The branch boom has arrived, conquered — and now the financial services industry is facing the consequences. While retail networks have exploded over the past five years, the remodel or expansion of flagship locations, main offices and operations centers has been delayed as financial institutions — including many credit unions — have allocated fixed asset investments to branch growth.
These same institutions are now feeling the operational pain of overcrowded main offices and operations centers, in addition to becoming aware of a virtual wall that has been built between their frontline retail-focused branches and their transactional oriented back-office operations.
Many organizations that promote a retail member experience are not “walking the talk” when it comes to their own operations — thus causing a significant disconnect internally, according to Kevin Blair, president/CEO of NewGround, a design/ build and retail services firm.
“There has to be an emotional connection between the frontline staff and the back office support team in order to effectively deliver a dynamic member experience,” Blair said. “A division between the two undermines the whole experience.”
Repercussions from neglecting back- office operations come in the form of high employee turnover rates, lower employee morale and a dissatisfying member experience.
“When your back office is not aligned with your frontline, members will experience breakdowns in your brand promise, said NewGround Employee Education and Culture Change Director Rebecca Doepke. “Mistakes with accounts, missed member commitments, delays in processing and lack of sensitivity to internal deadlines all result in one thing — lost member confidence.
“The result is lost member relationships.”
In order to deliver a total member experience, credit unions must align their frontline retail experience with their back office operations. The back office personnel must live the brand and deliver it to the frontline.
Recognizing NewGround’s ability to help credit unions achieve this, CUcorp recently formed a partnership with NewGround so that Michigan credit unions will have discounted access to its myriad of architectural design, construction management and branding services specifically designed for the financial services industry.
NewGround, offers credit unions strategic insight and solutions to develop and deliver a more powerful member experience, according to MCUL Strategic Solutions Consulting Vice President Alan Babcock. The firm capitalizes on its 93 years of experience to help clients increase the power of their brand, design and build new retail branches or operational facilities, and evolve their cultures to better deliver their core values.
“NewGround’s breadth of services and integrated delivery sets it apart in the industry, and ensures the best experiences for credit unions and their members,” Babcock said.
A Credit Union Doing It Right
The DHCU branch design and materials are carried over to the operations center to create a consistent brand image and unify the frontline and back office employees.
A case in point is DHCU Community CU, based in Moline, Ill., which recognizes the importance of its back office employees and the integral role they have in cultivating and delivering a satisfying member experience.
“Convenience is an important aspect of serving the member — but it’s really about the experience our members have in the branch, and the back office plays a critical part in the delivery of that experience,” said DHCU President/CEO Terry Brahm.
DHCU partnered with NewGround to create an environment that communicated its brand promise, facilitated the delivery of an incredible member and employee experience, and enhanced its back office employees’ attitude towards their jobs and the service they offer to members, Brahm said.
The credit union’s dynamic growth over the past 10 years had caused its operations support staff to be overcrowded and operationally dysfunctional. Back office operations needed to be consolidated and aligned with the frontline employees and member experience.
Planning for the Future
Facility programming and personnel and space planning are critical to the remodeling or new construction of a main office or operations center. When building branches, only the member experience aspect of the facility has to be considered. In contrast, when planning a new headquarters or operations facility, credit unions need to consider the functionality of the building in addition to the retail experience.
The design of a main office has to account for the current operations requirements as well as projected growth, and the impact it will have on back office departments responsible for maintaining member service functions.
“Too often we see operations centers that did not adequately plan into the future, and therefore did not allocate adequate space within each department,” Blair said. “The result is that the building is under-built to meet their long-term needs. The credit union should construct a facility that meets at least a projected 10-year plan. Any shorter period is a huge strategic mistake.”
In addition to future growth projections, credit unions also need to consider depart-mental adjacency factors, employee needs and possible new services. Organizations need to evaluate how each of these components will impact the collective whole.
“Each department manager should be asked what they would like to have if there were no constraints on budget or space,” said NewGround Business Administration Vice President Bill Dean. “Their answers often provide an insight into areas or issues in the department that would not be brought up in a standard discussion.
“They might also address external or internal issues that might not be department-specific, but more global within the organization.”
Bringing in the Brand
Branding the back office is a relatively new concept within the financial industry. Most operations centers are utilitarian and sterile. But, according to NewGround Interior Designer Kathryn Brucker, a credit union’s brand has to translate throughout its whole organization to create a consistent delivery and a synergy.
“Financial institutions have to find the right comparable architecture and design, so there is a connection between the operations center and branches,” said Brucker, who worked on the DHCU project.
At DHCU branches, NewGround connected to the credit union’s heritage of manufacturing farm equipment. The branches replicate a rural mill or factory with stain-embossed concrete floors, an exposed primer red steel structure, high unfinished exposed metal roof panels and concrete block.
These rugged materials provide a backdrop to dynamic retail communications and graphics. Warm, stained wood softens the experiences at member service counters, teller lines and offices. The branch design and materials were carried over to the operations center to create a consistent brand image and to unify the frontline and back office employees.
The Employee/Member Connection
“Developing your culture means everyone, including the back office, has to understand the organization’s brand promise,” said Doepke.
The back office of a credit union needs to understand what the credit union provides members, why they do it and what it means for the members. “Training your back office, branding them and aligning them with the frontline removes the division of ‘us’ vs. ‘them’ between your back office and frontline operations,” Doepke said.
DHCU Marketing Vice President Cheryl Frame agrees. “It’s about creating a united front,” she said. “We are all ultimately responsible for member service.”
Said Doepke: “Organizations have to fulfill both physical and virtual brand expectations. There is the physical brand — what we see at the office and in the branches — and then there is the virtual brand experience. This is an experience that demonstrates the brand, the commitment of the organization to the individual. Both members and employees have to have that experience.”
Credit unions that take the initiative to enhance their back office operations will in turn improve their members’ experience and grow their operations. DHCU attributes its high employee retention rate and excellent member satisfaction rating to their dedication to providing employees with an environment they can thrive in.
“Our employee turnover rate is just below 4 percent and, as recently as 2000, it was as high as 18 percent,” said Brahm. “We’re ultimately working toward our members’ well-being and enhancing their quality of life, and we’re seeing results. Our member satisfaction rating in service is at 98.2 percent.”
The member experience always circles back to the employee, Brahm noted. If employees don’t want to be at the office — if they don’t want to participate and be involved — they’re unlikely to provide the member with a satisfying experience. Quality service is dependent on the credit union’s environment, the employee’s mind-set and the help they provide.
“We put in place a structure that brings about better employee attitudes, employee commitment and communication between departments, and it manifested into better member service,” Brahm said.
More information on NewGround and its services is available by contacting Babcock at Ext. 252 or firstname.lastname@example.org. More information is also available on the NewGround Website at www.newground.com.