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As banks reimagine their branches, BTN's Mary Wisniewski spends the day with American Heritage Federal Credit Union's video tellers. The Philadelphia credit union offers an example of what the future teller looks like: offsite and visible to members through a Skype-like experience on personal teller machines.
September 17 -
As they reimagine their branches, banks are also testing ways to modernize their drive-through stations to adjust to a digital era. Ideas include using video tellers and touchscreens.
September 4
As digital banking grows, bankers are looking for ways to manage excess space in the 95,000 branches across America. Enter the interactive video teller machine.
The machines, which provide ATM functionality and access to a live teller
But unfortunately, the move to interactive video tellers doesn't always succeed. Consumers want to know, "Why would I drive somewhere to talk to a video screen?" Many banks are offering the machines to customers with only a vague sense of the business case justifying the multi-million-dollar investments.
To find a video teller strategy that works, banks can learn from others' past mistakes. Here are six things to avoid:
Giving customers too many teller choices
Some banks have given customers a choice between teller options, but that strategy can quickly backfire. Their branches include a live teller line and an interactive teller model, just like a retail store offers the option of a checkout line with a live person versus an automatic scanner.
With both teller options available, customers tend to line up for the live tellers while the machines gather dust. The reason is that customers fear change. But the good news is that if you take away the option they are most used to, they will adapt.
Failing to communicate the perks
Some banks' use of interactive teller machines hasn't caught on because customers aren't fully aware of their benefits. Banks need to get the message out. For example, video tellers can be at the heart of a marketing campaign advertising longer hours. The machines let banks cost-effectively extend business hours since video tellers can work multiple branches from a centralized location. To deliver the perk, bank executives should do detailed analyses of customer usage patterns to know the magic number of video tellers needed to support the machines.
Hiring live staff to facilitate remote video machines
The point of using video teller machines is to reduce teller staff and save money. So banks that add greeters and other staff to handhold customers through the interactive teller experience accomplish nothing for the bank's bottom line.
Sure, there will be a need to provide education and assistance to customers. But to maximize return on investment, executives must ensure they reduce or allocate 30% to 50% of their staff.
Half-measure teller pilot programs
There is nothing wrong with a bank executing a small-scale video teller program. It lets the institution test the machines and treat the expense as just part of research and development. However, don't expect to save on staff costs unless you roll out at least 12 machines located in areas with consistent traffic. That said, bank executives must also be cautious diligent when deciding how many machines to purchase. The devices are much more expensive than an average ATM, and there is little price transparency.
Failing to focus on sales
Using interactive video tellers means that the remaining live branch staff, who no longer have to handle cash transactions, have more time. But some banks fail to use that extra resource availability to focus on retail product sales and loan production.
Banks need to make sure that using the interactive tellers results in staff devoting more time to sell products and services to customers in the branch. Management must encourage tellers to become proactive with customers to discover what product or loan they might need.
Underestimating the implementation task
Some banks fail to realize how big of a project implementing the machines are and they end up making mistakes that undermine their ability to gain employee buy-in and customer adoption.
The key is to be prepared. Integration with the core system, expanded bandwidth to support video, new space for centralized tellers, training front-line staff, new skills and hiring requirements for branch staff are but a few of the items that will need to be addressed during implementation.
Jim Burson and Ryan Rackley are senior directors at Cornerstone Advisors. They can be contacted, respectively, at
