Annual savings of $20,000 to $30,000 per branch await financial institutions willing to take simple steps to improve branch channel efficiency and effectiveness, according to a study by Celent.

In a new report, the company explores the benefits of workforce optimization (WFO) solutions, likely results for prospective financial institutions, and the vendor landscape for WFO.

Workforce optimization isn’t a new idea. Yet a small minority of retail financial institutions use it. In the United States, Celent estimates that less than 450 financial institutions (about 3%) use WFO solutions to help manage the branch channel. Those that do are disproportionately larger banks.

Key findings of the report include:

•    Despite the growing activity in alternative distribution channels, Celent contends that the branch will remain a relevant and strategically important channel for the foreseeable future. However, the evolving regulatory, economic, social, and technological environment has created an imperative for branch transformation. Precisely how branch channels will evolve will vary by financial institution.

•    Branch channels must be operated more effectively and efficiently to remain viable. One means for doing so involves the use of workforce optimization solutions.

Celent observes a perfect storm of factors that will accelerate adoption of workforce management solutions in retail banking:

•    Retail banking business models are challenged with eroding revenues, placing a premium on cost reduction, particularly in the branch channel. The October enactment of the Durbin Amendment to the Dodd-Frank Wall Street Reform will exacerbate an already difficult situation in the United States.

•    WFO solutions, once the purview of larger organizations, are now broadly delivered as software as a service, slashing implementation costs and removing the requirement for in-house expertise.

•    Over the past year, WFO vendors have packaged SaaS solutions with turnkey services to further reduce solution cost and complexity. This is making WFO a relatively easy “yes” even for small financial institutions.

 

 

“Financial institutions of all sizes are under considerable pressure to both reduce costs and improve branch sales and service effectiveness,” says Bob Meara, senior analyst with Celent’s Banking Group and author of the report. “Yet most haven’t taken the relatively simple step of workforce optimization. Those that have are enjoying considerable efficiency gains as well as a detailed understanding of their branch channel operations.”


http://www.celent.com/reports/any-way-run-branch-workforce-optimization-solutions-retail-banking