News

The self-service branch is here

July 5, 2005

Some financial institutions are finally starting to answer the question, "How can bankers make their brick-and-mortar branches more efficient?" The answer they're finding is branch automation.

FIs throughout the world are moving toward it, according to self-service experts like Uwe Krause, global management and marketing director for Paderborn, Germany-based Wincor Nixdorf International.

This story and all the great free content on ATMmarketplace is supported by: Wincor Request free info from this company!

It's all about building your business without increasing your operational expenses. That means taking the tellers you have and using them to cross-sell customers and members while you let ATMs and transactional kiosks, also known as mini-banks, handle the rest.

"As the branch is restructured, there is a trend to make the cost center into a profit center," Krause said. "In the past, most of the branches offered services like cash withdrawal or money change, but they didn't act as sales persons and offer services that the bank could profit from."

The 21st century bank

Today, however, FIs are offering traditional banking services such as deposits and withdrawals at machines like Wincor's ProCash 3100xe, freeing up their tellers to sell profit-making products such as mortgages and loans. "This has been very successful with a lot of European banks," Krause said, and he expects the success to be experienced in the United States.

"They are opening new branches (in Europe), they're not closing branches," he added. "And they're not reducing the number of people in the branch. The target is to keep the people you have - you just have to change their job descriptions. … For example, you must not fire the teller. You must train the teller to do something different."

According to a report published by Boston-based Celent Communications LLC in May 2005 entitled "Branch Automation Solutions: The Convergence of Teller, Platform, and CRM," small to large U.S. FIs will be the first to jump on the branch automation band wagon. The branch automation space falls on two sides - those with less than $1 billion in assets and those with more than $5 billion.

North Charleston, S.C.-based South Carolina Federal Credit Union is a good example of automation in the U.S. In December 2004, the credit union, with approximately $1 billion in assets, opened its first technology branch using Diebold Inc.'s Remote Teller station and Adque Communications Screens.

The screens in the branch's lobby give members continuous information about the credit union's products and services. Scott Woods, SCFCU's chief executive, said the screens are a great way to upsell members.

A new economy

The branch also has three to four fewer employers than SCFCU's traditional branches. Woods said the branch's automation has contributed to savings, but he declined to give any specific figures or percentages.

"It's been tremendously successful," he said. "In the first five weeks of operation, we had already exceeded the transaction volumes of our other branches that have been around for years."

One secret SCFCU learned: The credit union opened its technology branch only five miles away from one of its traditional branches, so that its members would have options.

Included In This Story

---