Anyone who was part of a scouting club as a child has felt friction. Friction is the magic that finally creates a spark when someone rubs two sticks together to start a fire. Some types of friction, however, can hinder your progress rather than provide for you.When community financial institutions (CFIs) think about ways to improve their profitability, they might consider attracting deposits, offering new products, or writing better-performing loans to bring in money. Bringing in more money is a great way to plump up the bottom line, but it’s also important to look for ways to save money so that losses don’t offset those profits.
One way to save money is to increase efficiencies, and an often overlooked source of inefficiencies and turnover rates is work friction. What is work friction?Work friction is the time and energy lost or wasted when anything makes a job or process harder than it has to be. Simple examples might include a headphone set that doesn’t fit or a program that’s taking too long to load. It’s annoying and frustrating to deal with tools that don’t work. Fixing or replacing them takes up time and money that could be spent more profitably on other things. Work friction doesn’t have to involve a tangible impediment, though. Frequently switching between tasks is another source of work friction. Research from global enterprise cloud communication company RingCentral found that 68% of workers surveyed switch between apps up to 10x an hour and doing so breaks the concentration of 31% of them. When people are doing one task and are interrupted by a second, it takes them an average of 15 minutes to reset to the first task. In the midst of reviewing a loan portfolio, for instance, stopping to check your email can drop your efficiency by up to 40% when you get back to the loan portfolio. The same thing happens when information is siloed. A bank employee works on a task, then realizes that they don’t have the information needed to complete the job. Where is the information? They don’t know and aren’t sure where to look. They switch to a new task: finding the missing data. This can involve looking through digital and physical files or calling coworkers to ask for help. It may be quite a while before they return to their primary task. That’s frustrating for the employee. It also translates to a friction-filled experience for the CFI’s customer, who has to wait while a worker finds a piece of missing information or a software program loads. Large and small, the inefficiencies add up. Gartner estimated work friction costs financial institutions as much as $78MM annually per 10K employees.Where should you look for work friction?In financial institutions, work friction typically hides out in a few key areas:
One way to save money is to increase efficiencies, and an often overlooked source of inefficiencies and turnover rates is work friction. What is work friction?Work friction is the time and energy lost or wasted when anything makes a job or process harder than it has to be. Simple examples might include a headphone set that doesn’t fit or a program that’s taking too long to load. It’s annoying and frustrating to deal with tools that don’t work. Fixing or replacing them takes up time and money that could be spent more profitably on other things. Work friction doesn’t have to involve a tangible impediment, though. Frequently switching between tasks is another source of work friction. Research from global enterprise cloud communication company RingCentral found that 68% of workers surveyed switch between apps up to 10x an hour and doing so breaks the concentration of 31% of them. When people are doing one task and are interrupted by a second, it takes them an average of 15 minutes to reset to the first task. In the midst of reviewing a loan portfolio, for instance, stopping to check your email can drop your efficiency by up to 40% when you get back to the loan portfolio. The same thing happens when information is siloed. A bank employee works on a task, then realizes that they don’t have the information needed to complete the job. Where is the information? They don’t know and aren’t sure where to look. They switch to a new task: finding the missing data. This can involve looking through digital and physical files or calling coworkers to ask for help. It may be quite a while before they return to their primary task. That’s frustrating for the employee. It also translates to a friction-filled experience for the CFI’s customer, who has to wait while a worker finds a piece of missing information or a software program loads. Large and small, the inefficiencies add up. Gartner estimated work friction costs financial institutions as much as $78MM annually per 10K employees.Where should you look for work friction?In financial institutions, work friction typically hides out in a few key areas:
- Siloed information. Customer data that exists across multiple, separate systems provides a disjointed, time-consuming experience for employees trying to assist customers. If a teller needs to gather loan information that only a loan officer has, obtaining it requires far more additional steps than it would if the data was stored where the teller has easy access.
- Call center frustrations. Phone trees that don’t reliably recognize voice commands or won’t easily allow a caller to speak with a human being are a common source of agitation. Employees also deal with software that unexpectedly quits because of the sheer amount of applications they need to have open or data fields that don’t auto-populate, which increases the time spent resolving a customer’s issue.
- Multi-step approval processes. How many people need to say “yes” before you can issue a statement credit, undo a clear bank error, approve a credit card purchase, approve a credit limit increase, or send out a new debit card? If more than one or two approvals are required for a simple task, it might be worth considering streamlining the process for the customer, the employee, and the growing line of other customers waiting their turn.
How can you resolve work friction?Here are a few tips to help you discover and address work friction in your own CFI:
- Work with individual teams. Work friction sources will vary across teams, so a one-size-fits-all, company-wide approach will not work here. Starting small will help you build a more complete picture that will give you the opportunity to tailor your solutions to each of your CFI’s divisions.
- Identify the work friction type. Ask each team where they and their customers typically get frustrated. Ask them to note when the worst moments occur and what category they fall under. Is the problem related to technology, such as physical hardware or software issues, processes, such as approvals, or people?
- Resolve based on impact. With that information in hand, streamline individual pain points and prioritize resolving them based on how that inefficiency is affecting your bottom line. Keep talking to employees as you try out solutions. They may already have good ideas about how to fix frustrating situations. At the very least, these are the people who can tell you whether your interventions are making their work lives better.
Work friction — anything that makes work tasks more difficult and time-consuming than they need to be — can cost CFIs time, money, and customer goodwill. Working with individual teams to remove work friction can help improve a CFI’s bottom line and client relationships.
