In studying over 200 financial institutions, Accenture found that strong organic growth is a distinguishing characteristic of high performing businesses. In many cases, market premiums from growth leaders exceed 20 percent. A closer look at these businesses shows they have de-emphasized cost-cutting and efficiency programs as a way to deliver long-term positive market valuation and shareholder return. Instead, these banks are renewing focus on the end-consumer and the transformation of their distribution networks.

The drive for organic growth involves building world-class distribution capabilities – particularly in the branch network – and reinvigorating innovation activities around core product offerings. Importantly, creating a winning distribution program today requires not just a basic tuning of existing distribution networks, but a transformation, if banks aim to win a disproportionate piece of the large gap between customer revenues and consumer spending on financial services. The result could deliver revenue growth of 10 to 20 percent per annum. Rather than retail banking, it’s about bank retailing. To successfully execute this shift, banks need to restructure to better integrate customer-facing activities and to focus on: managing the experience (customer and employee); demonstrating intelligence (information and integration); and world-class retailing (transformational sales/service). While many banks have focused on one or two of these capabilities, few have undertaken them in an integrated program driven from both a customer and employee perspective.

Designing the Experience

Creating a positive customer experience is essential to enhance commercial effectiveness: the more the customer perceives the branch as a “great place to go,” the more it is possible to promote and develop commercial actions aimed at exploiting every contact opportunity. Customer experience is driven by two main factors: the physical environment and the way the service is perceived by the customer.

By applying consumer psychology theories and principles, it’s possible to divide the branch space into different areas and define the main functions and requirements of each area in terms of feeling and perceptions left to the customer.

Simultaneously, banks need to define an enabling employee experience, which focuses on the levers that impact individual performance. At the branch level, banks should align those levers impacting process and procedures, resource and capability management, application design and physical ergonomics.

Leveraging research, client experience and analysis of market leaders, Accenture has developed a set of customer and employee experience models that allows clients to systematically enhance the impact of each interaction against tactical and strategic objectives.

Integration and Intelligence

To implement Next Generation Distribution models, banks need to develop solutions that enable the most important business and technical requirements, including:

• a multi-channel integrated platform, open to the development of new channels/devices and to the integration of internal/external product factories;
• a global customer vision to allow an integrated view of customer cross-channels in terms of profile, products, contacts and behavior;
• campaign management tools to execute the marketing strategy planned by central units and to monitor results;
• event management to allow the branch to transform every client contact into a commercial action and selling opportunity, triggered by specific events;
• personalization tools to enable the one-to-one customer relationship across channels through an effective and homogeneous customer experience;
• multi-channel workflow to integrate single business tasks into complete processes with high levels of automation, to maximize branch operational excellence; and
• customer insight modules to effectively gather and analyze customer data, plan marketing campaigns, and monitor results versus budget at the organizational unit, role/employee, channel, product and customer/segment levels.

Accenture has developed several assets that address the need for integration, including the Customer Contact Framework (CCF) jointly developed with Microsoft. The CCF manages disparate applications in a unified desktop application. It integrates the interfaces, data, and workflow between legacy applications. Separately, Accenture’s Business Interaction Hub solution enables a full process re-engineering of the branch desktop. It also integrates sales, service, and administrative business processes through a sophisticated workflow/business rules engine. (Patent Pending)

Effectiveness: Measuring the Impact

In the Next Generation Distribution model, branch workforce functions, skills and capabilities should evolve according to the new role of the branch. The evolution of traditional roles and introduction of new professional roles should enhance sales, service and all product lines. It’s necessary to assign performance targets according to people’s tasks. But it’s not enough to define branch workforce roles. Workforce activities should be strictly monitored. The bank should define an appropriate rewarding system to link compensation to performance – an employee’s variable income should be strictly linked to clearly and easily monitored performance metrics.

To enhance workforce performance, banks need change programs to effectively manage cultural issues within the branch network. Banks should evaluate the real ability of the “commercial machine” to understand and use “innovation” in their change management programs (including training programs based on business simulation and a learning-by-doing approach).

Accenture has developed the Retail Bank Academy solution to support this pillar. The Retail Bank Academy integrates the critical processes of recruiting, learning and performance management. The program drives business results by aligning learning outcomes with business strategies. Accenture experience indicates that approximately 80 percent of the variability in individual performance can change by focusing on these areas.