Financial industry CEO’s: Do you speak the new banking lingo?
Due to the massive behavioral and technical upheavals in the financial industry, former thought-leaders are finding themselves in the unenviable position of being least-knowledgeable about the most powerful aspects of their profession.
Bank CEO’s, with an average age of 58, may rightly feel uncomfortable around younger employees when they break out the “tablets”, “apps” and “cloud-based services”.
Everyone working with the new banking model should be conversant with its main terms, so I decided to write a little glossary for the industry’s more senior members.
Some of these you’ll know, some you won’t. Bookmark this page for future reference.
The simple definition of “Analytics” is the one shown above: Study of online experience in order to improve it. There are many programs available to track one’s online performance. Analytics metrics include things like:
- • Site traffic
- – the numbers of unique and total (New vs. Returning) visitors to your website.
- • Conversion rate
- – the percentage of site visitors who do or buy something you want them to, i.e. leave an email address, apply for a loan, request financial advice.
- • Demographics
- – the age, gender, geographic location, etc, of visitors to your website.
- • Search Optimization queries
- – the exact terms people typed into search engines that resulted in them visiting your website.
The consistent traits (colors, designs, quality of service, benefits and general experience) customers encounter when doing business with your company. This can include such things as:
- • Colors
- – the pallette you consistently use to create themes, feelings, etc, synomymous with your brand.
- • Designs
- – patterns, emblems or symbols such as logos to promote brand recognition without the need for words.
- • Benefits
- – key differentiators that set your brand apart from the competition.
- • General Experience
- – customer service, personability, and other experiences that remain in the memory of customers who encounter your brand.
Cash recyclers represent the next generation in teller efficiency. These machines can count and sort bills, reduce required cash amount on premises, and perform balancing for the entire branch, all in real-time.
The “Cloud” is really just another word for the Internet. Historically, companies stored data and programs on their machines’ hard drives, known as “local” storage and computing. Cloud computing is stored on the “other side”, on the vendor’s servers. The cloud is accessed on the Internet and comes in numerous forms, including Software as a Service (SaaS, see below) and Platform as a Service (PaaS). Examples of cloud storage and services are Google Drive and Apple iCloud.
Your communication strategy and brand personality should be integrated with all other aspects of your brand marketing and public relations. Communication strategy is the “voice” of your brand, and can be expressed through email newsletters, social media, in-branch merchandising, TV and radio, and more. Communication strategy is the umbrella under which all your messaging and marketing/distribution channels should fall.
Contemporary architecture is designed to reflect progressiveness, and may change dramatically from decade to decade while remaining identifiable as Contemporary. There’s a distinct lack of “old fashioned” elements in contemporary architecture, and more emphasis on function, the use of natural light, and connectivity between exterior and interior environments.
Dialogue Tower or Teller Pod:
Dialog towers (also known as teller pods, pictured above) are free-standing towers that permit greater movement of both branch staff and customers. Teller pods feature cash recyclers and are staffed by universal bankers (see below) who have more latitude to cross-sell and provide services far beyond cash transactions. Financial industry workers prefer cash recyclers and some also believe that teller pods may discourage robbers.
Digital channels include any electronic interactions with customers, such as banking apps, social media, email and engagement with a financial institution’s website. Some digital channels are purely promotion or communications-based, while others are retail or transactional in nature.
Digital consumers can be segmented based on the degree of their online activity. Some may be completely immersed in all aspects of digital commerce, while other may spend minimal time connected electronically to services. Most digital consumers operate somewhere between these two extremes. Analytics are useful in identifying and engaging with these different segments to create a more custom experience.
A financial institution’s retail communications can be greatly enhanced by the inclusion of a digital wall. Digital walls can feature everything from computer touch-screens, to advertising text and images, to interactive whiteboards.
Distribution channels include every possible means of making your services available to customers. A free-standing drive-thru ATM can be a distribution channel, as can a “smart branch” flat screen TV connection to a remote advisor. Different channels have different value propositions, different growth rates and different degrees of profitability.
