Live Vs. Video Tellers

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12 | ABA BANK MARKETING | JANUARY-FEBRUARY 2013

By DeB Stewart

Now that bank are challenged to find a better way to branch—one with lower costs, that responds better to changing consumer expectations and that creates a unique customer experience—is it possible to reconfigure the teller function to respond to these needs?

The advent of video teller technology may provide at least a partial answer. “The core and long-term prospect for retail banking economics is the tipping point—banks have no choice but to make fundamental changes that will reduce costs and improve sales capabilities,” says Bob Meara, senior analyst at Celent, a financial services research and consulting firm, New York.

T

he reason that most customers visit the branch is to do a “teller transaction.”

Tellers are at the heart of customer experience

and are a key driver of branch costs. Tellers, who are the majority of branch

employees, have been the main feature of branches for the last 100 years.

Video tellers cut branch costs without

detracting from customer experience or

satisfaction, according to banks that

have used them. Are live tellers

headed for extinction?

Live Vs.

Video

Tellers

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Video tellers: What are they?

A video teller solution generally consolidates your tellers into a centralized video call center. When customers enter the branch, they interact with a teller in the same way they have in the past—but that teller, visible on a video screen, may be physically located across town or in another state. The technology allows you to implement it in a way that mirrors your current teller process. If you currently establish customer identification with a debit card or photo ID or signature, or some combination, the video teller process can be the same. The goal is to create a familiar experience—but better.

Based on an experience model utilized by Conestoga Bank (assets: $600 million), Philadelphia, for its personal teller ma-chines (PTMs), a typical transaction may go this way:

m If the customer has not used the PTM previously, the concierge will escort him or her to the device and begin the transaction by pressing a “start” button in the center of the screen. A two-way video session begins with the teller appearing on the screen. At that point, the concierge will do a warm handoff.

m The customer can elect to use a telephone handset attached to the device or simply speak to the teller as they normally would.

m At this point, the teller is completely controlling the PTM. The customer will not make any further selections regarding his or her transaction.

m Conestoga uses a photo ID to verify identity on most transac-tions. When the teller asks the customer for his or her ID, the ID scanning component of the PTM will light up—making it simple for the customer to navigate.

m If a signature is required, that element will light, as will the deposit slot, cash dispenser, printer or any other peripheral that the customer is asked to use.

m If there is an issue—for example, if a check has not been endorsed by the customer—the teller can return that check before continuing with the transaction.

m If a customer requests a particular denomination (a $100 bill for use as a birthday gift for example), the teller can dispense according to that request. Cashier’s checks can also be provided.

m If a deposit is being done, the customer watches an electronic image of the deposit slip being created on the screen—in the manner of an imaging ATM experience.

m The teller can visually see the customer throughout the transaction so that the opportunity to read body language (to observe that a customer is anxious or confused, for example) is not lost.

“It’s important that the video teller technology reflect your brand and your desired customer experience,” says Bob Tra-mantano, vice president of marketing NCR Corp., a technology company, Duluth, Ga. “Use an ID scanner or not, use a handset or not … you are designing the experience that will work best for your customers. We are seeing some banks create a hybrid experience—part ATM and part traditional teller. In these designs, customers may indicate the type of transaction they’re doing and begin elements of that transaction (such as ID) before the teller appears on the screen.

“With 60 percent of consumer transactions now occurring at the ATM, there is a high level of consumer comfort with this approach. In the call center, the teller experience is also uniquely yours,” Tramantano says. Most banks elect to have tellers use two video screens. One screen shows the customer an image of the human teller; the other, shows a check image or some other document used in the transaction. “With no rewrite of your teller systems, training can focus on the video teller equipment and revised customer interaction.”

“Cross sell opportunity is not lost with video teller,” says Gene Pranger, CEO of uGenius Technology, a provider of multichannel video banking solutions, Sandy, Utah. “Tellers identify sales opportunities as they normally would—through on-screen prompts or during the course of a conversation. In some instances, with faster customer identification, on-screen prompts can become even more relevant. When an opportunity is identified, the teller in the call center can instant message or call the concierge at the appropriate branch and the sale is handled by branch staff.”

