Delivery Channel Modernization Providing Exceptional Service - - PowerPoint PPT Presentation

Delivery Channel Modernization

Providing Exceptional Service through Retail and Digital Strategies

Discussion Outline

I. INTRODUCTIONS

• II. INDUSTRY PERSPECTIVES | TRENDS
• III. CHALLENGES TO COMMUNITY BANKING
• IV. OUR THOUGHTS
• V. Open Q&A

Delivery Channel Modernization Team

Solidus—Mark Charette Accubranch—Mike Goman NBS—Tom Grottke

t: 860.838.3888 e: mcharette@gosolidus.com t: 860.841.3271 e: mgoman@accubranch.com t: 860.436.6149 e: tgrottke@nebsg.com

Industry Perspectives | Trends Fewer/smaller offices win Mobile banking adoption New account opening Up against the Big Banks Satisfaction up, defections down

Industry Perspectives | Drivers Strategy & Policies Labor & Technology Channel Profitability Real Estate Type/Location

Synchrony Financial Report, “The Future of Retail”* “Show me—Entertain me—Teach me—Help me.”

55% of consumers prefer an in-store experience “that entertains me”. Retail will be about “making the tedious stuff invisible and the fun stuff beautiful”. Convenience, tech-driven personalization and instant gratification will drive retail industry behavior through 2030. “A new model of delivering not just products, but also genuine brand experiences is emerging.” * Guardian News, Edward Helmore

Branch Transformation: The Inline Branch 1,200 sq. ft.

Branch Transformation: The Inline Branch

Dialogue Tower Brand Wall Instructional Tech Bar Digital Media Hoteling Office

Branch Transformation: Market/Data-Driven Ground-Up Branch

Branch Transformation: Ground-Up Branch

Branch Transformation: Market/ Ground-Up Branch

Ground-Up Branch

1,462 sq. ft. “Egg-shaped” interior

Ground-Up Branch

Branch Transformation: Dialogue Towers

ITM Machine

Branch Space 1,330 sq. ft. Tellerless Branch

Challenges to Community Banking “Will our costs be too high?” No access to potential customers Community message lost in cyberspace? Attracting/retaining needed talent

Industry Perspectives | People Must Change

Branch Office Staffing # Positions/Titles 1 Branch Manager 2 Assistant Branch Manager 3 Cust Service Rep (2-3 levels) 4 Head Teller 5 Tellers (2 to 4 levels) VS. 1 Universal Banker (2 levels)

Industry Perspectives | It Must Be Lower Cost

Non-Main Office, Non-"Lge Branch" Typical Operating Model (Suburban/Rural)

Avg FTE Avg Cost (000) Total Annual Cost Base Staffing Plan - Branch Manager 1.0 $ 55.0 $ 55.00 Assistant Branch Manager 0.5 $ 45.0 $ 22.50 Cust Service Rep (2 to3 levels) 1.0 $ 37.5 $ 37.50 Head Teller 1.0 $ 32.5 $ 32.50 Tellers (2 to 4 levels) 1.0 $ 25.0 $ 25.00 Part-time Positions 0.5 $ 20.0 $ 10.00 5.0 $ 182.50 Universal Banker (2 levels) 3.0 $ 42.5 $ 127.50 Base Office Labor Savings - Per Office $ 55.00 Building Costs (avg.) -

• Sq. ft.

Cost/Ft Total Annual Cost Traditional Avg. Branch 3,750 $ 28.0 $ 220.3 New Model Building Costs 1,800 $ 35.0 $ 157.6 Base Office Building Savings - Per Office $ 62.70 Total Base Office - Average Annual Savings/Office $ 117.70

Industry Perspectives | Trends Data-driven decision making Distribution channels & locations Communications & branding

Market Analysis & Real Estate Activities

Data & research used to identify the best locations for strategic expansion. Bank avoids costly mistakes in planning, lease/purchasing & permitting process. Bank’s real estate dept. or trusted partner applies comprehensive expertise.

Market Analysis & Real Estate Activities

Account Holders

Drive Time Market Area 8 Min 15 Min Front Porches 27.90% 17.00% Parks and Rec 7.90% 14.40% Savvy Suburbanites 8.40% 11.00% Comfortable Empty Nesters 12.40% 8.50% Metro Fusion 0.00% 6.50% Account Holders Savvy Suburbanites 19.41% Parks and Rec 13.61% In Style 11.27% Comfortable Empty Nesters 10.20% Green Acres 9.88%

Market Analysis & Real Estate Activities Tapestry Segments (examples)

Tend to Bank Online Tend to Bank In Person

Market Analysis & Real Estate Activities

“On the ground” research.

Market Analysis & Real Estate Activities

Deposit Estimators A scientific projection of deposit growth over a 5-year period. Based upon a specific address

Our Thoughts The branch has a future Can’t grow as exclusively online banking platform “Local” is an advantage

Our Thoughts—”Must Do’s” Lower your cost structure Provide competitive digital delivery Be a modern, fresh, attractive & friendly presence Embrace the universal banker staff model

Open Q&A

Thoughts and Feedback What are Bankers’ Views? What Do Bankers Expect of Other Neighboring Competitors?

Delivery Channel Modernization Team

Collaborative/Holistic Approach

Delivery Channel Modernization Team

Solidus—Mark Charette Accubranch—Mike Goman NBS—Tom Grottke

t: 860.838.3888 e: mcharette@gosolidus.com t: 860.841.3271 e: mgoman@accubranch.com t: 860.436.6149 e: tgrottke@nebsg.com