New Year, Renewed Resilience in Banking

In this episode, Sean and Gina kick off 2021 with a look at what we can learn from last year’s challenges and apply that resilient thinking to 2021, especially the flight to purpose and how people can experience the things you say you stand for. They take on questions posed in December after their presentation at the industry’s leading branch banking conference Future Branches and give insights into what banking leaders are facing head-on, including balancing experience and efficiency, deploying the right technology and rightsizing formats in the branch network.

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. This is our Believe In Banking podcast. I am Sean Keathley, president and CEO of Adrenaline.

Gina Bleedorn: And I’m Gina Bleedorn, chief experience officer at Adrenaline.

Sean Keathley: We’re back at it here at the podcast in 2021. And in our last episode, we talked about the year-end wrap up and things we saw and heard. And as we’re officially into this new year, Gina, I am confident there are things that are going to persist and maybe better versions of things as a result of what we’ve gone through, maybe bring out a couple of those as we enter the year here.

Gina Bleedorn: Yeah. So I think that if we focus on what we can learn from 2020 and apply that thinking to 2021, I agree there are a lot of things that are going to stick, and I think that are going to be for the better for everyone, for organizations and for people. I think one of those things is the flight to purpose and purpose-driven banking and aligning with your purpose and a lot of trade winds forcing organizations to re-examine their purpose and make sure their brand is aligned with it. I think what organizations need to focus on now is making sure actions are not only aligned, but are playing out in meaningful consumer-experience oriented ways. How can people experience the things that you say you stand for and the things that you say you believe in? And that requires a big shift in a lot of the ways banks and credit unions operate.

Sean Keathley: Gina, good point and I think it’d be interesting for our listeners to maybe get a glimpse into what we did as we ended the year in terms of the conversations around the Future Branches conference. That has been a really neat partnership over the last few years. We’ve seen the attendance grow each and every year as people have tried to balance their brand, their purpose, their physical network, their digital channels. And it was very interesting in 2020, as the conference had to be held virtually, it really caused us to have a lot of meaningful discussions. We had a lot of pre-conversations. I think we ended up talking to 10 of the top 25 banks in pre-meeting discussions. And then we had a couple of hundred people listening to our keynote and there were some great questions and maybe we should bring up some of those questions and make that a part of our discussion today.

Gina Bleedorn: Yeah. What we discussed was about branch network transformation. The session was called turn your biggest expense into your biggest opportunity. We found out later from Future Branches, our session was the most heavily live attended session of any at the several day conference event which means that people want to know about this. So we think it’s worthy of expanding on through those individual conversations. And as a result of the live presentation, we received a number of questions. The first was, are ITMs essential to really shrinking down to the micro level?

Sean Keathley: 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 felt in a lot of ways that a lot of architects and people that are 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 right, what are you trying to solve for? Because if you’re 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.

Gina Bleedorn: But if you’re ready to migrate out faster, ITMs might be a better choice than TCRs in a micro format. But if you do that and get rid of TCRs and 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 clients 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, 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. 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.

Sean Keathley: 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. The question came up at December Future Branches and it’s talking about this use of micro branches in how do you balance things, but ultimately have less capital spent. And this was the question micro branch has seemed 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. And something else to think about from a design and deployment standpoint, these things need to be billboarded as much as possible as do all of your branches, but especially when they’re small.

Gina Bleedorn: 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 focused 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 not only 24-hour accessible, but use the branding of the ITM itself to help with the billboard presence of that micro branch. 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 last 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. 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.

Sean Keathley: 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: Then you are this, an extension of the branch, drive-up or walk-up, not necessarily really inside it.

Sean Keathley: That reminds me of an example of a very good client of ours. We’ve got a gentleman that runs a community bank, Northern Mississippi, moving into the greater Memphis area, and he asked me late last year, “Why would I use an ITM? There are markets where they are gaining major market share by having lobbies opened.” And we started talking about a key market that has a downtown facility and it’s not a real profit center but it’s important to that bank that they prop up that town and they remain a strong business. And the notion of having an ITM that’s not attached to that bank allowed him to think about reinvesting in the lobby experience, whereas without a drive-up attached that would have been impossible. And then we talked about, if you used a remote channel, where in the world would I put them?

Sean Keathley: And I said, “I’m just guessing. People in this part of Mississippi, things you might do. Go to Ole Miss games, go to Memphis, go to New Orleans.” And he said, “We do all those things.” I said, “Well, exactly.” So now we’re talking about plotting these dot connectors in between your markets but on the path and journey of your customer where maybe the density does not allow you to pull a full branch. And that’s where we now use the analytics to chart out the best places and you’re seeing in real practice how ITMs become part of a strategy to extend the branch and to dot connect to show a bigger market.

Sean Keathley: And that’s just one example from the many last year where we’re talking to real bankers about real life strategies, things they’re working on, what their market conditions are presenting to them. And it just makes me want to remind everyone as we start this year anew and we know where our listener base is growing, and we’ve got more first-time listeners. Let’s go back to why we started this in the first place. We do believe in banking and we think it is more important than ever. It’s all about people, communities and we’re excited to continue that discussion as this year goes on.

Gina Bleedorn: Much like what I started this episode talking about, I believe in banking now more than ever because the crisis has forced change to occur for the better, for the better of organizations doing real good banking and credit union organizations for people. And that’s good for everyone, for communities, for societies, for consumers and ultimately, for the bottom line of financial institutions. Because when you stand for truly helping people financially and you do things that support that and you help them be better, you’ll win their loyalty, advocacy and trust that will pay off in revenue and they’ll win by having a better financial life. That is why I believe in banking.

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,