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June 30, 2015

Enabling Workforce Management Solution in Bank Branches: Recommendations

In my last blog, I had posited that, a bank's branch channel transformation is incomplete without a robust technology-enabled Workforce Management (WFM) solution. This blog looks at how a bank can enable its WFM implementation.

1. Driver: Operations and not HR should drive WFM implementation initiatives. This is because, Operations has a better understanding of the channel's service delivery, productivity, and costs imperatives. It is important to note that Human capital management (HCM) and WFM are not one and the same.  While HCM is concerned with hiring, compensation management etc., WFM is all about the execution and optimization of the staff's efforts and productivity on a daily basis. To enhance ownership, all levels of branch operations should be involved from the early phases of a WFM implementation.
2. Technology: Enabling a robust WFM solution that has strong technical capabilities underpinning is crucial. Many WFM solutions that are still guided by archaic principles, lack optimal automation (e.g. manual data entry is required), require long lead-time for insights generation, have interoperability issues, and lack integration capabilities. The system's usability, flexibility, and agility are all key requirements for a robust WFM solution. The solution should be quickly deployable and require minimal training. It should integrate well with the General Ledger, HR, Origination, Marketing, Sales, CRM, and other systems, to allow for easy linking of the bank's branch performance with the workforce models and the staffing levels. Web-based WFM interfaces are also important for allowing the branch managers to forecast the staffing models according to their requirements and as per their convenience. Mobile enablement of WFM is also desirable in order to allow branch/division managers to review their workforce forecast and metrics on the go. Mobile capabilities would also let branch staff view and confirm their weekly schedules on the go.
3. Structured and phased approach: Basing the WFM business case on empirical evidence is crucial. In addition, the ROI assumptions must be validated against the results, post-implementation. A phased approach for WFM implementation is recommended - for example, a bank could first enable the core WFM functions around attendance and time. In the next phase, functionalities around scheduling, absence management, demand forecasting etc., could be implemented. Beyond that, eLearning, workforce analytics, desktop analytics, mobile self-service, and other advanced capabilities could be enabled.
4. Resource pooling strategy for branches could be considered. In this, a pool of regional branch staff is maintained by the bank - over and above its dedicated branch-wise staff. The resource pool staff can be deployed to different branches in the region at a short notice, and as per the urgent temporary demand (seasonal peaks, focused marketing campaigns, unplanned key staff absences etc.) thereby ensuring that a high service-level is maintained. The resource pool staff must be cross-trained on all applicable branch activities, services and products. WFM solutions should be capable of addressing the resource pooling needs.
5. Organizational Change Management is crucial for translating the WFO insights into tangible benefits for the bank. Leadership's establishing of the WFM priority is crucial. All stakeholders must be aligned upfront, with regard to its WFM strategy, objectives, and goals. A PoC trial at the onset is recommended, as it would help gain buy-in of all stakeholders; and help in understanding the key performance indicators, such as target staffing strength. The bank's initial staffing targets should be conservative. Once this is achieved with relative ease, they can revise the targets more ambitiously. Customer satisfaction measurements should also be kept track of diligently, at all stages of the WFM implementation journey - to make sure the WFM insights' implementation will not affect customer satisfaction adversely. Ensuring enterprise adherence to WFM is important. Banks must take due note of the WFM insights and take optimal workforce related actions. All branch aspects - service, sales, and operations - must be considered in the WFM model. For e.g. time tracking is just one aspect. Staff self-service capabilities, demand, and availability-based scheduling, customer service, and sales quality etc. are all important aspects. Outstanding staff performances towards achieving the WFM targets should be duly recognized. Communication and training aspects should also be focused upon. Banks can also consider having a "Workforce Management Chief" for driving continuous improvement on WFM strategy.
6. Leverage third party expertise: Banks should engage leading WFM solution vendors and consultants. Also, leveraging Cloud-based vendor solutions can help reduce the initial capital and in-house WFM expertise needs. Managed Services options can also be considered by banks - especially by the relatively smaller banks that are short of finances and staff. In Managed Services, the vendor enables the WFM solution in a hosted environment and themselves perform most of the day-to-day WFM analysis, reporting, and forecasting activities for the bank.

