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Interactive Teller Machines

As teller transactions continue to be on the decline each year, financial institutions are exploring new and better ways to define the overall branch experience. Branch transformation seems to be an everyday part of our vocabulary as designers for financial institutions, since banks and credit unions seem to be in constant evolution with their facility design.  Branch networks are challenged to provide more efficient operations and staffing, but yet to provide the needed coverage of inconsistent branch teller transactions, while continuing to provide enhanced services to differentiate themselves in their marketplace and reinforce their brand.

One approach that seems to be gaining momentum is the introduction of Interactive Teller Machines or ITMs.  These devices are capturing the attention of the financial industry because of the potential to reduce both personnel and operating costs, while offering greater security features and reducing the risk of fraud and the threat of robbery.  Financial institutions staff the ITM’s with live tellers, serving several branches and drive through facilities from a central location or call center by means of real time video.

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Advantages of ITM’s include:

  • Allowing person-to-person transactions through a device
  • Extended hours through drive through and ITM lobby without keeping the entire branch open and staffed
  • More efficient use of personnel for other financial services
  • Reduced facility size due to a resulting smaller staff

In an article in Louisville Business First, Jim Spradlin, President and CEO of Park Community Credit Union, describes the new Interactive Teller Machines that give users the feel of personal service with the efficiency of an ATM as the “evolution of the teller line.”  A person operates the ITM from a remote location and engages with the user via live video. Spradlin said the credit union will evaluate the need for more tellers, but he expects 15 to 18 machines in total by the end of the year.  “We wanted to be a leader in technology,” Spradlin said, “… but we didn’t want to lose that personal connection.”  Spradlin also said the ITMs have been well-received. Most visitors weren’t familiar with the machines, so Park Community employees walked members through the process.

Financial Institutions need to be more creative and “think outside the box” with their branch distribution network.  From the statistics that we keep hearing, more than 75% of all new relationships originate from the branches, and therefore the physical locations are very important to the financial well-being of your organization.  Branches also still require personnel to handle the transactions that are most profitable for their institutions, such as loans, mortgages, credit issues, and other customer service needs.  These personnel, who are sometimes referred to as Universal Tellers or Universal Bankers, can handle any type of financial transaction and can manage the operation and the customer relations of the branch facility.

But, as for the declining transactions at the teller counters, ITMs might be a viable solution to address the limited, inconsistent, and often simple teller transaction.  The ITMs allow the personal touch of a face-to-face transaction without the expense of multiple tellers servicing a single branch, and more effective management of the unpredictable walk-in traffic.

If your institution is considering the possibility of the ITMs, there are a number of design considerations that must be taken into account. Through our research, due diligence, and design process in helping our clients determine the feasibility of this approach, we have been fortunate enough to have meet with and assist organizations with the implementation of ITM’s into their branches.  Visiting multiple branches and evaluating how the devices function, and understanding the environment and physical facilities that they operate in, and then designing facilities around the ITM model, has provided us with great insight into the elements that must be considered and designed into the surrounds and/or spaces adjacent to the devices.

Visibility of the ITMs as one enters a branch facility is important, like seeing the teller counter and/or teller pods upon entrance.  Security is also of utmost importance.  Therefore sight lines and the physical surroundings of the devices need to be considered to assist with privacy of a customer’s account or personal information on the screen.  Another security concern involves the actual conversation between the customer and the interactive teller.  The interaction between the customer and the call center operator or remote teller can often be louder than a normal conversation. The surrounding materials around and near the device should be acoustically designed to absorb sound so that the conversations do not reverberate throughout the facility.

Are these ITM machines leading to a potential demise of the ATM and teller counters?  According to a report by USA Today, “As rural populations decline, it becomes more difficult to maintain a brick and mortar facility in their communities, and with the new technology, those facilities can improve their reach.  In urban markets, it allows for a more 24/7 concept, and in both urban and rural, eliminates traditional “bankers hours.”  The cost savings allows for extended hours of operation and the ITMs are known to be a deterrent to robbery, making branches safer for patrons and employees alike.

Is the ITM the right fit for you and the culture your bank or credit union is trying to create?

Deanna Liter, VP of Data Services for River Valley Financial Bank, says the Interactive Teller Machine they installed in their new branch last summer in Jeffersonville, IN is slowly increasing in transaction volume.  “We are optimistic that the use of the ITM technology will grow as the branch grows,” says Liter.  “We think that a possible reason for the slower adoption rate of the ITM is a result of having it in addition to the drive through pneumatic tube system option.  People are creatures of habit and will use the tube system and bypass new technology if given the choice to stay in their comfort zone.  I think branches considering ITMs would have more success locating them in a drive through without the pneumatic tubes so that people wishing to use the convenience of the drive through will feel more compelled to try this innovative new technology.”

In summary, the ITM offers a new opportunity for banks and credit unions and it takes careful evaluation to decide if ITMs are the right solution for your institution. There is no “one-size-fits-all” answer to branch facilities. We are still working with branches that value the personal touch of a teller staff and in some areas the branch serves as a place of social interaction for customers. Finding the right mix of technology and personal interaction depends on your specific regional market and your institution’s commitment to the needs of your customers.