Becky Falconer, senior director of Solution Portfolio Busi-ness Development at Diebold Inc., a provider of integrated self-service and security systems, North Canton, Ohio, explains how current ATM predictive capabilities can apply to video tell-ers: “We are currently making very specific, compelling offers to consumers on ATMs. Video tellers can have this same ability but with a huge benefit—the ability to close that product sale on the spot—whether through a handoff to a branch associate or to another video center of expertise.”

Why consider it?

Among his installed base, Pranger has found positive customer response with a reduction in perceived customer wait time relative to a traditional teller. He has also found a customer satisfaction level of 90 percent (1 or 2 percentage points higher than found with a traditional teller). “Our installed base has seen an average transaction time of two minutes and 10 sec-onds on PTMs, compared to two minutes and 40 secsec-onds for a traditional teller transaction.”

A view of a customer using a video teller system provided by Diebold. a video teller solution generally consolidates your tellers into a centralized video call center.

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Tramantano points to significant increases in teller productiv-ity, with one teller able to manage up to three video teller units as they become comfortable with the technology. The ability to efficiently extend hours of service is an important benefit for banks using the technology. “Think about being able to match the service hours of your grocery store partners or of a retail area in which a branch is located with minimal staffing require-ments,” he notes. “With 75 to 80 percent of sales still occurring in branches the impact of matching the customers shopping patterns can be significant.”

Pranger points to the example of a financial institution that is making cutting-edge use of this technology. At all 14 branches of the Coastal Federal Credit Union, Raleigh, N.C., customers access PTMs that link them to 36 tellers located in a video call center. “This has allowed the financial institution to cut costs by 40 percent and has allowed branch managers to focus on selling—resulting in a near doubling in product sales. Part of this growth in sales is driven by the ability to extend hours economically—Coastal now offers seven-day-a-week, 12-hours-a-day teller access.”

The ability to expand your branch footprint efficiently is also driving consideration of this technology. “By eliminating the teller line and traditional drive-up configuration, square footage requirements drop significantly,” Pranger continues. “You can now provide full service to your customers in 1,200 to 1,600 square feet, an enormous saving in construction, leases, acreage—not to mention staffing.”

Conestoga Bank rethinks the whole experience

Conestoga Bank introduced video teller in a total branch change context. Having decided to target the 18-to-35-year-old demo-graphic, Conestoga completely redefined the branch customer experience and overall product set to address this group today and into their futures.

Key elements of the branch redefinition included:

m The new branch was rebranded as “BankWerx by Conestoga Bank.”

m No traditional teller line or teller queue—video tellers are located near the front of the branch.

m A product demonstration bar with free WiFi.

wisconsin Bank Has Been Using Video tellers for 10 years

F

irst National Bank and Trust Co. (assets: $835 million), Beloit, Wisc., was an early adapter of the idea of using the cost advantages of video tellers to facilitate branch expansion. First National employed a slightly different technological approach, however.

In 2002, the bank built a new branch model and installed a video teller solution that is completely internal to the branch. Using drive-up equipment, including pneumatic tubes, First National is able to have tellers manage both interior and drive-up customers via two-way video, creating a consistent customer experience inside or out.

Laura Pomerene, vice president and marketing director, explains: “When the customer walks up to, or drives up to, the monitor he or she is welcomed by the teller on the screen. They can submit payments, make deposits, do withdrawals—anything they can do at a live teller station, only using the pneumatic tube. When tellers excuse themselves from the screen to process the transaction, the teller image is replaced by digital content. That content can include special offers, community announcements, product education—even a stock ticker and weather updates.” Using this technology allows tellers to handle two transac-tions simultaneously, whether those transactransac-tions are coming through the drive-up or an interior window. The system es-sentially cuts teller staffing requirements by half. “We did have some initial concerns about customer acceptance. We saw some older customers moving their transaction business to

branch-es with traditional teller lines. But focus groups and customer behavior has validated that they like the system. And, al-though they believe that it felt slightly less personal, they thought it was pro-gressive and understood it was installed for effi-ciency and security (this response was without prompting).”

First National has since installed the system along

with a traditional teller line in other branches, giving custom-ers the option of selecting their preferred method for making transactions. When asked if they plan to expand the technology further, Pomerene responds that they will consider it in new builds and remodels—being conscious of the demographics of the particular market.

Her advice to banks looking at the technology is “Research your existing branch demographic mix and be prepared to educate them about the service and the process. Be sure to have the ability to push marketing campaign/messaging to the systems—it works from a cross-sell perspective.”

