Live vs. video tellers: video tellers cut branch costs without detracting from customer experience or satisfaction, according to banks that have used them. Are live tellers headed for extinction?

• Author: Stewart, Deb
• Position: Company overview

THE REASON THAT MOST CUSTOMERS VISIT THE BRANCH IS TO DO A "TELLER TRANSACTION." Tellers are at the heart of customer experience and are a key driver of branch costs. Tellers, who are the majority of branch employees, have been the main feature of branches for the last 100 years.

Now that bank are challenged to find a better way to branch--one with lower costs, that responds better to changing consumer expectations and that creates a unique customer experience--is it possible to reconfigure the teller function to respond to these needs?

The advent of video teller technology may provide at least a partial answer. "The core and long-term prospect for retail banking economics is the tipping point--banks have no choice but to make fundamental changes that will reduce costs and improve sales capabilities," says Bob Meara, senior analyst at Celent, a financial services research and consulting firm, New York.

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Video tellers: What are they?

A video teller solution generally consolidates your tellers into a centralized video call center. When customers enter the branch, they interact with a teller in the same way they have in the past--but that teller, visible on a video screen, may be physically located across town or in another state. The technology allows you to implement it in a way that mirrors your current teller process. If you currently establish customer identification with a debit card or photo ID or signature, or some combination, the video teller process can be the same. The goal is to create a familiar experience--but better.

Based on an experience model utilized by Conestoga Bank (assets: $600 million), Philadelphia, for its personal teller machines (PTMs), a typical transaction may go this way:

* If the customer has not used the PTM previously, the concierge will escort him or her to the device and begin the transaction by pressing a "start" button in the center of the screen. A two-way video session begins with the teller appearing on the screen. At that point, the concierge will do a warm handoff.

* The customer can elect to use a telephone handset attached to the device or simply speak to the teller as they normally would.

* At this point, the teller is completely controlling the PTM. The customer will not make any further selections regarding his or her transaction.

* Conestoga uses a photo ID to verify identity on most transactions. When the teller asks the customer for his or her ID, the ID scanning component of the PTM will light up--making it simple for the customer to navigate.

* If a signature is required, that element will light, as will the deposit slot, cash dispenser, printer or any other peripheral that the customer is asked to use.

* If there is an issue--for example, if a check has not been endorsed by the customer--the teller can return that check before continuing with the transaction.

* If a customer requests a particular denomination (a $100 bill for use as a birthday gift for example), the teller can dispense according to that request. Cashier's checks can also be provided.

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* If a deposit is being done, the customer watches an electronic image of the deposit slip being created on the screen--in the manner of an imaging ATM experience.

* The teller can visually see the customer throughout the transaction so that the opportunity to read body language (to observe that a customer is anxious or confused, for example) is...