IBM Unveils Virtual Teller Kiosk of the Future

He phrase virtual teller may bring to mind a mechanical gypsy at an amusement arcade. But today's virtual teller solutions are nothing to laugh at. According to experts, the benefits of teller-assisted kiosks for banks range from improved staffing efficiencies to stronger security.

In March, IBM unveiled its Interactive IBM Bank Kiosk. According to Luigi Di Pace, leader of the IBM Innovation Lab in Bari, Italy, IBM is in negotiations with three Italian banks, which he declines to name, to launch pilot programs with the new system.

Noting that a live teller interacts with consumers at the kiosk via a video monitor, Di Pace estimates that 80 percent to 90 percent of face-to-face transactions can be performed at the interactive kiosk, with the exception of currency handling. A webcam set up at a live teller's workspace connects that teller with a customer at the kiosk, he says. This enables more efficient utilization of staff, Di Pace contends, because tellers at remote locations can be called into service. He adds that all transactions at the kiosk are photographed for security purposes.

"On the operator's desktop, a J2EE application is installed to remotely control the virtual teller, the audio/video stream and the remote devices," Di Pace explains. "This application runs on the operator's desktop as a toolbar, so the operator will work on his actual teller window . ... Working in this way, no integration is needed with the core banking application."

Armonk, N.Y.-based IBM provides the software and the hardware, including a specialized scanner and printer, Di Pace says. The virtual teller also employs IBM's Sametime solution for audio/video/telephony integration.

The interactive kiosk was designed to serve less technically savvy customers who want the convenience of self-service banking but who won't -- or can't -- use Internet or mobile banking channels, according to Di Pace. "It's basically new [self-service] for non-expert customers," he describes.

Are Consumers Ready for Virtual Tellers?

"We expect targeted virtual teller and self-service kiosk utilization by U.S. financial institutions, not widespread replacement of [live] teller stations," says Bob Meara, a New York-based analyst with Celent. "Consumers ... are increasingly putting self-service options to use for the perceived speed, convenience and ease of use these self-service options deliver."

U.S. banks have had mixed results with earlier virtual teller solutions. Beloit, Wis.-based First American Credit Union ($150 million in total assets), for example, installed a remote teller system in mid-2004, only to remove it just nine months later, according to Ariel Bilskey, the credit union's director of market development, who declines to name the vendor.

Bilskey explains that while the credit union hoped to decrease staffing costs and improve security, "Our members overwhelmingly wanted the face-to-face teller line back." The system had "too many faults," she says.

Better results were reported by Baltimore-based Johns Hopkins Federal Credit Union ($190 million in assets). JHFCU deployed Diebold's (Canton, Ohio) teller-assisted walk-up banking unit, RemoteTeller System. In 1998, JHFCU placed eight RemoteTeller units in a new branch location instead of the traditional lobby teller counter. Since then, according to Lynn Gregory, VP of marketing, the credit union has installed RemoteTeller stations in two more branches (most recently, in August 2007). "Our customers are very happy with the solution," Gregory notes.