AS CONSUMER BEHAVIORS CHANGE, banks are adjusting their branch strategies across functions to create a differentiated, financially viable model. Areas likely to evolve include: staffing, network configuration, branch design and (almost universally) technology.
Let's survey the various ways that banks are leveraging technology to address shifting consumer needs--as well as bank profitability hurdles.
New branch-based technology can be organized into three distinct experiences:
Self-service technologies: These are completely consumer directed, as ATMs have functioned for decades.
Assisted-service technologies: These can combine the efficiency of self-service with the very personal service experience provided by branch associates or can simply enhance the traditional one-on-one service experience.
Experience-enhancement technologies: These raise the bar for building a unique customer experience by enabling personalized communications and enhanced sales support for associates.
Here's a more detailed look at each of these areas:
According to NCR Retail Banking Research, Duluth, Ga., there are about 415,000 ATMs in the United States. Of these, 160,000 are deposit-enabled (including envelope deposits), and about 80,000 are automated deposit (advance function).
"Mass deployment of advanced-function ATMs started with the big-five banks," says Brian Bailey, vice president of marketing and strategy for NCR. "Scale and service allowed them to implement quickly and economically. Deployment is now spreading across segments, creating a new level of convenience for customers while changing the banks' operating cost models.
"Best-performing organizations have successfully migrated 50 percent of counter deposits using these devices, with a typical range of 20 percent to 50 percent. It all depends on marketing and consumer education and takes into account how bank and branch staffs are compensated," Bailey continues. "Interestingly, adoption of mobile check deposit hasn't impacted ATM deposit rates. Consumers are just depositing more frequently."
With the rapid adoption of automated deposit, what additional features are coming for these devices? Some development will focus on extending features and experiences that consumers are familiar with in other channels. The flexibility of touch screen ATMs enables greater design and function consistency with mobile and online experiences.
But hundreds of users touching the screen everyday has some downsides, one being addressed by a unique partnership between Diebold and Corning Glass. "Offering antimicrobial glass on frequently touched surfaces such as the ATM touch screen will help financial institutions address the concerns of the public," says Frank A. Natoli Jr., executive vice president and chief innovation officer, Diebold, North Canton, Ohio.
Collaboration among the mobile, online and physical channels are becoming more common. Emailing or texting ATM receipts responds to consumers' desire for a paperless experience. Pre-staging ATM transactions on a mobile phone is in pilot at a number of banks. This allows consumers to enter their desired ATM transaction on their mobile device and receive a unique PIN code. This code enables customers to access an ATM simply by capturing the QR code on the ATM screen, and then entering the unique, one-time PIN.
"More banks are working to create a standard look and feel across channels. This standard look and feel will quickly evolve into consistency in key areas such as authentication. The growing acceptance of biometrics in identification will accelerate the evolution," says Raja Bose, vice president, branch transformation and advisory services at Diebold.
Video ATMs (interactive tellers)
These devices bridge the worlds of self- and assisted-service technologies. "When you combine the power of 24/7 convenience with human interaction and decision making, that's where consumers will see real value," says Bailey. "For example, if there is a withdrawal limit associated with customers' ATM card, and they are in a situation where they require more cash, a video teller 24-hours-a-day can decision whether to modify that limit."
These devices are being seen with greater frequency (and success) in the drive-up--typically a branch zone with low satisfaction scores. Far more business transactions can come through the drive-up with this technology, depositing multiple bills or checks and providing cash with specified denominations.
Bose points to variations in implementation of these devices. Some allow video tellers to...