UMB Financial Corp. is piloting a new branch concept as part of a broader effort to position its branch banking for the future.
UMB vice chairman Mike Hagedorn said Tuesday that branch banking is changing, and it’s important for UMB to be on the front end of that change
UMB has remodeled what it calls “adviser centers” in Denver, St. Louis and its home city of Kansas City; trained staff members; and replaced the traditional teller counter with private rooms containing sound-deadening walls that are equipped with high-definition video screens connected to “video bankers” at the bank’s downtown Kansas City call center.
“The bigger question in the industry is what is the purpose of branches in consumer banking of the future?” Hagedorn said. “We’re trying to establish and create a completely different customer experience.”
Customers entering these centers are greeted at the door by bank employees called advisers whose job it is to determine through a series of open-ended questions exactly what a customer needs and if there is an opportunity for the bank to cross-sell them other products or services.
If it’s a simple transaction such as opening an account, making a wire transfer or signing loan documents, customers are turned over to video bankers.
If the questioning reveals the chance to help customers with investments, loans or other “higher-value activity,” then the adviser assists them with those tasks.
It’s an effort to make the $14.7 billion bank increase efficiency at its network of 112 full-service branches that operate in seven states, including Kansas. The bank operates three branches in Wichita.
“Post-2008, the consumer banking business has completely changed,” Hagedorn said. “Dodd-Frank (Act) removed levels of revenue in consumer banking. What that has done is forced banks to take a look at their branch networks … how to make them more efficient, more effective.”
Hagedorn, who also is the bank’s chief financial and administrative officer, said the pilot, launched last May, is still being evaluated, and he’s not ready to say yet whether it will expand to more branches or how many.
“I think right now we’re trying to evaluate the success and results of this pilot,” he said. He added there is a significant cost to remodeling the branches into adviser centers.
“It’s probably not cost-effective for us to do across the branch network,” Hagedorn said.
But in terms of getting UMB customers more vested in products and services, the pilot is promising. He said he knows of one instance in which bank staff members working at the adviser center in Denver were able to learn through questioning that a customer coming in to make a deposit had “considerable wealth at another financial institution” and was “very unhappy” with the lack of service at that institution. That situation led to new business for UMB.
“Suffice to say the sales activity and referral activity is multiples of what it is in a standard branch, so it works,” Hagedorn said.