E-readers are devices such as a basic Kindle or Nook, designed chiefly to read and download content. E-readers are similar to tablets but aren’t as versatile. They are also smaller and lighter, usually around six inches long and easily carried in a pocket.
As branches shrink, they can be made to fit into ever-smaller niches. A so-called hi-rise branch, or micro-branch is small enough to be housed inside other businesses and public environments, providing an inexpensive and convenient option for F.I’s and their customers to branch out into new neighborhoods.
Integrated Project Delivery/Integrated Practice:
Integrated Project Delivery, or IPD, as it’s called, is the collaborative construction approach employed by companies like Solidus on all projects. IPD has numerous benefits, including:
- • Cost
- – all coordination between different trades and disciples is conducted within one and the same group, saving clients time and money in research and organization.
- • Timeline
- – because all project participants work for the same company, a much more accurate and timely wrap-up can be achieved through communication and planning.
- • Transparency
- – key participants in the process share financial risk so fiscal transparency is part of the collaborative culture, extending to the client.
- • Collaborative decisions
- – architects, designers, builders, furnishers, floorers and window treatment providers are all in open communication from the beginning of the project and decisions are made jointly and holistically.
Interactive Teller Machine:
Interactive teller machines, or ITM’s, are similar to traditional ATM’s, but with enhanced capability. There’s a two-way video connection for face-to-face conversations in real time, and customers can perform virtually any transaction with the remote teller that can be done in person. Customers can deposit as well as withdraw cash, plus they can deposit checks. Notably, ITM’s offer teller interaction at off-hours so they’re more convenient.
The Lean movement is applied mainly to startup companies, but it can really be applied to any business project. Ultimately, Lean focuses on putting products in front of customers more effectively, with fewer overheads and less risk. Financial insitutions can use this approach to offer expanded services and new distribution channels early in the introduction process to determine if these services are even desirable to their customers. Companies like Solidus also use the Lean approach to minimize cost to the client when beginning a project, by offering an inexpensive and comprehensive research and strategy phase to determine if the client’s vision can be realized within a reasonable cost and timeline.
LEED, or Leadership in Energy & Environmental Design, is a green building rating system that is applicable to several different project types including:
• Building Design and Construction
• Interior Design and Construction
• Building Operations and Maintenance
• Neighborhood Development
Companies must register in one or more of the Green Building Council‘s rating system based on their project type. Each rating system awards credits that determine the level of LEED certification that particular project earns. LEED certification demonstrates leadership in the green design field and is a globally recognized mark of achievement.
Mobile banking is conducted exclusively through mobile devices such as smartphones and tablets. Financial institutions often build their own apps that can be downloaded to mobile devices and which serve customers a tailored experience based on their individual needs. The use of mobile detection on bank and credit union websites can identify visitors who are using mobile devices and redirect them to the institution’s mobile site, or to an online app store where they can download and install the institution’s app.
Mobile banking will become even more sophisticated over the next several years, allowing F.I’s to provide a richer engagement with their customers via expanded services and media.
Movable wall systems can be used for many purposes. They provide flexible environments for branches that require temporary privacy for loan consultations or other financial advice. They can be used to close off the inside of micro-branches for the night, while leaving ATM’s exposed out front for customer use. Movable walls are also known as modular architectural products and services (MAPS), or agile interiors. They may be constructed from glass, plastics, wood or metal, and they can be reused and even recycled.
Movable walls can also feature lighting, digital and interactive components, which can all be used to great effect in a branch retail environment. Digital modular walls can even “talk” to each other and to other “smart” devices, but their true strength lies in their changeable nature; movable walls never look old or outdated, as the parts can be switched up in response to design changes.
- • Experience Mapping
- – consumers pass through different phases of intent when they enter your business space. Designers draw experience maps to better understand where the most significant interactions occur.
- • Touchpoints
- – touchpoints are discrete contact points where customers are exposed directly to products or services. In a financial institution the touchpoints include service advisors, products and cash transactions.
