NAFCU Services Blog

Jun 20, 2013

The Branch's Love/Hate Relationship with Technology

Originally posted on NCR Corporation’s Blog.

Guest post written by Brian Bailey, Vice President and General Manager, NCR Corporation.

NCR Corporation is the NAFCU Services Preferred Partner for ATM Products and Services, Teller Cash Recyclers (TCRs).

Technology has killed the bank branch.

You’ve heard this refrain before. Online banking. Intelligent deposit ATMs. Mobile banking. The future of mobile wallets. These technologies that make our lives easier supposedly have made the bank branch irrelevant. A dinosaur from bygone days. The financial services equivalent of the movie rental store or disco. Tower Group estimates that global teller transactions have decreased by 31 percent in the past 10 years, and forecasts an additional 15 percent decline by 2015. Bloggers such as Bank 2.0’s Brett King have declared the branch dead because … hey … you’ve got a mobile phone.

What doesn’t kill you makes you stronger, right?

That’s true when it comes to branch’s love/hate relationship with technology. In fact, technology has not killed the bank branch. Technology is the future of the bank branch.

First, though, as a banking industry, we need to unlearn our expectations of technology as standalone silos of consumer interaction. The world is going from monolithic ATMs standing alone outside of a branch or in a vestibule or a drive through, to a dynamic convergence of physical and digital channels. Working together, this new experience simplifies consumer transactions and creates new opportunities for bottom-line optimization and top-line growth.

Consider the work we’re doing with Wells Fargo to reimagine their bank branches. By intersecting physical design, customer and team member interaction, and technology, Wells Fargo is creating a new, smaller-footprint neighborhood bank format that allows the bank to put stores in convenient locations for their customers – areas that couldn’t previously accommodate a traditional larger size branch. Wells Fargo – who is clearly a pioneer when it comes to technology innovation – is also leveraging technology to empower its employees and provide better, faster service for customers.

Our design and user experience teams have worked with Wells to help create a branch format that is more usable – as opposed to 60-70 percent of the branch being available to the public, 90 percent is “public space” for collaboration. Space that once would have been allocated to teller lines, non-value-add back office space and a separate ATM channel has been converged into a useful, convenient, common area accessible to the customer, virtually 24 hours a day. The branch has become a welcome destination for service and discussion, instead of just transacting. And Wells Fargo employees will become the centerpiece of an interactive dialogue with customers, instead of transactional elements to a store visit.

Through the integration of technology into a new branch design we’re not only simplifying the consumer experience, we’re also helping simplify the IT infrastructure and platforms. The technology in the branch works as one entity so that employees and customers have a single view no matter what technology platform they engage inside the branch. Wells estimates that the new branches will run at 40-50 percent lower operating costs than their typical branch.

What Wells is doing is extremely innovative within the industry. We’ve also worked with other financial institutions taking different approaches but in a similar spirit of converging physical and digital channels to create a better customer experience. Consider Coastal Federal Credit Union in Raleigh, N.C., which has replaced all of their in-person tellers with video banking kiosks and ATMs. Coastal has now generated crucial metrics demonstrating the benefits to growth and optimization: an 86 percent increase in teller service hours while realizing 41 percent reduction in overall teller salary costs; and they are growing at a rate of 200 new customers accounts per month with higher customer satisfaction scores, facilitated by this new channel.

In the future, we believe there are even more opportunities to deliver this simplified branch experience and integrate it with mobile devices and other technologies. Four out of five product sales that originate in other channels conclude in the branch, so the branch’s relevancy to consumers has not changed. It’s our expectations of how physical and digital channels work together within the branch that must change in order to complete the transformation of branch banking.

NCR Corporation recently worked with NAFCU Services to host a webinar on this topic. View the recording.

NCR Corporation is the NAFCU Services Preferred Partner for ATM Products and Services, Teller Cash Recyclers (TCRs).

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