From interactive teller machines to high-tech signage, more branches go digital

Gain more insights into the value of modern branches as part of omnichannel strategies in our Executive Report: Evolution of Banking Branches.

New technologies continue to be introduced in the branches to enhance the customer experience—as well as to make employees’ lives easier.

The migration of transactions to self-service is continuing to accelerate in the branches, including leveraging interactive teller machines, or ITMs, says Stuart Mackinnon, chief operating officer of NCR Atleos based in Atlanta.

ITMs can do all the transactions of an ATM but also support advanced transactions, including credit card payments, bill payments, access to extended types of transactions across multiple checking accounts and account opening.

“Other loan-related activities and problem-solving activities are also now available through that interactive video experience that you get on the ITM,” Mackinnon says. “The bank will have converted their traditional call center to one with centralized tellers who are now picking up the interactive video call from the ITM.”

Some institutions have replaced all their ATMs with ITMs as they slowly convert their branches. They’re keeping their tellers for six months or a year, until their customers are used to the technology and are comfortable with it. Tellers will walk a customer to the ITM and help them understand the technology.

Over time these banks may reduce teller hours, migrating after-hours service to the ITM. Some banks may also expand the hours of availability at the ITM, including offering full Saturday banking or even Sunday banking. Whereas some banks seek to have a consistent self-service experience across all their branches, others have moved to the hub-and-spoke model where the flagship branch maintains tellers and the satellite branches have moved to ITMs.

“In this hub-and-spoke model, customers can conduct most of their daily banking needs at satellite locations and, should they need to do something more complex, they have the option to go to the flagship location on Main Street,” Mackinnon says.

More institutions are also introducing advanced self-service devices in the lobby that can effectively deliver the same volume of cash as a teller cash recycler does behind the counter. “Branch staff can be redeployed as greeters to help customers get comfortable with the new technology, though most customers readily adopt it because the screen flows are similar to the ones they use on their mobile phones,” he says.

Solutions to maximize efficiency of cash management include transit cassettes, which allows a teller to move cash from behind the counter to out front into a self-service device without ever touching the cash and without requiring an armored car visit.

ITMs are about expansion, not contraction

“There’s still a lot of innovation to happen. Within the next 24 months, customers will be able to essentially drive the entire ATM or ITM transaction from their mobile device,” Mackinnon says. “Instead of inserting their debit card into the machine, they can just tap their card or mobile device to initiate the transaction, and the machine will then either accept deposited cash or dispense cash withdrawn from their account.”

The institutions that have been successful deploying ITMs have installed them to expand their geographic footprint without opening a branch or extending branch hours, says Rolland Johannsen, a senior consulting associate at Capital Performance Group LLC, headquartered in Washington, D.C. They have installed extensive employee and customer communication and incentive programs to encourage and reward adoption.

“Banks that have not been as successful deploying ITMs are the ones that have treated them like glorified ATMs and employed a ‘build it and they will come’ strategy,” Johannsen says.

“Branch-based self-service technology should not only be used to replace people and reduce expense, but be designed to actually enhance the customer experience.”

Regarding omnichannel capabilities, certain technology platforms do a better job than others, but right now it’s more “aspirational than reality,” he says.

Create distinct channels

However, certain types of channels are better at doing certain types of things than other channels, so banks should provide a superior experience on those things that the channels are designed to do well. For example, digital channels are designed to provide access to information to enable customers to transact certain types of business, or to provide fraud alerts or other types of information.

“What digital channels don’t do very well and what branches do well is problem resolution,” Johannsen says. “Banks should make sure that each channel is designed for the functions that they really do best, to maximize the effectiveness of each channel—rather than try to make every channel do the same thing in the same way.”

Institutions should also leverage technology to empower staff to resolve problems for customers, he says. For example, two elderly women were recently scammed out of their life savings. Both had gone to a branch to execute large wire transfers that were totally out of character for their accounts. At one branch they were denied and then they went to another branch of the same bank and their transfers were approved.

“There was nothing in the bank’s technology that allowed employees across those branches to have a consistent approach whether to approve that type of transaction,” Johannsen says. “That’s the type of thing that you want to be able to have technology do—provide valuable information about a person’s transaction history that empowers branch staff to do the most important pieces of their job.”

Three types should be in the consideration set of every institution—self-service machines like ATMs and ITMs, cash automation like TCRs and digital signage, says Gina Bleedorn, president and CEO at Adrenaline, a brand experience company headquartered in Atlanta.

“This is not high-tech, but right-tech,” Bleedorn says. “It serves the right purpose—automating predictable, transactional tasks and supporting the deepening of relationships.”

What about the wrong tech? Tech bars with tablets were “once all the rage,” designed to showcase mobile banking or provide opt-in product and service discovery, she says. But they were never used because they didn’t serve the customer’s immediate need.

“Vertical touch screens with interactive exploration or games also don’t get used for much the same reason, plus consumers don’t want the room to see what they’re doing,” Bleedorn says. “If someone wants to learn about your services, or play a game, they can do it on their own device on their own time.”

Alternatively, digital signage works because it’s the most “eyeball-catching” type of communication that can be second-screened without competing with a consumer device or inhibiting the service they entered for.

Many institutions also make deployment missteps, like not putting TCRs in open floor plans so staff headcount can be reduced.

Don’t abandon smart human connection

ITMs are in the early adoption stage, so most consumers don’t know what they are or how to use them, making migration support by staff imperative. Institutions should deploy them outside, either through the drive-through or drive-up, or standalone 24-hour vestibules in a place where there isn’t a branch presence.

“The least desirable use case is inside the branch lobby, especially presented as a human teller alternative,” Bleedorn says. “No customer that walks in is going to choose a machine over a person unless the lines are incredibly long. An ITM can be placed inside initially to teach customers, before relocating outside.”

There is a major question about whether to integrate ATMs or ITMs with the core. Core integration is more expensive and often requires financial institutions to make updates, but efficiency gains make it worth the effort for many banks, she says. Of the institutions that haven’t integrated their machines, they essentially have a dual-entry processing protocol, where they manually record ITM transactions onto their core system, and it’s not in real time.

“At the end of the day, branch technology should be in service of streamlining transactions so branches can do what they do best—support consultation, advice and relationship-building,” Bleedorn says. “People don’t want to go to branches—they need to go to branches. When they do, tech should enable frictionless service so human connection can add real value.”

Katie Kuehner-Hebert is a contributing writer for BAI.