Dec. 17, 2012
Richard McMurdo, principal consultant at Talaris, predicts major growth in cash forecasting technology, bank branch design and automatic customer identification for 2013:
Over the past year, the media hype around mobile technology, contactless payments and a cashless society has dominated the headlines. But when you take a closer look, it's clear that, while digital transactions have their place, cash is still the payment method of choice for consumers, and it remains at the heart of bank branch operations — including the ATMs and other technologies that count, forecast, test and dispense it.
Looking at the year ahead, I believe we will see three major changes to the way in which bank branches meet and manage the demand for cash: intelligent cash forecasting will enable branches to run more efficiently, the design of the bank branch will change dramatically and we'll see self-service technology step into new territory to enhance the customer experience in branch.
Intelligent cash forecasting
During 2012, we've seen banks implementing fully integrated cash-handling strategies. This has involved increased levels of investment in technology to enhance both the self-service channels in the branch and the role of the teller.
In particular we've seen increased interest in cash recycling and also in devices with banknote fitness sorting and counting abilities, be it desktop multi-pocket note counters, small- to medium-sized high speed sorters or teller automation devices.
This introduction of technology, as part of a wider cash-handling strategy, has worked to drive efficiencies, reduce the volume of cash stored in holdings and ensure all cash in branch is "active," rather than "idle," reducing the number of cash-in-transit visits in the long run.
Looking ahead to 2013, the need for bank branches to run efficiently will be a key priority. While devices such as counters, sorters and recyclers are already providing cash management benefits, we will see banks moving to more sophisticated cash forecasting systems where these devices are linked together.
This combination of data will allow bank managers to gain a deeper understanding of the cash cycle in-branch, and so can be used to enhance optimization. For example, fitness sorting devices, note counting devices and currency sorters will be linked to central cash forecasting systems, such as Fiserv's Integrated Currency Manager. These will process this information and give accurate forecasts, allowing banks to reach new levels of insight.
So not only can daily levels of customer cash deposits and withdrawals be predicted before they happen, but the branch manager will also know how much cash will be recycled, enabling them to make informed decisions about the number of CIT visits needed, if any at all.
The makeup of the physical branch
The design of bank branches will change, and we'll see the rise of the "light" bank branch. These will be smaller than the traditional branch and will be located on the high street for consumer convenience. These won't be a downsized model of a conventional branch, but rather, a new breed of branch that targets specific audience groups and fits their specific needs.
We can already see the beginnings of this: In Malaysia, RHB's "EasyBranch" focuses on paperless banking; in Columbia, Helm Bank has launched light bank branches with a focus on attracting younger customers; American credit unions are placing branches in malls and using video teller technology; and The Co-operative Bank UK has opened in-store bank branches, so that customers can do their grocery shopping and banking in one visit.
A running theme with these light branches is that they require less staff than traditional branches, and can therefore run at a reduced cost. In the year ahead, we'll see more banks following this trend.
The challenge of delivering light branches efficiently is that they will require a new approach to resourcing. Banks will need to deliver a consistent level of service during both busy and quiet periods, but with a reduced number of staff than traditional branches.
This needs to be managed correctly so that sales and the customer experience aren't negatively affected. To achieve this, banks will need to build a different kind of team-working culture, where flexible staff schedules are the norm and resources are matched to customer demand.
Already, the introduction of self-service technology has allowed banks to provide extended hours of service and process low-value transactions more efficiently. But the true value of this technology is only just starting to be realized. In the year ahead and beyond, self-service technology will be used to even greater effect.
Taking a leaf from the book of more customer-centric organizations such as Google or Apple, there's no reason why banks can't use technology to help provide a much more personal service to their customers. Mobile technology, card chips, thin vein biometrics, facial recognition, fingerprinting or near field communication can all be used to identify the customer without the need for them to carry a bank card.
Banks will reach a point where they can initiate customer interaction and address each person by name. Once a customer is identified, intelligent data can be used to deliver a personally tailored service, in real time.
For example, knowing about a change of circumstance and being aware of personal milestones can help tellers direct the customer to the most helpful products, and knowing about their recent online behavior can help staff anticipate what they might need in branch.
2013 will be the year when we see bank branches operating in a smarter and more integrated way, using real-time data to inform the cash cycle, drive efficiencies and improve the overall customer experience.
Branches will also begin to exist in a different format. They'll better suit the lifestyles of their customers and will be able to offer more tailored services to meet their specific needs.
For more on this topic, visit the trends/statistics research center.
art: mike licht