Where banks have taken a structured approach towards their WFM implementation, the gains have been immense. For example, the Commonwealth Bank of Australia could immensely improve its customer service by optimization of its consumer-banking workforce, leveraging the workforce optimization, desktop, and process analytics solutions from Verint. 

June 29, 2015

Look and Learn - Exploring ideas from outside the industry

Historically, financial services has produced limited indigenous innovation, with most new ideas coming from non-banking players. So, it is not surprising that banks have been proclaimed the most vulnerable to disruption from next-generation entrants and their technology-led business models. But even as they look to compete and grow in this environment, is there an opportunity to turn that challenge on its head by learning valuable lessons from outside players?

As an illustration, let's take the example of Netflix - how they redefined themselves as markets evolved and what banks and other financial services organizations can learn from their approach.

Netflix - Motion Picture

Netflix started as a subscription based DVD-by-mail service in 1997. By allowing customers to keep a DVD for as long as they wanted, without penalty, they shook up Blockbuster's monopoly on the home entertainment business. Around 2007, after the phenomenal success of their DVD-by-mail model, Netflix added a streaming delivery option.
By 2010, Netflix's streaming business started growing much faster than the DVD-by-mail business. Reading the tea leaves, in 2011, the company decided to offer standalone streaming packages and hive off the DVD business as an independent subsidiary (Qwikster) . This was met with a huge outcry from subscribers. Netflix lost ~800K of their 26 million subscriber base that year and their stock plummeted to $54 from a high of $295.
Yet, as we look at Netflix today, their customer base has grown to more than 50 million and the stock price is ruling above $400. The company has moved over 80% of their customers to the digital channel and is producing content that's winning wide recognition, forcing competitors like HBO to follow their lead.

So, what did Netflix do right?

1. Reinvent the Business Model - One of their smartest moves was to recognize the power of the internet for entertainment and an increasing customer preference for online content , apparent in the growth of their "streaming only" customer base. Netflix responded by introducing streaming only monthly services packages, and significantly raising the price of the "DVD + streaming" package to discourage the DVD delivery option. At that time, this was met with significant resistance, but Netflix stood their ground to emerge a much stronger player in the media space. This is a great example of a company that is willing to reinvent their business model and also transform their identity by going digital.
2. Control the Supply Chain - Netflix is one of the largest buyers of content rights, having spent over $3 billion in 2014. Recognizing that better margins and market positioning are achieved through content ownership, the company has turned producer of original content (as an example, the television series 'House of Cards'). This is tightening Netflix's control over the supply chain and enabling them to attract new subscribers and improve profitability.
3. Use technology to drive business - Netflix has made significant investment in a recommendation engine. Today, 75% of movie selection is based on recommendation, not search. The company has also made key investments in ensuring speedy and uninterrupted delivery of entertainment by becoming the largest public cloud user (using AWS) and leveraging DevOps across the organization.

What Financial Services Companies can take from Netflix

1. Digital Transformation will require significant shake up of business models - Currently , most banks are focusing digital investments primarily on enhancing user experience. This needs to be significantly augmented with changes to business models, processes and value chains.
Today, there are very few examples of new digital business models in financial services, besides   Internet Only Bank - ING Direct, Capital One 360 and Robo Advisor, Charles Schwab's Intelligent Advisor. FIs need to create more business models that leverage the digital paradigm. 
2. There's a need for setting up and nurturing new supply chains - A classic example of supply chain control in financial services is the closed loop card processing done by AMEX and the insights they bring to their merchants leveraging the same. Chase launched ChaseNet, their merchant services offering in partnership with Visa to achieve similar control of their supply chain. ChaseNet, along with Chase Paymentech, ChasePay and ChaseOffers, enabled JPMorgan Chase to post $848 billion in merchant-processing charge volume (total amount charged by Chase merchants)  last year, up 81% from $469 billion in 2010.
3. Adopt evolving technology paradigms - Netflix has been a significant adopter of new computing paradigms, namely, the Recommendation Engine, Platform as a Service, Public Cloud and DevOps. This helps them meet ever evolving customer demand. Banks have similar opportunities to leverage technology to shake up business models, in the shape of Analytics, Digitization and Mobility.

