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Oct 10, 2018


In this episode we will discuss how Financial Institutions can bridge the physical and digital worlds to create a convenient, unique experience for their customers.



COMMERCE NOW (Diebold Nixdorf Podcast)


Amy Lombardo:                00:00                    

Hello again, this is Amy Lombardo, your host for this episode of COMMERCE NOW. Our title is cleverly named Human Vs. Machine: How Can They Coexist? And I'm joined by Chris Gill, our Senior Director of Global Advisory Services. We are going to have a conversation all around the concept of the human interaction and how it finds that balance with the ATM. Hey, Chris.

Chris Gill:                             00:00                    

Hey, Amy.

Amy Lombardo:                00:28                     

Thanks for joining me.

Chris Gill:                             00:29                    

Glad to be here.

Amy Lombardo:                00:30                    

Before we start with our questions, let's just talk about the term "branch transformation," okay? It's been the buzzword in the financial industry for, what, 10 plus years?

Chris Gill:                             00:41                    

Mm-hmm (affirmative), mm-hmm (affirmative).

Amy Lombardo:                00:43                    

In 2018, what does branch transformation mean for bankers?

Chris Gill:                             00:48                    

Well, I think increasingly it really means the transformation between the physical as well as the digital channels. I mean, 10 years ago, if you thought about branch transformation, we didn't have the adoption of mobile banking back then and as much online banking, and the sophistication of what you can offer on a self-service device today. Branch transformation today means, I think, something different than it did 10 years ago. It's really about that connection of the human versus the physical channels in a branch environment, and how you transform not only the technology, but also the way you engage with customers and the experience that you provide is really part of what branch transformation is all about today.

Amy Lombardo:                01:30                    

Even though it means something different, it's still relevant, right?

Chris Gill:                             01:35                    


Amy Lombardo:                01:36                    

You're still having the number of conversations that you would have had 10 years ago, it's still the same now, right? It's just bankers are asking for maybe different solutions, different recommendations?

Chris Gill:                             01:48                    

Well, the reason why it's still relevant is still that a significant percentage of institutions have not yet transformed their branches. Because there are a lot of legacy branches, older branches where it's not as easy to transform those as opposed to newer locations. If everyone had transformed their branches, we wouldn't be having this discussion today, but a lot of institutions still haven't made the difficult decisions to really change the way their branches operate today.

Amy Lombardo:                02:17                    

If they haven't made those decisions, is it because of the size, the number of locations that they have? Does that play into it as well?

Chris Gill:                             02:27                    

Well, for some institutions that maybe have a lot more branches, that could be a factor. I do think a lot of it is around the leadership of the organization and the strategy they want to pursue ...

Amy Lombardo:                02:38                    

Got it.

Chris Gill:                             02:38                    

... and their willingness to make some hard decisions and move forward with a new program. There's a lot of inertia in the banking industry that just leads to the pace of change taking a long time. Also too, there are a lot of legacy systems that impact your ability to transform your branch, and making changes to those is very time consuming, so a number of different factors.

Amy Lombardo:                03:00                    

Got it. Okay, so you and I, we're sitting together, we're here in Las Vegas. We happen to be running this podcast live from our TAG picks event. I'm looking over some of the content of a presentation that you had given, and we're talking about an FI's having a comprehensive analysis to help understand their branch technology roadmap. You are talking about four steps in this technology roadmap. Can you walk-

Chris Gill:                             03:29                    


Amy Lombardo:                03:29                    

... our listeners through what those for are and what it means?

Chris Gill:                             03:33                    

A successful branch transformation plan really requires upfront analysis around your client segments. How do they transact with each day? How is it different from one branch to the next? Understanding your markets and the characteristics of consumers and businesses in those markets. Then from there, it's really understanding how your branches operate today, and what kinds of transactions are your customers doing in your branches? Because that will have an impact on What kind of technology you need to deploy and the kind of functionality that you offer as part of that, so understanding branch operations is important.


