Western Independent Banker - March/April 2009 - (Page 31)

By Eduardo Alvarez Managing Your Branch Network Capital DESPITE THE GREAT technological advances of our cyber-era, bank branches remain one of the most effective channels for the acquisition, retention and development of customer relationships. The branch facility possesses an even greater importance during uncertain economic times. As some of the larger financial players merge or downsize and as the mortgage crisis intensifies, customers will continue to seek reassurance, security and comfort from their bankers. Most of this interaction will take place at the local branch level. However, this does not obscure the fact that the development and management of the branch network requires serious investment, both from a financial and human capital point of view. While over the past five years 10,000 new branch facilities have been built across the U.S., the market and the current economic climate point toward a more judicious approach to branch network optimization. As branch expansion has escalated over the past few years, many institutions have chosen to ignore the upkeep and upgrade of older branches in their network. This is a serious oversight that sends negative signals not only to the markets being served, but to the bank’s staff as well. While some branch facilities will never exploit their potential, many others are just dormant and in need of a jolt to push them to greater performance. To successfully address the needs of these legacy branches, bankers should conduct a strategic exercise that analyzes the totality of the bank’s retail delivery and focuses on the three main integrative aspects of a network: • The Brand, as defined by the images and perceptions that one associates with an organization, the way you go to market, and the way in which you differentiate your offering to create loyalty. • The Place, as defined by the physical (and in some instances virtual) platforms in which an organization interacts and conducts business with its customers. • The Culture, as defined by the values held in common among staff as to the purpose of the organization and its methods to connect customer needs with products and services provided. The integration of all three components leads to the creation of a differentiated customer experience, as well as to greater competitive advantage. This does not mean, however, that every branch location needs to receive the same exact treatment or level of investment. By developing a unique set of tools that address the brand/place/culture triad, the bank will be able to unify its image and customer experience to levels consistent with those newer locations that have received a more substantial investment. Although there are several ways to approach this issue, several industry players have established an intervention hierarchy that takes into consideration, not only a branch’s current performance, but its desired potential. While some mature branches may get a quick makeover to conform to a particular brand’s image, other more promising locations may receive a more robust, and thus more costly, remodel. By surveying and acting upon this legacy network, financial institutions will be able to discover more efficient ways of allocating capital. Like savvy retailers everywhere, bankers are beginning to examine, in a more systematic manner, the ultimate payback of capital spent in specific retail locations that they build or inherit. Although consistently calculating the actual return on these projects will depend on the particular nature of data gathering By developing a unique set of tools that address the brand/place/culture triad, the bank will be able to unify its image and customer experience to levels consistent with those newer locations that have received a more substantial investment. Western Independent Banker March/April 2009 31

Table of Contents Feed for the Digital Edition of Western Independent Banker - March/April 2009

Western Independent Banker - March/April 2009 Contents A Message from the President & CEO Profitable Liquidity: Yes, You Can Non-Performing Assets: The Keep Versus Sell Decision Is BOLI the Way to Go? The Troubled Asset Relief Program and Its Eff ect on Executive Compensation TARP Money or Not, Secondary Offerings Belong in Your Plan 52nd Annual Conference Private Equity: Another Capital Option Strengthening Your Bank’s Bottom Line by Adapting to Difficult Times Managing Your Branch Network Capital Dealing with a Hard Insurance Market WIB Service Corporation Report WIB Calendar New Members Index of Advertisers Advertiser.com

Western Independent Banker - March/April 2009

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.