Video tellers have been at use for 10 years at First National Bank and Trust (assets: $835 million), Beloit, Wisc. After some initial hesitation, customers now accept the system as normal, bank managers say.

One place where the video teller technology can be applied is at the drive-up window. Shown here is technology provided by NCR.

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m A lounge area with coffee and phone charging station.

m Expanded hours.

m Staffing is focused on a centrally located concierge desk. Their role is to introduce customers to the space and handle any transactions that video tellers might not be able to cope with. These transactions are completed by staff either standing at the concierge desk or seated in share offices in the rear of the space. “Our customer focus upon opening was customer education with Bankwerx associates working closely with them to introduce the new concept. Within a matter of weeks, customers were navigating the technologies with no assistance. And we found that no customers moved to another branch,” says Lori Adamski, chief operating officer and executive vice president at Conestoga.

“The customer experience is natu-ral since it reflects the traditional teller transaction process,” explains Ron Bernas, vice president of consumer sales. “The customer just pushes a button to start, and the video teller will take it from there, performing virtually any transaction per-formed at a traditional teller window. And, we’ve included an adjacent depository for incoming cash and coins to enhance the function of the area for our business customers.”

“The availability and ease of imple-mentation of two-way video technology opens many doors. We’re assessing the use of two-way video in the context of a smart office—accessing various centers of expertise including business banking. We can look at expansion sites with only 1,400 to 1,500 square feet. We all know that the traditional banking model for consumers is changing—doing it like we did it 20 years ago won’t fly. We need to have branches and products that reflect the way consumers want to do their bank-ing,” Bernas continues.

What would Conestoga suggest to others looking at this technology? “This technology is not difficult to implement. But, it needs to fit with your overall strategy—cool can only get you so far,” concludes Adamski.

Where is it all going?

The applications seem endless—we are seeing currently how video tellers can change the traditional branch experience and financial model. And that is only the beginning as banks start to explore more unique situations such as:

m “Bank at work” applications.

m Branches in schools and universities.

m Branches in retirement or low-to-moderate-income communities.

m Branches with high concentrations of “on-us” check cashers.

m Branches where teller and customer safety are of concern.

m Branches where there is a need for in-language support.

m Branches inside a retail store that would like to expand business hours in order to match the business hours of the retail store in which the branch is located.

All of these applications and others are being explored by banks around the country.

What comes next?

“Consumers are comfortable with video conferencing as Skype, Facetime and other applications grow more common,” says NCR’s Tramantano. “We need to build our solutions to provide video conferencing on a common platform across multiple consumer endpoints. So whether it’s supporting teller transactions, ac-cessing investment specialists or business bankers in a branch office or accessing video experts from a tablet or phone—it is access that the customer will grow to expect.”

“We also need to recognize that every transaction does not require a video interface—the ability for a single device to be a traditional ATM and a video teller machine will address that reality. The idea that different segments have different require-ments on different days also drives the need to apply the same video platform for various devices—for example, applying video to high capacity ATMs addresses the unique needs of the business banking segment,” says Diebold’s Falconer.

Adaption of video teller technology is moving quickly— understandably as we look at the drivers of that adaption, Tramantano says:

m Migrating transactions to a lower cost channel and increasing teller line productivity.

m Delivering highly personalized and convenient customer service.

m Enabling increased product sales and revenue growth.

m Supporting migration of teller transactions to self-service.

m Automating personal teller services up to 24/7.

m Ability to locate in both traditional and nontraditional places. “Lower costs, great experience, economical expansion op-portunities—the time is right,” says Tramantano.

“Bankers have a lot of choices ahead of them—in technol-ogy, culture, compensation, across the board—but they don’t have a choice to stick to the status quo,” concludes Meara. n

About the Author

DeB Stewart of Charlotte, N.C., is an independent consul-tant working for the financial services industry. Telephone: (704) 759-1633; email: [email protected]. It’s important that the video teller technology reflect your brand and your desired customer experience. A video teller system provided by uGenius allows customers to talk to the video teller through a telephone handset.

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The brick-and-mortar branch isn’t dying—but it’s certainly changing. How your customers behave in your retail banking space has evolved to include new methods for personal interaction, targeted messages, and hands-on solutions for real, impactful brand engagement. It’s the branch of the future—and it’s already available at Codigo.