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Sparking Employee Engagement

Surely you’ve heard CEOs say something to the effect of ‘our great- est asset is our people,’ ” says

Denise Federer, founder of FPMG, a performance management firm. “That may sound clichéd, but it contains a good deal of truth, since companies with engaged employees are more likely to be successful than those with the other two employee types: not engaged and disengaged.”

FPMG believes leaders can have a significant role in developing and nurturing employee engagement, which is defined as “the extent to which employees commit to some- thing or someone in their organiza- tion, how hard they work, and how long they stay as a result of that

commitment.” No leader wants to see “loyal” employees leave, especially if significant time and resources have been invested in grooming them for future leadership roles. Those who are shocked when that happens either aren’t aware of what’s going on, or they’ve misread cues from these employees, according to FPMG.

Federer notes that a recent study by Dale Carnegie and Associates found seven of 10 employees aren’t fully engaged, making it even more imperative to create a culture that proactively promotes employee engagement. She says that starts with ensuring employees understand how vital their jobs are to the company’s success, and adhering to the following three key behaviors:

• Confirm. Ensure the com- pany mission statement guides

employees with respect to the behavioral style, work ethic, and priorities expected from them, and confirm it’s relevant to current business goals.

• Assess. Determine what factors influence employee engagement by assessing team members, mak- ing changes to motivate and reen- ergize those who are no longer engaged, and ensuring the culture encourages valued employees to thrive and achieve their profes- sional goals.

• Communicate. Engage in fre- quent, transparent communica- tion with members of the team, ensuring productive conversa- tions take place by using the key behavioral principles of making no assumptions, managing expec- tations, and breaking down com- plex behavior. ■

Professional Pointers

branches. Consumers can now conduct around 80 percent of banking transactions through ATMs and other automated banking channels without staff assistance.

Mobile Payments: Young Adults and Minorities Take the Lead

A recent report from Mercator Advisory Group reveals that young adults and minori- ties lead in use and interest in mobile

payments as they are also the most likely of customer segments to be mobile-enabled.

Seventy-five percent of young adults, 73 percent of Asians, 70 per- cent of Hispanics, and 64 percent of African-Americans own smartphones, compared to an average of 55 per- cent smartphone penetration within overall US adult households as of June 2013.

“Greater mobile penetration is shifting the demographics of smart- phone users. No longer are mobile apps the domain only of young adults

who are avid mobile users— minorities are leading the ranks as well,” said Karen Augustine, manager of the CustomerMonitor Survey Series at Mercator Advisory Group and the author of the report. “Mobile pay- ment use and interest is growing, but there needs to be a compelling reason to launch a payment app at checkout. Greater automation in the coupon- ing and loyalty programs to enable consumers to get a discount with a purchase will help move the needle of consumer adoption of mobile payments.” ■

Maximizing Retail Banking Cost Efficiencies

Banks across the world are revis-iting their operational strate-gies, branch banking models, distribution channels, and expansion strategies to achieve cost efficiencies

and increase profits. They are focus- ing on selling high-margin profitable products and services and scaling down unprofitable operations, accord- ing to 2020 Foresight.

These institutions have placed an increased emphasis on utilizing tech- nology to improve profitability and

achieve cost efficiencies, and the role of technology has changed from being a process driver to a revenue genera- tor. Retail banks are using technology to increase profitability by utilizing customer relationship management (CRM) systems and consumer analyt- ics to identify new customer groups

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and offer customized products and services to targeted customers, according to 2020 Foresight.

In addition, key measures adopted by retail banks to improve operational efficiencies include an increase in information technology (IT) spending and upgrading IT systems.

Key highlights of the report include:

• Global banks are currently seeking opportunities to enter high-growth emerging markets to drive revenues.

• Banks are divesting unprofitable busi- ness segments, product offerings, and customer groups that are not part of their core business strategy.

• There will be increased investment in self-service and digital media channels to communicate with cus- tomers promptly and effectively.

• Banks are expected to increase their spending on integrating distribu- tion channels to provide a seamless customer experience across all dis- tribution channels.

• Use of business intelligence analyt- ics to develop products and services that fulfill the unique needs of cus- tomers is expected to be at the core of banks’ product-design strategies.

CUNA Offers White Paper on Branch Development

T he financial services industry has been conducting a debate about technology’s effect on branch development. Some analysts have forecasted the end of the branch as we know it. Others say that the branch will always be with us, but will evolve into a service center for prob- lem resolution and complex products such as mortgages, student loans, and wealth management.

A new white paper from the Credit Union National Association (CUNA) entitled “Is Technology Causing Branches to Close but Service to Thrive?” addresses this question and others by interviewing credit union practitioners and analysts, as well as examining relevant research.

The research found that consumer behavior, not technology, is the pri- mary indicator of branch changes. There has been a significant decline

both in average monthly transactions and visits to the branch. Consumers, however—even those who are tech savvy—express a need and find com- fort in a branch that is convenient, even if they rarely use it. The branch continues to be a symbol and brand embodiment for the financial institu- tion, albeit an increasingly costly one as branch expenses tend to be higher than alternative channel costs.

The economics of alternatives to building a branch are compelling. It costs an estimated $1 million to $2 million to build a branch. Alternatives include improving electronic services, especially self-service delivery channels with employees to help members.

In just two or three years, mobile banking is predicted to dominate financial services. Industry profes- sionals have adhered to the traditional business model that relationships had to be built on a face-to-face interac- tion at a branch. Facebook and other social media have countered this dogma with the reality that relation- ships can be built electronically.

Declining fee income and margins, as well as regulatory pressures and increas- ing costs, will cause a rethinking of the business model and branch development and will lead to smaller branches, more self-service, and expanded duties for staff, according to CUNA’s research.

The paper is available online in the white-paper section of www. cunacouncils.org.

The Rise of the New Bank Account

In the past, bank account relation-ships, combined with payment cards, have enabled banks to be the dominant providers of transac- tion services to their customers. Today banks’ leadership position in providing card and payment transaction services is under threat, primarily from two sources: Regulation and competition.

In a report titled “The Rise of the New Bank Account? The Quest for Transactional Account Primacy,” Celent briefly recaps the threats to the cards business and examines emerging threats to the core bank account. The report also reviews how banks have been responding to date.

The report poses a crucial ques- tion. In the not too distant future, will the “new bank account” need to have the following capabilities?

• Support for multiple value tokens, including virtual currencies, miles, coupons, and loyalty points. The bank becomes the trusted custo- dian of value, both monetary and nonmonetary.

• Full transactional capability: All types of payment use cases directly from a bank account.

• Customers fund purchases either with money or other value tokens, such as coupons and points, or any combination of the above.

• Highly contextual services: Making use of the ubiquitous mobile device that is always in the consumer’s hand to deliver highly personal, tailored, and contextual services such as information, advice, and merchant offers.

“Banks have to consider many issues before building these new capabilities, such as how to manage tensions between new and old sources of value, and what would happen if mobile payments were to lead to fragmentation and re-emergence of the domestic payment solutions,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and author of the report. “However, we strongly believe that the core bank account must evolve to maintain its relevance in the digital world.”

ATM-Mobile Wallet Partnership Connects Customers to Cash

Consumers can now use their smartphones instead of their debit or credit cards to withdraw cash from automated teller machines (ATMs). Enabled by a partnership between Diebold and mobile wallet provider Paydiant, the cardless Mobile Cash Access (MCA) solution gives consumers a more convenient and secure option to inter- act with their financial institutions, while giving banks and credit unions the opportunity to offer their own branded mobile wallet solution.

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