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Understand the Universal Banker Model in 3 Minutes

Blog Post
July 16, 2020

As the role of the traditional bank evolves amidst the ongoing shift to a digital world, financial institutions must add value for their customers across every channel.

Both online and in-person experiences must be exceptional to drive customer loyalty: Millennials are two to three times more likely to switch banks than any other age group. For banks, one way to increase customer retention across all age groups (while also increasing profits), is to adopt the universal banker model.

Here are the most important things to consider when deciding if the universal banker model is right for your financial institution.

The Universal Banker Model Explained

The universal banker model has been around for years but has recently begun to increase in popularity because of emerging technologies. Online banking, for example, allows customers to complete many transactions through their smartphones or computers, rather than going to their local branches. There is also new technology available within branches that reduces the workload for tellers.

To truly take advantage of these changes, many banks are opting to use the universal banker model. Rather than having tellers only execute counter transactions, they’re trained to provide more services for customers.

Not only does this put tellers to better use as their existing responsibilities decline, it also provides a more streamlined experience for customers. In many branches, customers must ask a teller about a more sophisticated financial product and wait until a financial advisor is available.

The universal banker model creates a faster, more personalized customer experience.

Benefits of the Universal Banker Model

When it comes to increasing conversions at a branch, it’s vital to remove any source of customer friction that prevents an individual from moving through the sales funnel. The universal banker model reduces customer friction by streamlining the customer’s experience within the branch and by minimizing customer wait times.

It also creates efficiencies with teller processes, especially when used in conjunction with technology. This could include cash automation devices and online video conferences with customers. Some companies are even beginning to experiment with using AI as virtual tellers to assist customers with basic questions and tasks.

Another benefit of this strategy is that it can help drive employee loyalty within your bank. The model offers more opportunities for growth than having your best talent remain in a stagnant teller position.

Banks can also save money by using less commercial real estate space. You can either make the teller counter less prominent or remove it altogether. Compared to a traditional bank, banks using the universal banker model are between 500 and 600 square feet smaller.

Ultimately, making the switch to a universal banker model can lead to higher profit margins during a time when banks across the country are closing more and more branches due to low transaction volumes.

Challenges of the Universal Banker Model

While some employees may appreciate the development opportunity that the universal banker model provides, some staff may be resistant to change. As with any kind of restructuring, you need to hire the right people or retrain existing staff—or both. And both options take time and financial resources to accomplish.

Regardless, it’s important to educate your employees about why these changes matter and include them in the transition process as much as possible. With the right approach, you can minimize employee turnover and actually turn it into a positive experience.

The universal banker model isn’t designed as a solution for all types of financial institution branches. For example, it’s not an ideal model for branches with high volume counter transactions like deposits. In this scenario, you would essentially be paying higher salaries to universal bankers who essentially perform a teller’s job.

Is the Universal Banker Model Right for Your Bank?

The universal banker model can provide plentiful growth opportunities for many banks in the United States, but it may be best suited to low-volume banks.

You need to be able to invest in both your staff and your technology to streamline processes and maximize profits. It’s important to create a step-by-step plan of how your bank plans to implement this new model. That way, you can anticipate the questions and concerns of both employees and customers, and effectively demonstrate the benefits expected from the universal banker model.

Check out our white paper detailing the challenges of financial institutions that you face today and how some of the biggest players are responding.

Download White Paper

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