Technology for the Smaller Branch

By Deb Stewart

Coming innovations include varieties of self-service, assisted-service and experience-enhancement technologies.

As consumer behaviors change, banks are adjusting their branch strategies across functions to create a differentiated, financially viable model. Areas likely to evolve include: staffing, network configuration, branch design and (almost universally) technology.


Let’s survey the various ways that banks are leveraging technology to address shifting consumer needs—as well as bank profitability hurdles. New branch-based technology can be organized into three distinct experiences:

  1. Self-service technologies: These are completely consumer directed, as ATMs have functioned for decades.
  2. Assisted-service technologies: These can combine the efficiency of self-service with the very personal service experience provided by branch associates or can simply enhance the traditional one-on-one service experience.
  3. Experience-enhancement technologies: These raise the bar for building a unique customer experience by enabling personalized communications and enhanced sales support for associates.

Here’s a more detailed look at each of these areas:

  1. Self-service technologies

Advanced-function ATMs

According to NCR Retail Banking Research, Duluth, Ga., there are about 415,000 ATMs in the United States. Of these, 160,000 are deposit-enabled (including envelope deposits), and about 80,000 are automated deposit (advance function).

“Mass deployment of advanced- function ATMs started with the big-five banks,” says Brian Bailey, vice president of marketing and strategy for NCR. “Scale and service allowed them to implement quickly and economically. Deployment is now spreading across segments, creating a new level of convenience for customers while changing the banks’ operating cost models.

“Best-performing organizations have successfully migrated 50 percent of counter deposits using these devices, with a typical range of 20 percent to 50 percent. It all depends on marketing and consumer education and takes into account how bank and branch staffs are compensated,” Bailey continues. “Interestingly, adoption of mobile check deposit hasn’t impacted ATM deposit rates. Consumers are just depositing more frequently.”

With the rapid adoption of automated deposit, what additional features are coming for these devices? Some development will focus on extending features and experiences that consumers are familiar with in other channels. The flexibility of touch screen ATMs enables greater design and function consistency with mobile and online experiences.

But hundreds of users touching the screen everyday has some downsides, one being addressed by a unique partnership between Diebold and Corning Glass. “Offering antimicrobial glass on frequently touched surfaces such as the ATM touch screen will help financial institutions address the concerns of the public,” says Frank A. Natoli Jr., executive vice president and chief innovation officer, Diebold, North Canton, Ohio.

Collaboration among the mobile, online and physical channels are becoming more common. Emailing or texting ATM receipts responds to consumers’ desire for a paperless experience. Pre-staging ATM transactions on a mobile phone is in pilot at a number of banks. This allows consumers to enter their desired ATM transaction on their mobile device and receive a unique PIN code. This code enables customers to access an ATM simply by capturing the QR code on the ATM screen, and then entering the unique, one-time PIN.

“More banks are working to create a standard look and feel across channels. This standard look and feel will quickly evolve into consistency in key areas such as authentication. The growing acceptance of biometrics in identification will accelerate the evolution,” says Raja Bose, vice president, branch transformation and advisory services at Diebold.

Video ATMs (interactive tellers)

These devices bridge the worlds of self- and assisted-service technologies. “When you combine the power of 24/7 convenience with human interaction and decision making, that’s where consumers will see real value,” says Bailey. “For example, if there is a withdrawal limit associated with customers’ ATM card, and they are in a situation where they require more cash, a video teller 24-hours-a-day can decision whether to modify that limit.”

These devices are being seen with greater frequency (and success) in the drive-up—typically a branch zone with low satisfaction scores. Far more business transactions can come through the drive-up with this technology, depositing multiple bills or checks and providing cash with specified denominations.

Bose points to variations in implementation of these devices. Some allow video tellers to “take control” of the device and complete the transaction for the customer while others use the video teller as support only when the customer has a question or issue during the transaction.

Interactive tellers add a new layer of marketing to this traditionally self-service technology, creating opportunities for associates in the branch or through closed-loop follow-up through the phone to complete the sale. “The profitability of that customer improves. Banks are seeing tangible profitability resulting from this new channel,” adds Bailey.


  1. Assisted-service technologies

Technology is also changing the ways branch staff will work with customers.


The traditional teller queue is disappearing as universal associate models move banks to a single, proactively managed queue. “The universal staffing model has brought greater efficiency to queuing,” says Scott Peters, head of consumer services at Regions Bank, Birmingham, Ala. “Moving from two queues to one, we’re finding that two or three universals in a branch with two video tellers can move customers through the branch quickly and create a great experience,” he continues.

Wells Fargo & Co., San Fransico, has also found the single queue in its neighborhood stores to be efficient. “We are still finding significant queues in some traditional branches, especially in communities that use our Express Send (foreign wire transfer) product extensively. We are working to manage these situations through multiple wire transfer desks and our Make An Appointment service,” notes Jason Carey, channel manager at the bank.

Teller and platform systems

The applications that support traditional branch transactions are also changing. Many banks including Regions and Wells Fargo are running both teller and platform systems on common terminals. Branch associates are able to toggle between systems, creating a more responsive customer experience. It is expected that the next generation of this approach will be a converged application environment.

Cash recyclers

Cash recyclers have also become commonplace in the universal associate model branch as the cash handling function is re-engineered. Typically four universal associates work from a single device, which also becomes an overnight safe for the branch.

