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Video teller machines: The future of community banking?

June 26, 2014

Some community financial institutions around 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 FIs 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 complete with a camera and a live remote teller who can see and interact with customers. The machines also have check scanners and signature pads to accommodate more specific or involved banking transactions.

A simultaneous video and audio connection can help customers complete up to 95 percent of teller services that can be carried out inside a branch. It also 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 staff each 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.