The thrust of the Banking Operations industry trend is to either

  • Get the customer to do the keying; or to
  • Automate the work; or to
  • Get the work centralised, specialised and outsourced

The benefits of these efforts should be to reduce costs, increase accuracy (which whilst improving customer service also reduces costs) and increase controls. These essentially back office drives do have important implications for the customer “touch points” and the service and sales channels (see Banking Channels for a description of what we mean by ‘service & sales channels’).

Read descriptions of the changes banks are expecting to make in each channel.

  • Branches
  • Electronic
  • Phone
  • Mail
  • Tied Sales Force


This is the key area for change. Most of the benefits associated with the Banking Framework have to come from staff (and/or building) savings in the branch network. There is a school of thought that says the branch network is a fixed cost and the amount of work put through it should be maximised. However the industry is coming round to the view that to move a bank onto a fundamentally lower cost base the operations work has to come out of the branches. Once the work is out, the trick is to realise the benefits; this is not straightforward but many banks are starting to –

  • Reduce staff numbers in branches (not easy but there is in most cases still room for reductions before staffing levels hit the minimum required to cover opening hours, peak customer needs and health and safety cover).
  • Change the profile of the work carried out by branch staff to sales. This is not meant to be an accounting trick of converting staff from cost of servicing to cost of sales. If properly implemented people working in branches will generate extra income. Obviously this is only viable if the staff are appropriately trained and have the right natural abilities and motivations for sales (i.e. staff change).
  • Reduce the number of branches. Politically unpopular in the UK but there is a society wide move away from using large networks of physical buildings for moving bits of paper and money about. Reductions in the work for travel agents, post offices and social security offices are just a few relevant examples.
  • Share branches with other (non competing/complementary) businesses such as cafes, accountants, etc.

The branch will continue to be a key service delivery point for customers for the foreseeable future. The service staff in branches will need access to information about many products, both traditional banking and non traditional such as insurance, as well as good information on the customer. This involves bringing multiple product systems to the branch service person in a seamless way. CRM is often considered to be the solution but in parallel banks appear to be developing solutions to build/use Web browser front ends to the product systems which allow (most unobtrusively) lower tech integration at the desktop.

Simple CRM for contact history and some Group wide customer master files (e.g. a master identifier and password) would also be valuable investments that some banks are making.

We also believe investments will be needed in branches to allow customers to do much more self service or assisted service work;

  • Booths to allow customers to carry out online transactions and electronic form filling
  • Facilities to accept completed electronic forms on diskette and/or print them out
  • Scanning equipment to create images of customer documents such as passports
  • Telecoms capacity to allow the transmission and viewing of images of documents, signatures and cheques.


In many ways, banks have achieved a lot with electronic channels but with not enough penetration of customer base, nor enough coverage of functionality. We believe money is continuing to be invested into this area with particular emphasis on web browser based corporate electronic banking, electronic forms and customer to bank email.


In call centres one of the key changes is the need to separate service and processing in the most efficient way possible (see “Clearly delineate Service and Processing and make Service Multi Product” in Banking Operations Strategies and Technologies). This means an extension of what is already in process in many call centres – the simplification of data entry screens for call centre operators and efficient hand off mechanisms to processing centres (e.g. integrating email to the operator screens).

The other key change we perceive is the need to integrate the service aspects of the many different call centres a Financial Services Group may have (Insurance, Banking, Credit Cards, Mortgages) by customer and/or brand and hence train up the call centre operators on the different product areas. This involves bringing multiple product systems to the call centre operator in a seamless way. Even more so than in branches, CRM is the solution being invested in. Again, a parallel, somewhat lower tech solution appears to be to build/use Web browser front ends to the product systems to allow integration at the desktop.

Simple CRM for contact history and some group-wide customer master files (e.g. a master identifier and password) would also be valuable investments in our opinion.

Finally, despite its unpopularity with many customers, the business world in general is educating the public to put up with computer based voice response technology. We believe this valuable aid in getting the public to identify themselves and keying basic customer information will continue to be capitalised on.


For incoming mail the industry trend is to centralise incoming mail to a mailroom and make electronic images of it all and email the documents to the relevant processing centre. (It may prove cost effective to outsource this activity, e.g. in a Post Office site). We would expect all this incoming mail to be electronically filed against the relevant customer / account / security record but not at the mail opening centre, rather in the relevant processing centre.

For outgoing mail, banks have done much of what can be done to make serious inroads in the associated costs with centralisation of printing and despatch of statements, pre notification of charges, mail shots and common letters. The main change that may still happen is outsourcing to achieve cross industry economies of scale.

Tied Sales Force

The Tied Sales Force that the Banking Framework is concerned with is essentially the Banking Relationship Management community; high net worth personal, small business and corporate. Some senior bank managers have expressed the concern that too many Relationship Managers hide behind service issues and lending admin as a reason for not having enough time to develop new business. As a result, banks have a strong desire to make a decisive break from the relationship manager being the principal point of contact for service to becoming an occasionally used point of escalation for significant service failures. This is another reason behind the industry trend to separate sales and servicing (see “Don’t mix Sales and Service” in Banking Operations Strategies and Technologies).

For this to work a reliable phone and email based service contact needs to be offered to the customer, to replace the Relationship Manager, who will cover the whole gamut of products that the relationship manager handles. This is where we believe the service function in call centres comes in and we would expect call centre operators to be more dedicated to customer groups/brands and less dedicated to specific product areas.

Finally, tied sales forces of Relationship Managers are a potential source of cost saving benefits, (like the branches) in that FTEs, probably in the form of Relationship Manager assistants, can be saved from doing operations work.