Blog

Theres more to branch transformation than ATM deposit automation

March 5, 2014 by Terrina Rishel — CEO, ATM Authority, LLC

Facing today's consumer demands, financial institutions are becoming increasingly aware of the need to offer an omnichannel experience. Annual growth rates are up for mobile, online and ATM, while branch use has contracted.

The evidence is clear that consumers are loyal to experiences, not brands, which only intensifies the need to rethink every customer touch point. Gone are the days of being transaction focused — it's all about the relationship now.

Market factors

FIs are experiencing unprecedented pressure on P&L; in many cases, revenues are down and security and compliance spending are up. The reality of high cost-to-serve ratios has created the need for laser-focused strategies that optimize retail delivery networks.

Many banks and credit unions have expressed that their biggest cost is labor and real estate. When CEOs evaluate retail delivery solutions, they want to know whether they can optimize their workforce and decrease their overhead.

The FIs that have embraced true branch transformation have realized that traditional approaches to growing market share are not sustainable. After decades of implementing self-service solutions such as ATMs, online banking and call centers, the industry is still struggling to find ways to optimize retail delivery.

While ATMs have added significantly to consumer convenience, they cannot perform enough complex transactions to eliminate an institution's greatest costs. Adding check imaging at the ATM may have some positive benefits and improve the consumer experience, but there is much more to branch transformation than just ATM deposit automation.

Unfortunately, there are still many complex transactions that cannot be performed at an ATM. Additionally, many consumers are still not comfortable operating an ATM or using a PIN.

Financial institution needs

Financial institutions are asking, "How can we reduce our focus on traditional transactions, centralize our workforce, reduce our real estate overhead and develop a sales culture?"

One reason why the APTRA InteractiveTeller solution from NCR Corp. has become so popular is that it gets to the heart of this question. AIT case studies have demonstrated that FIs can reduce unproductive teller time through centralization, downsize real estate costs with smaller branch footprints, and introduce new sales- and service-focused personnel models. Consumers have readily adapted to this teller-controlled device that does not require an ATM card.

Case studies

It's interesting to watch the different strategies unfold where the AIT has been used:

One credit union replaced its traditional tellers with AIT video tellers, which resulted in a 69 percent increase in sales per FTE, a 41 percent average reduction in teller costs, an 86 percent increase in service hours a 138 percent increase in teller referrals.

A Canadian credit union wanted to increase membership in a market where they could not justify the cost of building a branch. Instead, this CU created a "smart branch" at a community center, offering teller services 12 hours a day, 7 days a week through AITs. This strategy has resulted in an 8 percent increase in membership and a 15 percent increase in assets.

An institution in Texas wanted to operate smaller branches and pass the cost savings on to consumers through new and better product offerings. After deploying the AIT solution, the FI was able to reduce branch costs by 62 percent and decrease FTEs from 24 to six.

A mid-sized bank in Georgia wanted a low-cost, high-efficiency sales- and service-focused branch network. They replaced the pneumatic tubes in drive-ups with AITs. The very demographic that this FI feared would be uncomfortable with the change — older customers — actually loved it because they no longer had to get out of the car to have a teller service their needs. Some customers commented that while traditional tellers want a deposit slip, with the AIT they could deposit their check without one.

Summary

All demographics are adapting more and more to video transmission communications. With the acceptance of mobile, tablet and Web cams by users of every age, consumers aren't just becoming comfortable with the video contact center service model — they're beginning to expect it.

Financial institutions are painfully aware that in a harsh P&L environment, to survive and compete they must become proficient with multifocused, customer-driven strategies and offerings while simultaneously delivering smart, cost-effective solutions in every channel.

FIs have discovered that true branch transformation requires them to look beyond mereATM automation to discover truly effective solutions that realistically address their biggest cost centers — labor and real estate.