’re seeing it across age groups. So now even the youngest workforce is worried about do they have too much debt, student loan or otherwise. Do they understand finances? Can they start understanding the power of saving today and the power of saving over time? And I think that notion of financial literacy and having organizations really doing good in the community by teaching people is one of the examples that can be an outcome of that people focus on helping versus that just customer service with a smile. So there’s a balance. And I think the old is new is brilliant. We’ve long been talking about using strategic tools like ATMs, deposit-taking ATMs, ITMs, teller cash recyclers, trying to get the cash out of the hand of the banker.

Sean Keathley: There’s a lot of benefits, safety, security, it lowers theft. It’s way more efficient. This is really an important way to balance the different tools or ways people want to use their money, whether it is digital, cash, or a balance of that. We’ve been working on this ITM research, looking to industry experts, talking to lots of different organizations of different sizes and different parts of the country and getting their feedback on their thoughts around ITMs, how they’ve used them, what they think of them. And it’s got to be part of your strategy.

Gina Bleedorn: I think that what we’ll find, some preliminary findings, ITM deployment is exploding, but the right balance, this is not new news, continues to be physical and human delivery. That human delivery can be an absolute point of differentiation, but you have to reimagine it for what consumers need from that human point of contact now.

Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site,