Tablets for sales and service

Tablets are entering the branch as part of the service choreography. At Wells Fargo’s neighborhood stores, tablets are used to perform traditional sales and service transactions. They are also used in tandem with advanced-function ATMs. Staff members can authorize the ATM to make changes such as increasing or approving a customer’s daily ATM withdrawal limit.

Bank of America has deployed a total of 5,200 tablets in 1,400 of its financial centers. Tablets are used for both servicing and new account opening. But their primary use is more focused around identification of the customer in front of the associate (are they preferred, retail, small business, etc.?), then talking to them about potential opportunities and routing them for their needs to the best associate. The teller and platform functions on the tablets are separate but continually update in real time.

Also, various types of kiosks are popping up in the lobby. “There is confusion in the industry between kiosks and interactive tellers (video ATMs),” notes Bailey. “Technology is relatively consistent between the two. The question is what experience do you want to deliver to the customer? Kiosks are customizing the customer experience.”

  1. Experience enhancement

Eighty percent of account openings still occur in-branch. New technologies are working to support an enhanced experience in the branch and in sales interactions with branch staff.


Appointment setting

Online and/or mobile appointment scheduling is available in many banks today. Wells Fargo was an early adopter of this technology and calls it a success. The bank is now testing ways—including incentives of various types—to encourage customers to make that appointment before they come to the branch.

Wireless local area network (Wi-Fi)

Wi-Fi availability for staff and customers is becoming more common. “Wi-Fi and a transformed communication architecture are really important to banks. It will help branches to improve customer experience as staff is untethered from terminals,” says Bailey.

Customer access to Wi-Fi is serving a few roles. SunTrust offers customer Wi-Fi in its Atlanta “test and learn” branch. Each month, more than 1,000 customers have logged on to use their own device in the branch. Perhaps most important is the use of those devices to introduce services such as mobile check deposit or initializing an online account. Ultimately, this offers the opportunity for banks to become more paperless—sending collateral, e-statements, e-receipts and others directly to the customer’s device.


Branch merchandising is seeing increased levels of personalization. Each Wells Fargo branch features a digital screen highlighting community imagery and news as well as bank promotion specific to customer segments frequenting that branch.

“Customers enjoy the experience because it’s targeted to them,” says Carey. “We are working to create messaging to a unit of one. IBeacon technology is one path to that end. If customers have the Wells Fargo app on their phone, the beacon will turn that app on when they enter the branch. Initially, messaging may be just a personal greeting. Over time we will use real-time data to drive offers to the customer’s mobile phone as well as to our merchandising screens. And sometime in the not-too-distant future, this technology will let branch staff know who has come into the branch and provide information to drive better service and more meaningful sales conversations,” he says.

Social media

Social media is impacting branch technologies in important ways. Wells Fargo incorporates filtered tweets from customers on its digital screens and routinely promotes YouTube educational pieces in-branch.

The bank is testing crowd sourcing of content—encouraging customers to submit photos or Vine videos capturing, “What’s your home town?” These can be used in branch and across multiple channels making communications more personal and community oriented. As customer communication preferences turn to social media outlets, banks are exploring how to manage these exchanges.

“Most of our social media responses are managed centrally,” says Peters. “We are testing branch associates use of social media in the field. But how you can and can’t use it is really important. And, how we drive the customer onto a secure site for a sale or service transaction needs to be seamless,” he adds.

Video conferencing with experts

Supporting the sales choreography with video conferencing to centers of expertise is being tested by many banks and has rolled out in some. Generally handled as a three-way conversation, the associate in the branch remains a part of the conversation, providing continuity and facilitating completion of transactions.

“The next generation of application systems is a converged environment with a more consumer-friendly presentation layer,” says Bailey. “Potentially that same presentation layer extends into my living room with a video expert. We have seen an initial execution of this approach at Australia’s Defense Bank, where a common video backbone and presentation approach is being used across channels, either for at-home expert advice or for transactional video teller functionality at an ATM,” he adds.

So where is technology support lagging? Perhaps most notably in business banking. “Business banking customers make up about 10 percent to 15 percent of branch customers,” says Peters. “Sixty percent of consumers use our branch once a month, while 76 percent of small businesses use the branch once a month. It’s not as easy to do business digitally in the business banking space nor has it been easy to use ATMs, although that is changing,” he continues.

Bose points out that most automation attention has traditionally been on consumers, but we are starting to see a change in that perspective. “ATMs that allow you to deposit 200 bills at a time, coin dispensers, coin counters and automated night drops help business owners manage their cash availability,” says Bose.

 Staff and customer training

How do you prepare branch staff for all these new tools? “The first thing that you need to communicate is that spending more time in front of your customers provides opportunity,” says Peters. “The old path was teller to sales/account opening. Now a universal banker recognizes opportunities during a service transaction that can result in greater sales opportunities.

“Talking to more customers is a good thing. Being proactive, greeting people when they come in, letting the customer know that you can do whatever they need—this provides great opportunities for the customer and for the banker.”

How do you best introduce new technologies to customers? “In many ways,” Peters notes. “Through merchandising and ‘what’s coming’ communication. But the greeting process is key—and results in high levels of customer satisfaction when done consistently. Be prepared to answer questions about teller jobs and branch staff opportunities. Customers want to make sure technology hasn’t had a negative impact on the people in their community,” he adds.

 Deb Stewart, based in Charlotte, N.C., is an independent consultant working for the financial services industry. Telephone: (704) 759-1633; email: [email protected].