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 NBS — Tom Grottke t: 860.436.6149 e: tgrottke@nebsg.com Accubranch — Mike Goman t: 860.841.3271 e: mgoman@accubranch.com Solidus — Mark Charette t: 860.838.3888 e: mcharette@gosolidus.com

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

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.” 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.” 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”. * Guardian News , Edward Helmore

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

Branch Transformation: The Inline Branch Digital Media Brand Wall Hoteling Office Dialogue Tower Instructional Tech Bar

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

Tellerless Branch Branch Space 1,330 sq. ft. ITM Machine

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 Cost Total Annual Avg FTE (000) 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 Total Annual Building Costs (avg.) - Sq. ft. Cost/Ft 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 Bank’s real estate dept. or trusted partner applies comprehensive expertise. Data & research used to identify the best locations for strategic expansion. Bank avoids costly mistakes in planning, lease/purchasing & permitting process.

Market Analysis & Real Estate Activities Account Holders Drive Time Market Area 8 Min 15 Min Account Holders Front Porches 27.90% 17.00% Savvy Suburbanites 19.41% Parks and Rec 7.90% 14.40% Parks and Rec 13.61% Savvy Suburbanites 8.40% 11.00% In Style 11.27% Comfortable Empty Nesters 12.40% 8.50% Comfortable Empty Nesters 10.20% Metro Fusion 0.00% 6.50% 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 NBS — Tom Grottke t: 860.436.6149 e: tgrottke@nebsg.com Accubranch — Mike Goman t: 860.841.3271 e: mgoman@accubranch.com Solidus — Mark Charette t: 860.838.3888 e: mcharette@gosolidus.com