Time has been one of the enemies of teller capture adoption, most notably the perception that lines at branches will get longer if tellers are responsible for scanning checks.
But for Kade Pederson, teller capture is right on time.
"We believe it improves time in line," says the senior vice president and banking support director of Spokane, Wash.-based Sterling Savings Bank, a $12 billion-asset bank with operations in several western states. "Tellers are scanning and not keying any information, so there's half the transaction work."
Sterling finished a 10-month, 200-branch teller capture deployment just under a year ago, and in the time since has measured benefits including reduced facilities costs, lower staffing levels, lower courier costs and intraday clearing.
The bank was able to eliminate three of four processing centers, and scaled down operations at the fourth from 15 people to less than 10. Peterson also said the bank — which deployed Goldleaf Financial Solutions Inc.'s image capture technology, integrated with Open Solutions Inc.'s core processing, S1 Corp.'s Full Service Banking teller system and Orbograph Ltd.'s image quality and usability assurance and image recognition — was able to achieve project return on investment in eight months and "seven figure" savings in operations expense.
There have also been intangible benefits, such as the ability to improve geographic coverage and analyze future staffing needs. "Some of our branches are in remote locations," Peterson says. "When we couriered checks, we would have to take checks out as early as 2 p.m. With teller capture, they're open all day on 'same day' business."
Teller capture is branch capture's more extensive, and expensive, cousin. In branch capture, the personal computer and scanner are connected to a central server. In teller capture, the system is integrated into a teller system. A consumer deposits a check to the teller, who runs the checks through a scanner to create the image. Teller capture distributes the work, and also allows transactions to be executed in front of customers. "If the deposit is out of balance, for example, the teller can work with the customer to figure out the problem and make sure it's corrected," Peterson says. "It's better to solve a problem in front of a customer instead of at a processing center in the evening."
Teller capture can cost about two to three times more per branch than branch capture — the difference being primarily in the number of work stations. For most branches, about four to six teller stations are outfitted with scanners, as opposed to one device and one additional work station needed for branch capture. "Branch capture is less costly in terms of up-front (capital expenditure), but the back-office savings from teller capture are greater because all of the work is balanced by the teller rather than in the back office," says Bob Meara, an analyst for Celent.
But the cost gap between branch and teller capture, which has scared off some banks in the past, is improving. In 1998, scanners that image both sides of a check cost about $1,200 each. The price has now widely fallen to $300 or less.
"The ROI for teller capture has never been as good as it is now," says Charles Potts, a senior vice president at Goldleaf, which had deployed teller capture at about 160 clients totaling more than 54,000 seats as of June. He says that count has increased about 20% over the past two years. Goldleaf faces competition in the teller capture space from companies like Fiserv Inc., Jack Henry & Associates Inc., Wausau Financial Systems Inc. and Fidelity Information Services Inc.
"[Reduced equipment] cost is one of the biggest issues driving adoption," says Dick Drew, the chief marketing officer of Bluepoint Solutions Inc., which has about 40 teller capture clients, about half of which have signed on in the past 18 months.
The lower scanner costs attracted Bluepoint client Home City Federal Savings Bank, a $141 million-asset bank in Springfield, Ohio, which is deploying Bluepoint's teller capture products on a monthly rental basis. The bank initially deployed branch capture in 2007, when it found teller capture to be too expensive. It's now plotting a project that will outfit 10 teller stations at its two locations with capture capabilities — the bank is currently coordinating with Metavante Technologies Inc., its core processing vendor, and is hoping to be deployed within the next few months. "We'd been approached a couple of different times on teller capture, but we've decided that now we can work it into our budget," says Donna Williams, the chief financial officer and vice president of operations for Home City.
Despite the case presented by banks like Sterling and Home City, bank adoption of teller capture is still slow. Celent projects teller capture adoption of about 30%.
"Banks have traditionally been reluctant to move functions to the teller because of backups at the teller line,"says Bob Hunt, senior research director at TowerGroup, an independent research firm owned by MasterCard Inc.
The irony is that teller lines probably won't increase, because the extra teller duties are offset by increased automation. Meara says deposit wait times at teller stations are actually faster up to about eight items.
Williams says Home City will be able to overcome delays by utilizing a "pause" trigger for customers with lots of checks, with scanning completed after the customer departs. Sterling, likewise, has the option to defer capture until several minutes after deposit.
