Press center Press release archive Bank Staffing Levels Remain Too High
Average Bank Staffing Levels Remain Too HighA significant gap in the cost of branch operations is opening up between average banks and the most efficient players, according to a new study of branch banking. New figures from Compass Management Consulting suggest that the most efficient banks are able to operate their branch networks successfully with 30% fewer staff than the average. This equates to around two fewer staff performing basic transaction processing in each branch and an annual saving per bank of around £38 to £50 million, depending on the size of the branch network. The Branch Productivity – Decision Time report highlights the gap in bank productivity (as measured by staff utilisation levels) as between 45% for the poor performers and 83% for the best banks. Top performing banks should aim to achieve 65-75% staff utilisation, according to the authors of the report. “The branch networks of retail banks face two challenges in order to improve profitability: they need to generate higher product sales, and reduce the costs of routine transactions. Automation is a major driver of performance improvement in branches, but some banks remain cautious about the effect on customer experience in the quest for better productivity,” said Paul Teather of Compass Management Consulting. Compass says the main drivers of higher costs in under performing banks include: - Higher task times for processing counter transactions According to the report, while some banks remain reluctant to introduce self-service and automation in cheque processing and other areas, customer satisfaction levels can actually increase as a direct result of such initiatives. Similarly, cash management and recycling using Teller Assist Units (TAU) can reduce branch cash management costs by 10% or more, but TAUs are only used in around 20% of branches. “The appetite for self-service and automation technologies in the branch varies by regions and between banks in a region. In Asia, for example, there has been widespread and successful introduction of teller and self-service automation. There are significant opportunities in Europe and North America to use technology to reduce the costs of transaction processing. Typical European banks, for example, are leaving potential savings of 30% of their branch operations costs on the table,” said Paul Teather. The time it takes staff to perform basic transactions in the top quartile banks was 42 seconds less than the average, mainly due to investment in technologies to assist counter operations, according to Compass. The firm says that self-service transactions account for 70-80% of all branch business in the top performing banks. “The cost of involving staff in the processing of a counter transaction is five times the equivalent of the self-service process. This cost differential makes a compelling case for migration to self service for the majority of banks,” said Paul Teather of Compass.
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