4 Strategies for Improving Banks’ Operating Efficiency

Is the operating efficiency of your bank the best it can be? Nowadays, people have more options than they ever had, so it’s important that your bank is running in an efficient manner. Moreover, the nature of banking is transformed by new technologies, new competition, and changes in customer preferences.

To remain competitive, banks need to invest in self-service capabilities, automation, marketing, technology, and optimize their processes. This article will go over a few strategies you can use to improve the operating efficiency of your bank.

Channel Optimization

One of the things you need to reassess is how your bank communicates with your clients through each channel. For instance, since online banking is becoming more widespread nowadays, you might have more demand for customer chat support.

Moreover, Gen Z and Millennials are opposed to the phone and are more accustomed to chat and email services. Research says that 75% of millennials avoid phone calls and use excuses to do so. You can increase the operating efficiency of your bank by incorporating customer service mediums that will help you retain and attract different types of clients.

Put Your Employees First

The operating efficiency of any banking institute greatly depends on its workforce. Any organization or company, no matter which industry it’s in, can only be as good as its least trained and prepared employee. So, make sure that you invest in the education, training, and professional development of your employees, as well as their satisfaction since this, will lead to higher ROI.

Even though formal education is essential, your employees also need to be properly trained for working with certain systems. In turn, they will be able to better represent your interest and objectives. Furthermore, training will help them present the right services and solutions to customers, think critically, and in the end, contribute to your bank’s success.

In addition, a good training course can help your employees align their goals with the goals of the company, allowing them to perform better and be more productive. Employees that feel content with their job will be concerned about the quality of the customer’s service and the success of the business as a whole.

Lastly, besides investing in training, you should also keep in mind job satisfaction, which doesn’t only include bonuses but also working conditions, working hours, safety, work environment, and so on.

Process Costs

Costs such as rents, salaries, postage, and ad spending are getting bigger and bigger each year. For this reason, cutting costs without forgoing quality will greatly improve your bank’s efficiency. The goal is to improve the efficiency ratio of the bank by decreasing the unit cost-to-value ratio of each transaction or activity, for example, the cost of handling a certain type of transaction, creating a document package, or opening an account.

Process improvement in this field involves frequent monitoring of performance and oftentimes comes as a result of benchmarking, mapping, and rethinking back-office processes. Some crucial trends you should keep in mind include automated routing and processing and greater reliance on electronic documents.

Automation and Technology

As we previously mentioned, using automation and having the right technology is essential when it comes to operational efficiency in banks. One of the simplest, yet most effective ways to upgrade the efficiency of your bank is to go paperless. What this means is you can provide your customers with online accounts where they can check their balance, savings, mortgage applications, and loans. Having a paperless bank also secures data and decreases the chances of errors.

You can also greatly improve the communication between different departments or sectors in your bank through technology. For instance, you can implement Microsoft Teams, an online messaging tool where you have different folders for topics such as specific procedures or employee training. Additionally, another tool you can use is Slack, where you can communicate with your team in a faster and better-organized way than email.

Final Thoughts

As you can see, in order for a bank to operate smoothly and efficiently, it should constantly evolve in accordance with the changes in technology, customers’ demands, and trends in the financial sector. We hope that the strategies we shared with you today will help your bank endure the challenges of a world that are continuously changing. 

Adam Hansen