Jonathan Velline, an executive vice president at Wells Fargo, likes to use the word engage in discussing the role of the branch. As banks modernize their branches and provide more self-service options such as tablets and video-equipped kiosks, they have to guard against losing the human touch, he says.

"We see in our data that teller and banker interactions increase customer engagement," says Velline, who oversees Wells Fargo's 12,000 ATMs and 6,000 branches. "There's a tight correlation — if you have an engaged team in your store, they're going to create an atmosphere that leads to better customer engagement. Our investment in technology and design is focused on the team member, making sure their technology is good."

"Apple is not saying Apple stores are dead," says Velline, who spoke at the Best Practices in Retail Financial Services conference last week. "They're trying to figure out, How do we create a connected environment in which the Apple stores, the iPad apps, the website, the whole ecosystem for their customers works together. That's what we want to build and it's what customers demand, to make the experience they get in each channel as excellent as possible."

There's too much emphasis in the banking industry on cost per transaction, Velline says. "It's important to know what your channels cost, but there's a bunch of problems with this. First of all, these are fixed costs. Channels don't replace channels, they add to your customers' use of your institution. Which is a good thing — your customers using you and visiting you is not a bad thing. Managing costs is important. But customers don't choose you because you're good at saving costs. They choose an institution because of the service it provides."

Wells Fargo customers who use four channels are 1.8 times as profitable as customers who use one. "I want you to use everything and you're going to get value from us," Velline says.

Wells Fargo looks at channel and enterprise loyalty metrics, rather than cost-cutting measures. "Our primary goal is increasing customer engagement within all our channels. I love it when customers visit tellers, ATMs, branches, mobile and online."

In its branches, Wells Fargo has added a touch screen at every teller window that's similar to an ATM screen. The customer swipes his card and taps in some of his own transaction details. "It's faster for the customer and for us," Velline says. "We're reducing the cost per transaction by making the workflow faster."

The new teller interface does the work for a teller the way ATMs do the work for customers, Velline says. "If the tellers have an easier time, they're smiling and they like the technology, that's going to rub off on the customers," he says. "The engaged team leads to an engaged customer which leads to revenue growth."

At the same time, Wells Fargo is trying to personalize its ATMs, which it calls Know Me ATMs. The ATMs put customers' most common transactions at the top of the screen, and provides an ATM cash tracker that helps people see their bigger financial picture. It also offers digital receipts and the ability to donate money for charity.

"We try to do little things on that interface to engage customers differently," Velline says. "Donating to charity doesn't have a big business case. But we added the ability to donate to Superstorm Sandy victims within 24 hours of the storm hitting the East Coast, and raised $1.3 million within two weeks for the Red Cross. The impact to our brand was great, the reaction on social media and customer feedback was strong. Did it cut costs? No, but it created a more engaged customer, which is good for our business."

After its merger with Wachovia, when Wells Fargo replaced the acquired bank's ATMs with its own Know Me ATMs, satisfaction among former Wachovia customers increased by 10%, Velline says.

"We had asked them beforehand, what drives your satisfaction, and the ATM interface did not register," he says. "After we made the change and we asked them that question, the ATM interface was the No. 1 driver of satisfaction."

Wells Fargo has also invested in better technology for ATM service technicians. "We had all this great technology on the front end for our customers, but when we went to the back end, service team members saw a green screen," Velline says. "We would hire millennials and then give them a history lesson in what computers used to be like. Now when you look at the back office, the service team members get the same interface the customers get."