Resistance is Mutable: 5 Keys to Driving Technology Adoption in Financial Services

Technology is continuing its push to take over all aspects of customer workflow in financial services, from paperless onboarding to risk assessment apps to instant loan decisioning to algorithm-based portfolio construction. In fact, there are few aspects of the customer lifecycle that can’t be touched by technology. But “can’t be” is different from “won’t be” and that distinction often comes down to adoption by customer-facing personnel. While few technologies are perfect and there’s often a specter of tech replacing humans, in our experience neither of these is typically the cause of tech adoption struggles. More often than not, tepid adoption is due to a failure to appreciate the intensity of people’s resistance to change.

You may think that the current system is so inefficient/ineffective/clunky that everyone will love the new one, but that is not the case. Why? For starters, nobody likes to be told what to do. Moreover, even when people work with far-from-perfect systems and processes, they don’t always embrace the new, required solution because they have devised work-arounds that have become an integral – if imperfect – part of their routine. Finally, for customer-facing personnel, you can take whatever resistance exists and multiply it by 10 because those on the front lines of customer interactions are understandably anxious about using systems they don’t know and trust when under the pressure of dealing with customers looking for quick resolutions to their problems.

To overcome these obstacles and drive long-term adoption, here are five key components for success:

  1. Understand the audience. When you want to figure out how to get customers to buy, you seek out research and information about their attitudes, behaviors, and pain points to identify points of leverage. Driving adoption is no different. Sitting with, talking to, and watching future users in action will fundamentally shape how you should present the new technology to them and how you can communicate its value more persuasively.
  2. Appreciate their anxiety. Change is hard. As the saying goes, “better the devil you know than the devil you don’t.” Dismissing or underestimating the anxiety surrounding technology change is practically a guarantee that you will underinvest in driving adoption and will fall short of your goals.
  3. Calculate the impact. How much time saved? How much more accurate? And, most importantly, how do those gains translate into benefits to the users and their work? Most change management efforts come equipped with an ROI calculation, but these calculations are often based on a hypothetical future state, rather than the users’ current state. Identifying the time spent on activities today and the potential value of that time redeployed will lead to more compelling adoption communications grounded in reality.
  4. Market the change. Driving adoption means influencing behavior. Influencing behavior is the primary job of marketing (albeit one that typically applied to prospects). The same core elements of a successful marketing campaign – nailing the message, identifying the most effective communication channels, and measuring results – should be applied to your adoption efforts with all the rigor and discipline of a lead generation or customer retention campaign.
  5. It’s a marathon not a sprint. If you were launching a new product to a skeptical market, you wouldn’t promote it once at launch and then never again. Driving tech adoption must be approached the same way. It’s fine to launch with a splash, but if that isn’t supported by ongoing efforts to highlight successes, handle ongoing objections, and measure effectiveness, the opportunity for wide-spread adoption will be missed.

If these five components make driving technology adoption sound like a marketing campaign, that’s because it is. Many businesses talk about “selling” users on new technology but miss the most important inference of this language: before selling, you need marketing. A company may not get as excited about 95% adoption as it does about big, new sales deals, but the amount of money invested in new technology means that it should. A great but unused application has as much value to the company as a big but unsigned customer: None.

U.S. banks are reducing, repositioning branches

An EMI analysis of recently-published quarterly bank data by the FDIC found that U.S. banks are continuing to reduce branch numbers.

U.S. branches are very heavily concentrated in a limited number of banks:

  • Just 50 banks (<1% of all banks) hold more than than half of all branches (51%).
  • More than 6,100 banks (93% of all banks) have five or fewer branches.  And, of these, more than 1,400 branches have just one branch.

Bank branch numbers change based on bank merger-and-acquisition activity, purchase and sale of portions of branch networks, as well as organic growth.

  • Over the past year, the vast majority of banks (83%) did not change branch numbers.
  • 548 banks (8% of all banks) grew their networks by a total of 2,359 branches.  PNC had the largest growth (+421 branches), largely due to its acquisition of RBS Bank as well as an Atlanta branch network from Flagstar Bank.  Chase also had strong growth (+185 branches), driven by organic growth in key expansion markets like California and Florida.
  • 609 banks (9% of the total) reduced their branch networks by a total of 3,092 branches.  Aside from bank sales/closures, the bank with the largest decline was Bank of America, which is in the process of cutting its branch numbers by 10-15%.

Even following the reduction in branch numbers, there are almost 98,000 bank branches in the U.S., so clearly the branch channel is not going away anytime soon.  However, more and more customers are gravitating to self-service electronic channels for their everyday banking needs, so a reassessment of branches’ traditional role is needed.  At the same time, branches have untapped potential as sales, advice and marketing channels.  The following are some key areas that banks need to focus on to both right-size their branch networks and equip these branches to realize their full sales, service and marketing potential:

  • Network density.  Banks will need to determine optimal branch density in key markets, in order to maintain a significant physical presence, and deter competitive market entry, while avoiding significant overlap between branch catchment areas.
  • Branch size. Less traffic in branches will necessitate smaller branches in some markets.  Some banks are already creating a variety of branch formats to reflect different market opportunities (as defined by market profiling that covers information like the number/projected growth of people and businesses within a radius of the branch, the bank’s overall strength in the market, as well as competitive intensity).
  • Branch design.  The design and layout should reflect branches’ new sales and advisory role, with less space for teller counters, and a layout more conducive to staff-customer face-to-face interaction.  Recognizing that branches play an important branding and PR role for the banks, many banks are redesigning branches to convey a more customer-friendly image and promote connections with the local community.
  • Staffing. Again, the changing role of the branch will mean that there will a reduced need for tellers with a greater role for specialists, such as mortgage bankers, investment advisors and small business bankers.  Staff training and support tools will need to reflect their new roles in the branch.
  • Technology and channel integration. As banks change the design and staffing of branches, they are incorporating technology to showcase new products and services, connect with remote staff (e.g., using videoconferencing in the branch to connect to financial advisors), and promote other bank channels (Bank of America is using QR codes in teller counters to enable customers to download its mobile banking app.)