The Changing Face of the Branch Bank: Lots of Innovation, Not All of It Good

Author:     Thursday, August 28, 2014 12:00 AM

In an effort to accommodate consumer preferences, branch banks and credit unions are seeing lots of innovation at the brand and ATM level. However, many of these innovations do not actually reflect what bank customers really need and can actually make it more challenging for customers to get their needs met at the bank.

ATM changes

Many of the upgrades at the local credit union or bank branch happen around the ATM, as banks increasingly try to find ways to make the ATM experience better, faster, safer, and so on. Today's ATM might feature automated, envelope free check deposit, interactive real-person bank tellers, on-screen ability to split a deposit between accounts, pre-approved credit or loan offers based on a customer's bank balance, and other deluxe upgrades. Banks can use these next-gen ATMs to expand their reach without having to open a physical brand, or replace the drive-through teller window with a smart, interactive ATM.

This has the potential to save the bank money by reducing operating costs. Video technology can connect customers to bank tellers over weekends and in off-hours, as banks rely on tellers located in different time zones or physical locations. However, the learning curve for customers can be steep and transactions may take longer in the meantime, as a result.

Innovation inside the bank branch

Inside the bank branch, innovation may take the form of paperless deposits or card-based account authentication measures, replacing the print medium of deposit and withdrawal slips with screen technology. Using technology to bypass the paper trail reinforces the branch commitment to reducing paper waste, while safeguarding customer information by limiting the amount of written information containing account numbers. The technology needed to create the paperless branch represents a significant expensive for the bank, so smaller banks and credit unions may have to delay this trend.

Some banks are also consolidating branches in an effort to save money, replacing the service with ATMs and a full suite of online services. For customers, this can be a mixed-bag: Those that primarily bank online will not mind losing place-based branches, while those with less of a comfort level in online banking will be upset by the shift. Other banks have taken a two-pronged approach, committing to maintain the same number of branches but limit the services offered. These banks -- which include Wells Fargo -- plan to have some technology-heavy branches with limited staffing and some full-scale branches with full staffing needs.


Source: BFI