- • Product Placement
- – there’s a science to strategically placing products based on observed consumer behavior. Financial institutions also use data to control customer flow more effectively and expose consumers for longer periods to promotions.
- • Merchandising
- – merchandising is used to cross-sell services within branches via digital signage, touch-screen kiosks, brochure dispensers, customer lounge areas, and more. It’s also a way to reinforce the overall brand experience.
Site Location Science:
Forty percent of new bank branches fail to hit deposit goals, largely due to poor site selection. Companies like AccuBranch use data, software and human research to remove this failure risk by positioning new branches in locations beneficial to success. There’s a strong correlation between the use of location science or the lack thereof, and a branch’s rate of success or failure.
Software as a Service (or SAAS):
Software as a Service (SaaS, or SaS) is a software licence obtained by subscription to a vendor as an “on demand” service. This outsource model has grown in popularity as it is a way to reduce costs for equipment and maintenance.
A smart branch is a small, cloud-based activity center connecting clients to universal bankers via video or in person, for transactions and/or consultation. Smart branches offer segmented customer experiences due to integrated technology such as personalized mobile or digital café-style community lounges.
A smartphone is a phone-sized computer by which customers can connect to banking apps, email, video, Internet and text messaging. i-Phones and Androids are among the most popular smartphones.
Social networks like Linked In, Facebook and Twitter are all now being used by F.I’s to message and promote services and products to consumers. By “liking” or following their bank, customers are placed in closer contact.
Software is functional computer code and can be classed as either systems or application in nature. Most people are familiar with application software, such as word processors, email programs and database applications. It can be stored on disk, server, hard drive, cloud, or memory stick.
This is an area inside a branch where customers can access account information and other services via tablets and laptops with pre-loaded apps installed. Banks also provide access to mobile interactions such as bill payment and even customer feedback via social media. Technology bars are usually designed around a countertop or island, where customers can conduct their affairs digitally or confer with branch staff.
A Traditional branch is one constructed in the architectural style of (in this case) New England, bearing the hallmarks of regional techniques and materials. It speaks to a culture existing in a time and place, and is geographic in nature.
A traffic spike is an analytics term meaning a sudden increase in visits to your website that appears as a sharp peak in traffic reports. Traffic spikes can be triggered by events such as press releases, email newsletters and engaging posts on social networks.
Transitional architecture is a combination of traditional and more modern architectural forms. A transitional building may have a traditional exterior and an open-plan modern interior, or else its exterior may have a traditional appearance with some more contemporary elements worked in.
Turnkey products or services are designed, built and supplied holistically, and are ready for immediate use when completed. The Integrated Project Delivery method can be applied to many industries, including the construction of financial branches. These branches can be researched and analyzed for optimal location by site location specialists, designed by architects and interior designers, built from the ground up by construction crews, and furnished by furniture suppliers and delivered to the client as one all-inclusive package.
A universal banker is a new kind of financial branch staffer who has been cross-trained to provide panoramic service across all aspects of the industry. Universal bankers may greet customers at the door of a branch, carrying a tablet, and help them to use a banking app. They might also move around the shop floor making customers aware of all available distribution channels and teaching them about those channels. If the customer is visiting the branch to conduct a video conference with a remote advisor, the universal banker can facilitate this by showing them to the appropriate area and connecting them to said advisor. They can also give financial advice, assist with online bill paying, and a host of other functions associated with the “smart branch” model.
Video Call Centers:
Video call centers are where financial institutions base their remote tellers and other employees connected to customers via multiple communication media. A customer using an interactive teller machine (video ATM, or ITM) would speak with a bank representative in a video call center. These “remote tellers” can reduce full-time employee wage bills and, if cross-trained, provide a generally richer experience with a financial brand.
Hopefully, this glossary has been of some help to those who didn’t grow up with the newer digital lingo constantly assailing their ears. But the financial world is changing and some of these terms are essential knowledge.