Digital Transformation is forcing a new business order.  Its imperative upon Financial Services companies to redefine their business model to take advantage of evolving technologies like Netflix has done.

June 10, 2015

Workforce Management technology a must for true branch banking transformation?

While globally, consumer banks are focusing on transforming their digital channels (online, mobile); the branch channel would continue playing a crucial role. Branches would remain an important channel for banks to connect with their key customers, provide bespoke advice, and drive the bank's revenue and customer satisfaction. Although; to reap the maximum benefit, the future banks' branches need to be digitally transformed and have stronger multi-channel integration.

In years to come, the branches of proactive banks would offer a combination of state-of-the-art lounges equipped with Wi-Fi, Social features, digital queuing system and display, self-service kiosks, tablets for the customer-facing staff, video conferencing capabilities, kiosks and smart ATMs, video-tellers and many other innovative digital capabilities.

Amidst all these, a bank's branch transformation would still be incomplete without a robust technology-enabled Workforce Management solution. Workforce Management solution can provide a bank competitive advantage through the enablement of an integrated central staffing for the bank's branch, customer support center, call center, back-office operations etc. After all, for any organization, optimally engaged and skilled employees are its most valuable resource.

Why Workforce Management solution?

At a minimum, by using robust Workforce Management solution a bank can:

  • Efficiently forecast, plan, and schedule branch, call center and other back-office staffing requirements. Scheduling preferences and self-scheduling capabilities can also be enabled. The bank would be able to plan the deployment of staff in optimal numbers, at the right place and at right time. 
  • Reduce wait-time by minimizing under or over-scheduling of staff.
  • Revise its staffing forecasts and staff performance goals in real-time, based upon the staff-related KPIs. The staffing forecast would automatically consider historic staff performance data, workload information, as well as staff experience and skills attributes.
  • Reduce staff absenteeism costs, excess over-time, or leave liability.
  • Enhance staff satisfaction; with scheduling based on a staff preferences and availability, especially for the part-time staff.
  • Achieve cost and efficiency optimization with "shared" staff that can be deployed across any of the branches in the region, depending on the workload forecast.
  • Consistently enforce all workforce related policies.
  • Release branch managers' time by automating human resource management and administrative activities with the Workforce Management solution. Managers can now focus on more strategic activities like liaising and up selling to high value customers, and growing the bank's business.

More capable and advanced Workforce Management solutions can further help a bank in:

  • Staff coaching: Enabling robust workflow for staff coaching assignment, delivery, and tracking with individual evaluation and KPI scores generation.
  • eLearning: Providing automated training, delivered at the staff desktop at optimally planned times. This helps to keep staff continually updated on their evolving skill requirements, bank's processes, products, new regulatory requirements, and other relevant information.
  • Performance visibility: The unified solution can enable end-to-end visibility on staff work and processes. Branch managers would have a deeper understanding of their staff performance. Standardized frameworks for efficiently managing and improving the team and individual staff performance can be enabled. The solution can also aid in identifying training and execution issues. The customizable role-based staff scorecards and the predefined KPIs would aid staff in judging their performance against their goals.
  • Desktop Analytics capabilities of the solution can help the bank monitor and enhance its staff performance with the capture and measurement of their desktop application activities. Objective visibility into the staff's work performance at their desktop would be provided. Real-time guidance to staff can be delivered, as needed.
  • Identity management capabilities of the solution would help identify fraudulent callers to branch/call center. Customer-staff interaction security would also be enhanced.
  • Quality Management is enabled through secure capture, encryption, and archival of staff calls and screen interactions. The archives can be easily searched and replayed for liability protection, compliance, analysis, and general quality management. Efficient selection and evaluation of a large numbers of customer-staff interactions across numerous touch points can also be enabled.

What are your views on the role of a Workforce Management technology solution in the transformation of a bank's branch? I am keen on hearing your thoughts.