Branches Are Catching Up to the Digital Age
Credit unions are giddy about a new NCUA rule that says advanced video terminals can be counted as full-fledged service facilities, providing a new way to compete with banks by attracting members in underserved areas.
The line between ATMs, automated self service and live human teller service at branches is blurring, and in some cases disappearing altogether. It has to. Given the stress on budgets, growth of remote access and the massive overhead of a big branch footprint, it's incumbent on banks to make branch service faster and less expensive.
NCR's (NCR) acquisition of uGenius Technology underscores the pressure on banks to change their branches' form and function.
"In the last 12 months we've seen a resurgence of branch expansion, but with a different size, shape and method of service delivery," says Brian Bailey, general manager, NCR Branch Transformation.
NCR previously owned a minority stake in uGenius, and the two firms have collaborated in the past. In 2011, they teamed to build an ATM that lets consumers speak and transact with a live, remote teller. Under the new deal, NCR plans to expand its APTRA Interactive Teller, which lets consumers conduct remote, assisted-teller transactions over an ATM. The teller has control over the machine and can help consumers execute deposits, transfers and other financial transactions while at the ATM.
David Albertazzi, a senior analyst with Aite Group, says video enhances the customer experience by allowing questions to be answered in real time. It removes barriers to adoption for groups of consumers who are still reluctant to fully utilize the newer capabilities of the ATMs, such as multi-media deposit.
NCR says pilots for APTRA Interactive Teller are expected to get underway over the next six months at a number of the U.S.'s largest banks. NCR also hopes to take advantage of other uGenius technology such as SmartOffice and Online Video banking to add heft to NCR's multi-channel solutions.
"It was the right time in the market [to do the full acquisition]. We can address the market needs with accelerated pace and speed and as a combined company we can direct resources to take advantage of opportunities in North America and in international markets," Bailey says, adding there's an increasing demand for interactive teller technology in Russia, Brazil, Africa and Turkey.
Bailey says the combined companies hope to serve branch automation strategies that include self-service machines, as well as provide remote access to extend branch hours. uGenius' tech has already been deployed at institutions such as Mid-Hudson Valley Federal Credit Union, which operates 24 hours a day using kiosks and drive-through centers that connect customers to tellers using videoconferencing. Bailey says there are added opportunities to provide always-available banking on college campuses and close to office parks and other business locations. "From a customer service perspective, banks want to offer services 24 hours per day.…assisted service allows the banks a chance to offer a broad range of services [remotely]," he says. While it pilots with larger banks, NCR also hopes to compete for expanded credit union business that will result from a recent NCUA ruling that allows self-service venues to serve as branches under certain conditions.
NCR and uGenius are responding to a number of changes in branch banking as mobile banking quickly matures and foot traffic in traditional branches declines. The banks that have embarked on branch transformations hope increasing consumer comfort with digital banking can be transferred to self-service inside branches to reduce real estate and staff costs as well as make branch networks more diverse. In some early cases of new branch strategies, a larger central branch will by surrounded by smaller, more video-heavy branches; while for other institutions, video tellers are marrying remote access with a local physical presence. "Financial institutions can control their costs in terms of the folks that are at a physical location, or people that have a more specific skill set can be centrally located," Albertazzi says.
Diebold (DBD), one of NCR's chief competitors, says it offers a range of interactive and video teller services. It recently deployed its Concierge Video Service at Missoula Federal Credit Union, which is letting members connect with staff to answer questions and handle call center transactions. Diebold has also developed a suite of interactive ATMs and has also developed technology that allows users to pre-stage transactions without cards. "The ATM hardware manufacturers have to constantly look at what other types of transactions can be done at the ATMs," Albertazzi says.