The Evolving Branch Environment

While many banks are rethinking their long-term strategy for expensive branch networks, there are steps banks can take now to reduce costs and inefficiencies in the branch while providing a better customer experience.

According to SNL Financial, 1,118 more financial institution branches were closed than opened in 2012 – representing the largest such discrepancy in eight years. Yet by all accounts, the branch remains one of the most strategic assets banks have in servicing customers, delivering new products and services and growing deposits. Driven by continued consolidation within the industry, lower operational budgets and decreasing foot traffic at the physical branch, banks are evaluating the traditional branch structure to increase profitability and efficiency at the branch level and new technologies are being leveraged to achieve this.

The Teller Station

The teller’s work station is a key target area for branches to decrease operational footprints through the automation and consolidation of devices while simultaneously providing significant increases in customer convenience and satisfaction.

In its Customer Experience Report, which surveyed more than 405 retail banking professionals and more than 1,500 end-users, Cisco found that 69 percent of consumers in the United States want more simplified personal financial services and 77 percent want increased identity theft security. Perhaps most alarming in the report’s data: only 46 percent of consumers feel that their current bank can provide adequate personal service, and financial institutions seem to agree, with only 58 percent of banks feeling that they are currently capable of doing so.

These shortcomings provide a prime opportunity for banks to improve customer interaction and satisfaction at the teller station with more efficient technologies including:

• Tablets to streamline customer identification verification, stage transactions, increase information exchange and pre-sell new products. Tablet deployment and applications are proliferating in larger branches to route traffic efficiently through the branch while also creating a more personal and interactive experience for the customer;

• Instant Issuance to deliver cards on-demand as replacements for lost or stolen cards, as part of an expanded new-account opening package, or for special products such as check cashing ID cards or reloadable prepaid cards. Instant issuance helps banks avoid the loss of transaction revenue inherent with centrally-issued cards and also eliminates customer inconvenience incurred from traditional delivery. Instant issuance also reduces security concerns associated with cards that are stolen or misplaced and enhances the bank’s brand and customer loyalty;

• Teller Cash Recyclers (TCRs) to automate teller cash transactions and streamline branch cash management. TCRs allow tellers to focus on customers rather than manually handling cash. They reduce manual effort and simplify vault management practices. Next-generation TCRs promise to entirely eliminate cash “touches” behind the teller window or in the back office, even integrating cash management with ATMs, kiosks and other cash branch devices;

• Multi-Function Check Scanners that consolidate check capture, ID capture, card reading, and printing. Consolidating these functions into a single device (and in combination with TCRs) enable banks to shrink the teller footprint significantly, creating space in existing branches for more open and interactive venues for customers and expanding the potential service delivery of in-store branches. Beyond simple efficiency, these devices are enabling new teller software applications such as check cashing and sophisticated fraud checking. Additionally, enhanced check scan imaging software is now able to capture all items at the teller window and eliminate deferral and manual processing of difficult-to-read items such as money orders and WIC vouchers.

Self-Service Kiosks

Cisco’s report also found that on the global scale, 71 percent of respondents expressed being comfortable with the increasing presence of virtual communications in addition to face-to-face interactions at the branch. As a result, today’s self-service kiosks are increasing appealing to consumers on the go as they can carry out over 90 percent of common teller operations through the devices, such as:

• Secure ID Scanning for account opening and increased privacy and security;

• Handling of Routine Deposits/Withdrawals to reduce lines in peak business hours for maximum flexibility; and

• Convenience to customers who prefer self-account management and to banks by creating a hands-off environment while still overseeing transaction elements and operations.

Merchant Automation

New technology for merchant customers is enabling some teller and back office functions to move to the branch lobby and in some cases out of the branch entirely. With the development of real-time processing capabilities and advancements in overall speed and accuracy, banks are now able to deploy self-service cash and check deposit systems for their merchant customers. Operating in the branch lobby, these dedicated kiosks benefit everyone by allowing merchants to walk past the teller line and then quickly and securely deposit checks, cash and coin in a single transaction.

More sophisticated versions of these systems can be deployed in the merchant location itself. They provide convenience, labor savings, and better cash management to the merchant while reducing branch—and cash-in-transit costs—for the bank. In-store self-service deposit systems may be combined with merchant check capture scanners and TCRs to automate the front-counter in addition to back room check and cash handling.

A more streamlined reorganization of operations is best achieved by leveraging emerging technologies to match the institution’s needs with customer demand. As consumer expectations evolve, banks continue to evaluate their branch networks’ ability to meet the challenge. Today, customers expect increased access and efficiency through technology – regardless of channel. Ultimately, customer retention may depend on just how successful the branch is at delivering on that promise.

Glen Fossella is COO at CTS North AmericaCTS North America, a market leader in providing branch automation technology to the financial services industry.