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Why Banks Are Rethinking the Drive-Through

Drive-through teller stations, once promoted as a convenience for the after-work crowd wanting to keep Bob Dylan songs playing while depositing their paychecks, are losing some of that traffic to mobile apps. As consumers increasingly use self-service channels from wherever they wish, financial institutions are reimagining their physical footprints, including drive-ups, to adjust.

"It's all part of a larger movement to what we call the self-service era," says Genie Driskill, chief operating officer at Synergistics Research Corp. "Branches will have options for transactions inside or outside, but in a self-service mode. …drive-ups are an extension of that."

In recent weeks, Bank of America Corp. (BAC) announced it was closing some drive-through teller services in areas where usage has been low in a broader effort to respond to customer behavior shifts.

"The decision is in response to the way consumers are banking today," said a B of A spokeswoman in an email to Bank Technology News. "For example, in July, 13 million Bank of America customers used their smartphones to deposit an average of 160,000 checks per day. In addition, half of our deposits are made at ATMs."

B of A's numbers are reflective of an industrywide trend: As customers increasingly use digital channels to transact, the bank's physical footprint must evolve to accommodate the shift.

City Bank Texas, of Lubbock, has been considering the idea of slightly trimming the hours of its tellers operating in-branch and will then evaluate whether it should modify staff levels at the drive-through lanes. "The numbers aren't lying," says Jim Simpson, senior vice president and chief technology officer at City Bank Texas. "Customers are transitioning to digital platforms."

Simpson says the community bank, which offers mobile deposit and mobile bill pay and identifies a usage spike around 5:00 p.m., believes customers are going to their children's soccer practices and depositing checks on their smartphones while waiting for their kids to batter up rather than take an extra trip to the financial institution. Even so, "you still want to have the option," says Simpson.

ATM drive-ups continue to remain popular with consumers nationwide. "Drive-through ATMs are extremely attractive," says Synergistics' Driskill. "They have always been one of the top locations."

Indeed, 54% of consumers say they regularly use ATMs at a bank branch's drive-up, according to the research firm's 2013 data.

Huntington Bancshares Inc. (HBAN) has found that some drivers prefer waiting in line even when the branch or ATM walk up is unclogged. The Ohio bank has made attempts to add ATMs to locations where cars lining up bleed into the highways and discovered people prefer waiting in their cars. "It speaks to behavioral preferences," says Michael Bassani, Huntington's product group manager of branch distribution. "Customers like convenience and they like to multi-task. They think it's easier to stay in the car and respond to emails."

The observation is a signal that car banking nationwide will remain a part of the mix even as new channels provide consumers with alternatives.

"I don't think there's anything changing drive-through behavior," says Kevin Travis, managing director at Novantas, a management consulting firm. "In certain parts of the country, drive-throughs are a major part of the infrastructure. …Banks aren't exiting the personal experience. They are just changing how it's delivered and maybe even enhancing it."

Rather than die off, the channel will likely get a makeover to adjust to a digital era. "It's not a binary choice between technology and distribution," says Jonathan Velline, head of Wells Fargo & Co's (WFC) ATM banking and store strategy. "We can have both."

The combination has been making its way into branches. Wells Fargo, for example, makes use of touchscreens at in-branch teller stations to eliminate manual data entry and to better mirror its ATM experience. "We are trying to make the workflow as consistent as possible," says Velline.

The broader strategy of digitizing manual processes could extend into the bank's drive-through lanes. To modernize the pneumatic tube experience, Velline sees an opportunity to take Wells' touchscreens outside while still allowing the driver to communicate with the teller inside.

Some banks are experimenting with drive-up video tellers.

B of A says it has video teller ATMs at a few of its drive-through locations. Likewise, Huntington has been testing video at some of its drive-ups. "Video assistance is definitely a technology we are watching closely," says Bassani.

For now, Huntington's videos tellers are still operating from within the branch. One day, the tellers could be located offsite to centralize the workforce and potentially allow the bank to extend its service hours.

"As we look at self-service technology and look at video-assisted service, we have to figure out the customer experience in drive-through and how customers will adapt to new technologies," says Bassani. "We don't have a silver bullet."

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