Then from there, once you've done the in-depth analytics, you can really identify key opportunities to move forward with to transform your branch and digital channels, and understand which of those are higher priority to implement than others. Then the fourth step is then, develop really a multi-year roadmap on how to move forward in kind of what order. Then looking at the return on investment on the plan that you've come up.

Amy Lombardo:                04:32                    

All right, so let's talk a little bit about the analysis part that you mentioned, that first part. Can you review some options that FIs have when they're executing a transition to different types of branch technology?

Chris Gill:                             04:45                    

I think most institutions do not really understand that there are some customers that are more self-service oriented and there are others that are more branch oriented, and how that varies from one branch to the next. Because if you have a branch or in a market area where you have a high concentration of, or self-service oriented kinds of consumers, then your strategy in a market like that needs to be different than in a market where you have a lot of people that only come into the branch and don't use self-service. The kind of technology you deploy and the kind of people you want to have in those different branches needs to be different. You need to have that in-depth understanding of your customers and their transaction characteristics in order to come up with that strategy.

Amy Lombardo:                05:29                    


Chris Gill:                             05:30                    

Because if you don't have that, then the risk you run is you're deploying new technology in a market where your customers are not ready for it. Then you don't get the adoption and return on that investment. Or you roll out one new technology in a market, but those customers at that market also use another branch that doesn't have that technology. It creates this customer confusion, and is an inconsistent experience from one location or one ATM to another. It's important to really understand how customers use different locations.

Amy Lombardo:                06:08                    

Right. How would you mitigate that risk then of, I would almost say, call it consumer confusion of what they need to do when they walk into a branch or they go up to an ATM?

Chris Gill:                             06:20                    

Well, I think the key is, number one, doing the in-depth analytics to know and understand your customers in a greater level of detail so that you have the right plan that addresses that cross- branch, cross-ATM usage. Then secondly, from an implementation point of view, you need to have the programs in place so that the people in one location are doing the same, demonstrating the same behaviors and the same processes that they do in another location. I mean, no different than walking into a fast food restaurant or chain and you have a different experience in one part of town than you do in another. That would not be a good experience. Certainly in banking, you want to have a similar experience across locations.

Amy Lombardo:                07:03                    

We've talked about it a little bit from the consumer side to say, "Okay, consumers have different ways to engage with the channels," but take a step back from the operational side. What are the benefits to the actual financial institution by going through a branch transformation strategy?

Chris Gill:                             07:22                    

Well, there are obviously several. Obviously, number one is better managing your costs. I mean, if you look at branches overall, for most institutions, the branch represents anywhere from 60 to 70% of their total operating costs. In a very competitive environment where growing revenue can be challenging, better managing the cost base is key. I think costs are one. Secondly, if by enhancing the customer experience, you're going to potentially differentiate yourself against the other institutions in the market, and that can lead to helping you acquire more customers or strengthening the relationship that you have with the customers that you have.

Amy Lombardo:                07:59                    


Chris Gill:                             07:59                    

It's a combination of those two things, and costs and the enhanced experience leading to more revenue.

Amy Lombardo:                08:06                    

Got it? Yep. It's interesting, with all the social media that we have out there, I'll occasionally see posts where someone says, "Boycott these kiosks. Boycott this," whatever piece of self-service technology. "It's cutting jobs."  Really, what you're talking about here is that it's an opportunity to move people around, give different roles. Because that person who may have been operating that teller line maybe could be more suited for someone who's more in a universal banker role, right?

Chris Gill:                             08:34                    

Right, exactly. Well, and that's a question that often comes up where the branch staff may perceive that the technology is a risk to their jobs.

Amy Lombardo:                08:43                    


Chris Gill:                             08:44                    

Why would they tell a customer to go use an ATM, "Because then they're not going to come see me, and then therefore I'll be out of a job," but it's your job ... What you need to tell the teller or the banker is that, "Your job is going to change, and we want you to spend more time talking to customers, and more time understanding their needs so that we can become a trusted advisor for the customer and not just doing it from a transactional point of view."

