Over recent years, it’s become clear that the future of banking is self-directed. Consumers continue to show preference for digitization and self-service, wanting to bank when and how they choose. Further, consumers increasingly look to engage tellers for higher value, consultancy-type conversations instead of routine transactions. Finally, financial institutions continue to optimize the use of brick-and-mortar locations as they manage operational costs. While the result of these shifts is typically less focus on the branch, a physical presence of some sort continues to be a key component of many bankers’ strategies.
Maintaining a meaningful physical presence while responding to these changes presents an ongoing challenge. As a result, many financial institutions are evolving their branch strategies and reimagining their physical footprints. Options such as implementing smarter branch technology and outsourcing the self-directed banking channel are emerging as effective solutions. However, there are steps banks must take to make such modernization work.
Incorporating more automation in-branch
Many banks have opted to expand the use of smart technology, such as implementing Interactive Teller Machines, to offer customers digitally optimized options both in and away from the branch. A wide variety of tasks can be efficiently completed on the machines, which can supplement the traditional ATM functions with the ability to speak to a remote teller through the device. Transaction types can include cash withdrawals, transfers, check deposits, statement generation, balance inquiries, ID scan and more complex teller-assisted transactions, such as account openings and loan initiations. ITMs’ ability to handle more complex transactions helps enable a strong customer relationship and the human touch while also increasing efficiency.
Banks are using ITM technology to help optimize branch strategy by deploying them in locations where a larger physical footprint isn’t necessary. ITMs are also being used to extend branch hours. In fact, according to Forrester’s ITM Sentiment Study, since introducing ITMs, 41 percent of financial institutions have improved efficiency between 10 percent and 20 percent. And over half have seen a decrease in session wait times.
There remains some work to be done to introduce consumers to the capabilities of ITMs. According to the same Forrester’s ITM Sentiment Study, 56 percent of consumers don’t know what an ITM is, and only 41 percent have used one. This could be through marketing efforts, digital communications, branch signage or training employees on how to teach customers to use the machines.
Banks must also help enable their digital and physical touchpoints to work together. Many institutions have multiple siloed channels built during various eras of the industry, creating layers of legacy systems built on outdated technologies. This results in disconnected, inconsistent customer experiences in today’s digital-first world. To respond to this, banks are modernizing and connecting their teller systems to other engagement points, like ordering ahead for change orders using a mobile device and picking up in a branch locker. Using APIs to break down transaction silos and converge these once disparate channels, banks can facilitate more modern, seamless interactions both inside and outside the branch.
Reimagining ATM management
The ATM network is another element of the branch strategy that is currently undergoing widespread evaluation. While ATM endpoints remain a crucial component of digital transformation, the traditional ATM deployment model — with its high capital requirements, multiple vendor relationships, frequent upgrade cycles and quickly-evolving experiences — can hinder innovation and reactions to changing market forces. Rising support costs, aging technology and the continuous search for talent only make matters more difficult.
Because of these challenges, an increasing number of institutions are choosing to outsource partial or complete management of ATM operations, from ownership to management, via an “ATM-as-a-Service” model. Allowing a trusted partner to take over distribution, installation, maintenance and cash management can free significant bandwidth, allowing bankers to focus on their mission-critical initiatives and their customers.
Such an approach creates notable efficiencies; banks no longer have to spend many employee hours on maintaining expertise across the ATM channel. Large expenses associated with major hardware and software upgrades are eliminated. Dedicated professionals can oversee compliance and security efforts, especially beneficial as attracting and retaining specialized talent remains difficult. Arguably most importantly, this approach can create a better customer experience. Such a model optimizes availability and uptime, and the right partner will help quickly introduce new features and functionality as innovations emerge.
If you decide to pursue an ATM-as-a-Service approach, you should prioritize partners that have the necessary level of expertise and a track record of success and reliability. You may also want to seek a partner that has its own off-branch-premise ATM network, allowing you to reach your customers at the retailers they shop and visit most often — and even wrap those off-branch ATMs in your own branding to drive visibility.
As the shift toward self-directed banking accelerates, bankers have an opportunity to optimize their physical footprints, delivering physical touchpoints in a way that meets customers’ needs while also satisfying their increasing expectations for convenience, speed and robust features and functionality. Those who consider options such as embracing more sophisticated branch technology will be well positioned to strengthen their competitive stances while boosting efficiencies and delivering exceptional customer experiences.
Don Layden is the EVP and president of NCR Banking, overseeing solutions such as NCR ATM-as-a-Service and NCR’s Allpoint Network that help financial institutions transform, connect and run their businesses.