The Importance of Branch Staff Ownership in Technology Initiatives: Learning from Alamo

The Importance of Branch Staff Ownership in Technology Initiatives: Learning from Alamo
A growing number of banks are embarking on branch transformation initiatives. This is important work that is long overdue. In researching the topic of video banking for the recently published report Video Banking: Lights, Camera, Transaction?, I had the pleasure of interviewing a number of banks and credit unions in various stages of implementation. While there was fascinating variety in why and how video banking was pursued among these financial institutions, two important pieces of wisdom emerged.  1. If you Build it, they won’t come – consumers are a fickle lot, and old habits die hard. Even the most elegant initiative is destined to fail without a purposeful and well-executed plan to enrol customers in the new way of things. One credit union deploying personal teller machines (PTMs) in drive-through lanes stationed employees outside the branch to explain the PTMs to approaching members, encourage their use and answer questions. They did this for several weeks. Later lobby deployments used a similar approach. People often need encouragement to try new things.  2. None of this happens without branch-level ownership.  Several banks and credit unions enjoying successful initiatives spoke of the importance of a sound change management plan – one that inspires ownership broadly throughout the organization. As Stephen Covey asserts in his best-selling Seven Habits of Highly Effective People, without involvement, there is no ownership. With this in mind several early adopters of video banking devised a variety of ways to inspire involvement in the new initiatives:
  • Distributed customer testimonials solicited during an early pilot
  • Organized an internal Q&A web presence so the curious (as well as the detractors) could get questions answered
  • Sponsored happy hours (after close of business) in newly reconfigured branches. Employees working in traditional branches were invited so they could see things up close and personal and ask questions. One credit union spoke about how transformative this one effort was; how many entered sceptical and critical, but left thinking the new branch was pretty cool.
The end result of several of these efforts was an excited and energetic team at the branch level. And it was the enthusiasm of the frontline staff perhaps more so than the technology that led to successful initiatives. Alamo As an example of how not do launch new initiatives, consider Alamo. It installed self-service kiosks in most of its airport rental locations, with the objective of better serving customers as well as doing so at lower costs (sound familiar?). While I can’t comment on the results broadly, I did see them in action a short while ago while traveling through Boston Logan airport. It was early on a Saturday afternoon. The place was packed, with a queue of 15 to 20 waiting in line for counter service. Meanwhile the three kiosks had no activity. I was tempted to try the kiosks, but was fascinated by their lack of use. I decided to wait in line so I could chat with the Alamo staff. Perhaps I could learn why no one was using the kiosks.
Alamo offers self-service kiosks that nobody uses

Alamo offers self-service kiosks that nobody uses

  After a wait of roughly 15 minutes, I was well-served by a pleasant and knowledgeable Alamo associate. Moreover, I enjoyed personalized assistance finding my car and loading our oversized luggage (we took our tandem bicycle with us on vacation). The self-service kiosk mystery was also speedily solved with one simple question posed to the Alamo associate. “Hey, how come no one uses those self-service kiosks over there? The place is packed, yet everyone seems content to wait in line to see you.”  His thick Boston accented response was telling. “Yea, corporate installed those a while ago. I guess they work all right, but no one seems to use them.” Four Alamo staff worked busily behind the counter that day. If one of them had stepped out from behind the counter to introduce the long line of customers to the new self-service kiosks, it could have been a very different Saturday for its customers. That would have required branch-level ownership.

Personal Teller Machines: The Next Evolution of ATMs?

Personal Teller Machines: The Next Evolution of ATMs?

Last week NCR announced a partnership with uGenius that will result in a new NCR device adding real time video to the ATM experience. The new NCR APTRA Interactive Teller ATM, based on its successful SelfServ 32 platform will add hardware components such as a Speaker, photo ID scanner, signature capture device, microphone and handset along with uGenius software at the ATM and in the back office. The uGenius software will be installed along with NCR’s own APTRA Activate. The announcement did not commit to availability or pricing for the new personal teller machines.

Celent thinks personal teller machines will be the next evolution of ATMs for three reasons:

  • PTMs deliver improved customer intimacy with a modest cost increment over ATMs – still delivering lower per transaction costs than traditional branch transactions.
  • PTMs will broaden the transaction mix versus ATMs – thus far an unproven assertion (I think).
  • PTMs will likely show improved sales lead generation results over ATMs through the more personal interaction with a live teller.

But how and where will PTMs be used? Coastal Federal Credit Union used uGenius PTMs to fully replace traditional branch tellers in its 15 depositoy branches while extending hours of service – and at the same time reduced teller staffing costs by over 40%. An impressive feat! Coastal’s case study is available in a recent Celent report: Branch Banking in a Multichannel World Part III: Case studies in Branch Transformation. But, how many financial institutions will be so bold? We anticipate more surgical adoption such as branch vestibule self-service, mini-branches and replacement of conventional pneumatic drive-through mechanisms.
Coastal FCU's PTM

Coastal FCU's PTM

Regardless of the adoption mechanisms, the partnership is a good thing. uGenius delivered a solid concept and has the market research to suggest strong consumer acceptance of PTMs. But, it lacked the scalability and credibility to win over the larger banks. NCR changes all that. Moreover, the resulting NCR APTRA Interactive Teller ATM will be superior to the uGenius PTMs in several ways. For starters, the devices will be PCI compliant so consumers can authenticate the way they’re used to doing – using a debit card and PIN, rather than relying on a photo ID scanner. And, we expect the units will be fully Check 21 enabled and integrated with legacy teller systems. But these are window dressing compared to the primary differentiator. The new device isn’t just a PTM. It can function as a multifunction ATM or a PTM at the customer’s discretion (if so enabled by the financial institution). So, tellers may not be needed or used for the millions of consumers more than comfortable with self-directed ATM transactions. But for those in need of coaching or just plain preferring a human interaction, the PTM’s remote teller will be at your beckon call. This, in our opinion, is a natural evolution of the ATM.

The Growing Importance of Self-Service

The Growing Importance of Self-Service
Reg. E changes, the Credit Card act of 2009, the Restoring American Financial Stability Act – all have eroded banks ability to generate revenue. While the full extent of the damage this legislation has caused the industry remains to be seen, one clear implication is that banks must shed costs. For example, in a July 2010 Celent survey of 200+ financial institutions, two-thirds of respondents cited cost reduction as one of their top-3 retail banking priorities. Shedding cost is relatively easy. Doing so without compromising sales and service delivery is a significant challenge. Celent sees self-service becoming increasingly important in the new normal. Here are several recent examples.
  • Chase is offering essentially free remote deposit capture (RDC) solution to small business customers as long as they make a requisite number of monthly deposits using RDC. The implicit objective is to reduce the branch traffic along with its related costs.
  • Bank of America is piloting a new eBanking account which is free to customers using 100% self-service channels. Using the branch for those customers will result in an $8.95 fee.
  • Chase began offering mobile RDC capability to iPhone users of its mobile banking solution. Mobile RDC offers a low-cost self-service deposit capability that, by definition, keeps check deposit transactions out of the branch.
  • A small but growing number of credit unions led by Coastal FCU in North Carolina have extended branch hours, not by keeping the branch open longer, but by deploying vestibule personal teller machines (PTMs) that combine ATM like experience with real-time video conferencing with tellers housed in a centrally located call center. Doing so has provided extended branch hours at a fraction of the cost of keeping full-service branches open longer.
The common thread among these examples is customer pleasing service delivery at significantly lower cost than the traditional branch banking service model. Is there any doubt that the trend will continue?