Amy Lombardo:                09:10                    


Chris Gill:                             09:10                    

Because ultimately, loyalty to a financial institution is going to be much more around the relationship and the value that the institution provides in managing your finances, than it is going to be for doing a transaction and making a deposit. That's not a loyalty generating type of interaction.

Amy Lombardo:                09:30                    

Chris, why don't you tell me a little bit now about some of the specific technologies that banks can deploy that can enhance that experience, but also find that balance between the human and the terminal itself.

Chris Gill:                             09:42                    

Sure. I think there are really three technologies that institutions are looking at to really leverage technology, but with that kind of human touch, human interaction. Some institutions are moving more to this assisted service kind of model where they have in-lobby, self-service devices that provide more advanced functionality, and they have a person in the lobby who would greet a customer and then show them how to do their transaction on the self-service terminal. No different than at the airline, at the airport where at an airport, a gate agent is going to show you how to use the kiosk-

Amy Lombardo:                10:20                    

Use the kiosk, to check it. Yeah.

Chris Gill:                             10:21                    

... Or in a fast food restaurant where they have a self-service ordering, where there's someone there to help you.

Amy Lombardo:                10:26                    

You know what? Sorry to interrupt you for a second, but I made that connection in my head that there are so many of these retailers, almost, they're like indirectly helping train-

Chris Gill:                             10:39                    

Exactly, exactly.

Amy Lombardo:                10:39                    

... banking consumers, because that technology might not be as relevant or as often seen in branches, but any McDonald's you go into now you've got the kiosk.

Chris Gill:                             10:52                    

Well that's the thing. Like you go into any Home Depot, any Lowe's, any Giant Eagle or whatever supermarket, they have the self-service technology-

Amy Lombardo:                11:00                    

Scan and go.

Chris Gill:                             11:01                    

They've got four to six kiosks and they have someone there. If you're having a problem swiping your lettuce, they can come in and put in the code. I mean, so these other industries are really paving the way for banks and creating ways to do things differently.

Amy Lombardo:                11:15                    

Have you found that to help you then in your consultation services, that the bankers can make that connection to these other industry examples?

Chris Gill:                             11:26                    

Well, and again, I think there's all the bankers you talk to, they get that because they see that in their daily lives, but making the leap from that to changing your branch is a big chasm.

Amy Lombardo:                11:39                    


Chris Gill:                             11:40                    

Because a lot of people ... Well, that's going to require changing a lot of things. Because Sally, the teller, that's working in that branch today may not be the right person to be in that branch and, "We may have to make some personnel decisions, and we may need to remodel the branch, and change some of our policies," and so on and so forth, "Change the facilities ..."

Amy Lombardo:                12:00                    

That's a good point, yeah. 

Chris Gill:                             12:01                    

There's a lot of ... Branch transformation is not easy. It's funny though, because it just seems like, it just seems logical that we ought to do that then.

Amy Lombardo:                12:08                    

Or people just think, "I'll just swap this piece of technology, and then it'll work."

Chris Gill:                             12:12                    


Amy Lombardo:                12:13                    

There's, yeah ...

Chris Gill:                             12:13                    


Amy Lombardo:                12:14                    

It's a fine line, It's a balance, right?

Chris Gill:                             12:16                    

Right, right. Yeah.

Amy Lombardo:                12:17                    

Okay, so you were giving me some examples. So ...

Chris Gill:                             12:20                    

Right, so ...

Amy Lombardo:                12:21                    

We went on the tangent about the kiosk.

Chris Gill:                             12:23                    

Right, so there are in-lobby, self-service devices that are in the lobby of a branch. Customers come in and they're greeted, and then the branch staff can walk a customer over there and show them how to do the transaction in a self-service fashion. One of the things that we've learned are, consumers like to learn from someone that they trust that can, who can enthusiastically show them how to do things a new way. If you just point someone to an ATM and say, "Oh, just do it over there," the rate of adoption is going to be much lower. If you have a well-educated, a knowledgeable, enthusiastic employee who can talk about the new way of doing things, that makes that level of adoption that much higher.


