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Video teller machines: The future of community banking?

As financial institutions continue to shutter branches to cut costs, video tellers have emerged as a less expensive way for them to provide face-to-face services to customers.

June 16, 2014 by Jim Ghiglieri — Senior Vice President, Corporate Communications, SHAZAM

Some community financial institutions across the U.S. are looking to a new technology to steer customers to lower-cost delivery channels. As FIs continue to shutter branches to cut costs, video tellers have emerged as a less expensive way for them to provide face-to-face services to customers.

The machines are also a way for community FIs to amp up their presence in certain locations, such as rural areas or inside a large grocery store, without investing in brick-and-mortar buildings and on-site staff.

Also known as Interactive Teller Machines or Personal Teller Machines, the devices are similar to ATMs in that they perform basic transactions, such as deposits and withdrawals. However they also come equipped with a camera — and a live teller on the other end who can see and interact with customers. In addition, the machines have check scanners and signature pads to accommodate more involved banking transactions.

[On some of these devices,] simultaneous video and audio connection can help customers complete 95 percent of teller services that can be done inside a branch. This allows FIs to offer teller services well beyond traditional branch hours and locations.

The Des Moines Register recently reported that PCSB in Clarinda, Iowa, is one of the first community banks to begin offering the new machines. The five machines PCSB has installed have allowed the bank to extend its hours and have generated more than 1,700 extra transactions in a four-month span.

According to the article, PCSB’s video tellers have completed 57 percent more transactions than their lobby and drive-up window tellers since November 2013. This is due in part to less downtime between customers, as each staff member can manage up to three machines at once.

As we continue to see rural populations decline, closing more once-thriving country branches, this technology might increasingly become an attractive option.