Bank's Important Decision After COVID

Understanding how to categorize internal interactions and those with clients.

With everyone experiencing some form of quarantine or social distancing, organizations have needed to transition how interactions occur internally and with their customers. This has forced businesses including banks to deliver virtually. We at Innovate Banks have clustered interactions with customers and internal associates into two categories; Transactional and Transformational.

Transactional Interactions

The transfer of knowledge and information with clients and banking associates is what we describe as Transactional Interactions. With banks having to make the move to virtual and digital communications during the COVID Pandemic, Transactional Interactions have been majority of communication methods. Instead of having bankers standing ready at branches, Transactional Interactions can be handled digitally. Most of these interactions happen via phone or video conferencing, there are enormous opportunities to digitize further, reducing the need of a person. We estimate that at least 70% of interactions that a bank needs to have with clients, prospects, or internal associates would be considered transactional. There is good probability that an institution may increase that to 80% or 90% depending on target market and infrastructure. By appropriately identifying Transactional Interactions, banks can redeploy valuable human capital to other organization priorities.

Transformational Interactions

The human touch is particularly important when needing to influence a decision. Transformational Interactions are those interactions that require in-person connection. Whether it be with a potential new customer, an important team meeting, or new hire interview. The power to be in the room, extending a strong handshake and making eye contact is essential. Banks must be able to determine when Transformational Interactions are necessary. Transformational Interactions come with a higher cost but the Return on Investment (ROI) is significantly higher. For each institution these can be different but a clear line to what is Transformation Interaction is highly important. Impact on budgets and efficiencies are substantial.

Beyond income statement affect, banks need to pay close attention to consistency or lack there of transformational/ in-person interactions with internal associates. With the quick move to virtual and digital communication methods employees can start feeling like they are living on an island. Leaders must provide a cadence where the team is coming together consistently, either in-person (if possible) or virtually as a collective team, followed by 1-on-1 video calls with each team member. This will ensure the organization retains valuable talent.

Next Steps

Innovate Banks can be a powerful partner in helping bank distinguish their Transactional and Transformational Interactions. It starts with taking a collective review of how your organization communicates internally and externally. Then evaluating how it really should be communicating – this exercise will be shocking for most. When done right, organizational efficiency increases, and expenses decrease. Reach out today!