One model you'll see in the lobby, self-service. Another would be upgrading ATMs to more advanced functionality, whether it be check imaging, so removing the envelope. Or personalized screens, so you can select your fast cash amount and not have to change that every time. There are a number of things you can do there. Then the third thing is adding a video dimension on an in-lobby or an ATM, so that you can talk to a video agent in a call center if you need help doing a transaction. Or in some cases, they can do the transaction for you.

Amy Lombardo:                13:36                    

Okay, so video is my like hot topic, because I had a conversation with a gentleman this morning and asked him his view on video. Now, you share with me the Chris Gill view on, to a video at the ATM. Is it here to stay? Is it ... What's our value prop there?

Chris Gill:                             13:58                    

The most successful institutions with video to date, video has been a key component and it's been well integrated into their overall delivery strategy. There's one institution that basically eliminated tellers at all of their locations and replaced them with video, and that was a key part of their strategy. What doesn't work is what I would call "lemming behavior," where just because another institution in the market has video means you need to add video. That is not a recipe for success. Again, going back to the beginning of the podcast where we talked about having a strategy and figuring out what makes the most sense for your network based upon your customers and the markets and your branches, you have to do the same thing when you're thinking about video.

Amy Lombardo:                14:45                    

Got it.

Chris Gill:                             14:45                    

Because if you have, if you operate in a market where you have a high concentration of younger consumers that are more likely to be amenable to video, as opposed to an area with a lot of older consumers that are the least likely to want to use video, then you need to know that going in, rather than just making ... Video is not a one size fits all, do it everywhere kind of solution.

Amy Lombardo:                15:09                    

Got it.

Chris Gill:                             15:10                    

Okay. Then, so there are some specific use cases that we think are more relevant. For example, video in the drive-up. Converting all the video or all the pneumatic tubes to video lanes, and you'll have a consistent video transactional experience in their drive-through can help improve efficiency and reduce the costs. Or if you are building a newer branch and you don't want to have five staff there, you could have video terminals doing the transactions, and you have two or three staff there that are there for account opening and the like. There are different use cases for it, but we would argue that there are other enhancements in self-service that would drive a better return. Things like denomination selection, in core integration and personalization. Enabling check cashing, tablet integration, that would enable other transactions like over the limit withdrawals and such. If we're looking at it from an ROI basis, we would suggest there are other options that would drive a better return than video, in most cases.

Amy Lombardo:                16:17                    

Got it. Had to ask you on the video. All the technologies that you've talked about here, you've worked with the institution, they've defined some of these steps and they're going into the actual implementation. Talk a little bit about the staff side of it now, and how you kind of define that ideal experience then.

Chris Gill:                             16:40                    

Well, when you're deploying new self-service technology, there a number of key factors that you need to be thinking about. One is really around the whole experience you want to provide in a branch that's got different self-service elements, and defining the experience, defining the customer journeys, and then creating the appropriate lobby management strategies so you're engaging customers when they walk in. There's a whole experience in process element. Secondly, is really around preparing the employees for that new environment. The third is around where you place the technology, and what kind of functionality is available on those devices.


Just speaking about the employing readiness specifically, what we have found is that way more often than not, branch staff do not use the technologies that the financial institution actually offers, whether it be using the ATM for depositing, or making a mobile deposit, or doing person-to-person payment.

Amy Lombardo:                17:35                    


Chris Gill:                             17:35                    

It is shockingly low, the incidence of branch staff actually using those technologies. My team, we've actually done surveys, starting a project to branch staff, and we found like 80 to 90% of branch staff have never made a deposit on an ATM.

Amy Lombardo:                17:52                    


Chris Gill:                             17:54                    

Yet, this institution is rolling out-

Amy Lombardo:                17:56                    

They're trying to introduce this.

Chris Gill:                             17:58                    

They've already rolled it out-

Amy Lombardo:                17:59                    

Oh, boy.

Chris Gill:                             17:59                    

... and their staff still 80 to 90% don't use it. Or there's another bank that we work with that told us that only 1% of their branch staff ever made a deposit on the mobile phone, on their bank's app. Again, the branch staff are the biggest drivers of customer adoption of your new solutions. If they can't, they don't use it and can't explain it, then how are they going to talk to a customer about it?

