About 50Ys ago, the Twilight Zone made its television debut. One of the first shows of this iconic series stared Burgess Meredith as Henry Bemis - a bank teller that had an affinity for reading. Tired of his wife nagging him, the bank president riding him and his co-workers annoying him, Bemis sought solace in his bank's vault at the exact same time a nuclear explosion occurred. Bemis emerges, only to find he has plenty of time to read (until irony sets in).
We can relate to the need for some workplace quiet. For tellers looking to get away, we continue with our theme of branch restructuring this week. Our final episode of the declining importance of the traditional branch comes in the form of the Personal Teller Machine (PTM) that some financial institutions are rolling out. At a cost of approximately $60k upfront and $20k per annum to operate, the PTM is an ATM machine on steroids, with a direct high speed video connection to a peacefully situated remote teller. The machines replace about 90% of what normally occurs in a branch including making change, taking deposits, dispensing coin/currency, printing checks, handling new account opening documents and verifying signatures. Unlike an imaged ATM, the PTM gives customers the best of both worlds â€"electronic efficiency plus human verification.
If all this sounds like the "wondrous land of imagination," know that these machines are already deployed with great fanfare. Banks and credit unions that have installed them, have usually ordered more, because of their success in reducing delivery costs and enhancing customer service. Banks can use these machines to more evenly distribute customer load by routing service to a centralized location. For example, 5 tellers can handle the load of 5 branches. Meanwhile, banks that deploy 7 can provide 24/7 coverage at each of them. At a single location, hours can be more efficiently extended, service expanded, training enhanced and the customer experience better-managed.
The tactical use of PTMs vary, as some banks use them for fully automated locations, while others use them to supplement existing teller stations during times of high traffic. PTMs change the way banks will think about future delivery. While the full service branch may always be needed, establishing a series of inexpensive satellite offices around the main branch can increase market presence, while holding down costs.
Before you jump to the standard Rod Serling-type conclusion that machines will never be able to replace people, consider that customers that use these machines report satisfaction levels very close to traditional tellers. What these machines lose in face-to-face interaction, they make up for in efficiency. PTMs can be programmed to ask a series of questions about the customer's issue and then route a call directly to a specialist. That means a much wider array of inquiries can be handled, such as foreign exchange, wire transfers and even lending questions with a limited increase in overhead.
While PTMs may not work for every bank, we predict that they will catch on in popularity and go far to bring bank efficiency ratios back to where they need to be â€" below 65%. A large portion of bank branches are unprofitable, but it is just possible that through use of technology, the economics of branch delivery can move back to your favor without going into the Zone.