Last year, I stopped in at the retail branch of a large North American bank. I saw three tellers — and no customers.
This misallocation of resources is not unusual. It is a well-intentioned example of one of the four biggest myths and miscalculations prevailing in today’s bank operating practices. These myths lead to needless downtime, duplicative work and overservice—all of which are equally costly, whether they occur at a bank or on a factory floor.
The first myth is that there are negligible gains in efficiency or savings to be achieved in the retail branch network. Salaries there are already low, the theory goes, and staffing models are already in place. Many banks are eager to emphasize their customer service by promising virtually zero wait time.
In reality, the front office houses some of a bank’s most durable and robust business procedures. When viewed as production processes, numerous improvements are available.
For example, front-office executives frequently resist partnering with the back office to jointly develop standard product and service offerings. Sales producers are then tempted to improvise, unnecessarily squandering countless hours on customized one-off solutions. Another common issue is that a bank’s most effective revenue generators frequently fail to realize or explain the tactics they have employed to become successful. As a consequence, best practices are hopelessly diverse, subjective and unsupported by facts.