Amy Lombardo:                18:25                    

It's like putting a fancy stand mixer in your home, but you've never made cookies before.

Chris Gill:                             18:30                    


Amy Lombardo:                18:30                    


Chris Gill:                             18:30                    

Right. Exactly, exactly. Multiple things to consider here. Number one is, how do you use, how do you do the transaction? What's the Screen flow? First you put the check in, then it's going to give you an image on the screen. You confirm, so on and so forth. You have to understand that. The other thing is you need to understand, what if there's a problem? Like what if the check were to jam or the cash jams, what happens there? Because if the branch staff are uncomfortable in how to resolve the issue, then they may not be comfortable talking about it at all. They need to be comfortable with both the functionality, the troubleshooting and then also importantly, they need to understand you can't talk about technology in the same way to a millennial that you talk about it to a 70-year-old person.

Amy Lombardo:                18:30                    


Chris Gill:                             19:16                    

You need to have a different way of explaining the technology. A lot of these branch staff that are more millennials, they can't talk to you about the technology in the same way they would talk about it with one of their parents. Again, I think it's imperative that number one, you train the branch staff on how to engage with customers. How to leverage the technology and how to deliver it in such a way that you're not forcing them to use the technology, but you're providing a value add so that the customer feels like you're adding value to their relationship. Beyond that, it's also important, you want to make sure you have the right people in the branch with the right skillset. Right?

Amy Lombardo:                19:59                    


Chris Gill:                             20:01                    

One of the things we advise our clients is that ... One of the key job requirements in a job description needs to be, "Must be knowledgeable in ATM, online and mobile banking." You'd be surprised at how few job descriptions we come across actually have that as a job requirement.

Amy Lombardo:                20:16                    

Oh, that's a good point.

Chris Gill:                             20:17                    


Amy Lombardo:                20:17                    


Chris Gill:                             20:18                    


Amy Lombardo:                20:19                    

Or, likes to talk to people.

Chris Gill:                             20:21                    

Right, right. Then just another side note, interesting. As a leader of the bank and the credit union challenge the leaders to actually ask their staff, "To what extent do you use ..." The leaders on their team, "To what extent do you use these technologies?" Because we've heard stories of the head of retail banking asking his direct reports to show their mobile bank's mobile app and most of them could not do that.

Amy Lombardo:                20:47                    

Oh, ouch.

Chris Gill:                             20:48                    

If the leadership don't use your app then-

Amy Lombardo:                20:51                    

Yeah, sure. Leads by example, right?

Chris Gill:                             20:52                    

... It's not sending a message, an example for the rest of the organization.

Amy Lombardo:                20:55                    


Chris Gill:                             20:56                    

I also think we need to be thinking about customer journeys. It's one thing to talk about delivering a great experience, but what does a great, what does a customer journey look like? It's one thing to talk about customer experience at a high level, but it's important to really think through like, "What are some of the more important journeys that your customers engage with you on?" Coming into the branch, make a check deposit, and what does that journey look like from the time they enter, to the time they do the transaction, to the time they leave? What does that look like today versus what would you like that to look like in the future? Then, what are the people, process, design and technology requirements to deliver that journey? It's important to really map that out.

Amy Lombardo:                21:35                    

I think that's probably a good way to close this conversation. The people, the process, the technology .... I lost the fourth one.

Chris Gill:                             21:35                    


Amy Lombardo:                21:42                    

There we go, design. That you really need to consider all those components here when when you're looking to engage on a branch transformation project.

Chris Gill:                             21:51                    


Amy Lombardo:                21:51                    

Thank you, Chris, for joining me. Happy birthday to you.

Chris Gill:                             21:51                    

I thank you, thank you.

Amy Lombardo:                21:55                    

I just learned that as people are walking by. They're wishing you a happy birthday, so you're in Vegas. You can go live it up tonight.

For more information on branch transformation, go to, and keep checking in for next episodes of COMMERCE NOW.