By Stacey Zengel, Jack Henry & Associates Inc.
Recent turmoil in the financial services industry may have changed some of the players, but it has not changed the basic mandate for financial institutions to satisfy the needs and desires of customers while generating shareholder returns. Indeed, the challenge to meet these goals has intensified. Bankers today are pressed to find ways to create efficiencies that drive a greater return on investment within the branch while still enhancing service and surpassing customer expectations.According to Bob Meara, senior analyst with Celent, "Distributed capture has evolved from a purely tactical operational improvement to a strategic technology that also improves the front-office customer experience. Teller capture is clearly the end game for most financial institutions. It will continue to grow in scope, as financial institutions seek to deliver on the dual imperatives of improved transaction efficiency and excellent customer service."
Since two-thirds of branch transaction volume remains check related, financial institutions are logically focusing their efforts on adopting technologies and processes that both streamline check processing, as well as allowing for enhanced interaction between tellers and customers. Deposit automation, particularly at the teller counter, is arguably the strongest link between increasing customer satisfaction and driving branch operational efficiencies. It allows banks to use technology that streamlines processing and reduces cost, while it simultaneously frees tellers to interact with customers to cross-sell products and services. More importantly, the benefits of deposit automation can be clearly quantified with its ROI projected early in the solution evaluation process, allowing financial institutions to assess the future financial impact of change.
While deposit automation systems generally capture, validate, manage and distribute check transactions from any point of presentment inside or outside the bank, image-based front counter "teller" deposit automation holds special benefits for both the bank and its customers. When a check is imaged at the front counter, the software does the work formerly accomplished by the teller, empowering the teller to move from the role of transaction clerk to that of a true relationship manager. Tellers enjoy a unique relationship with the bank's customers due to the frequency of visits and the comfort customers experience in depositing their funds with someone familiar to them. This positions them to sell new products and services, uncover problems and cement rapport to assure customer retention. The results are satisfied customers, more productive tellers and greater revenue for the financial institution.
From an operational standpoint, front counter deposit automation integrates customer information with advanced image processing, character recognition and electronic payment workflows to streamline processing from the point of presentment and on through final clearing. It eliminates teller keystrokes (up to 90 percent in one notable example with a Top 10 U.S. bank), and virtually eliminates customer and teller deposit errors. Bank operations traditionally involve batch processing, proofing, posting and clearing, usually under a two-day clearing deadline. By automating the process at the teller station, manual effort, including proof and encode, is eliminated to save hours of float, free more items for same-day clearing, reduce labor costs, eliminate errors, streamline workflow and generate significant cost savings for the institution.
As mentioned, there is a strong business case with quantifiable ROI to be made for front counter deposit automation. It can be argued that the revenue potential of the teller as a customer relationship manager is a subjective soft-dollar benefit, but there is more than enough data on hard-dollar benefits to build a convincing ROI with reductions in Day 1 staffing, transportation, Research and Adjustments (R&A) volume, float time, paper ticket costs and fraud losses, to name a few.
While the above arguments may sound good, the reality of today's branch deposit processing for many institutions is still typified by largely manual processes and systems that require tellers to focus disproportionately on processing transactions. Checks go through multiple manual touch points, and paper must be transported to processing centers outside the branch. Front counter deposit automation presents an opportunity for those institutions to truncate checks earlier in the process, increase their teller value and leverage their teller capture systems to reap the maximum benefits of efficiency and profitability.
Front counter deposit automation leads to accuracy and efficiency as well as allows the teller to add more value to the financial institution. While deposit automation can help banks maximize efficiencies at all points of presentment and through the entire processing stream, the bottom line is that teller-based deposit automation is an integral business case driver to achieve branch renewal. Some banks have already implemented systems, with others still mulling the possibility, but there is little doubt that it is simply a matter of time before a majority of banks implement automation at the teller line and eventually achieve full truncation. With consumer confidence in banks at a critical state, now may be the ideal time to turn your front-line staff into that critical link that keeps the branch viable for your customers.
Stacey Zengel is the general manager of imaging solutions at Jack Henry & Associates Inc. (Monett, Mo.), and since 2004 has been responsible for the product and operational direction of JHA's imaging solution suite. Reach him at [email protected].