Kiosk vs. Teller? Why It Doesn’t Have To Be Either/Or

How one credit union is augmenting their teller services with technology to improve productivity.

When AmeriCU Credit Union ($1.1B, Rome, NY) first began to implement self-service kiosks, its executiveswere looking forways to better accommodate the cooperative’s newly acquired community charter, spread across eight counties in New York. Headquartered 35 miles east of Syracuse, AmeriCU boasted only 11 branches at the timeand its teller lines showed a high rate of turnover.

In 2008, AmeriCU introduced kiosks to members at its branches. Offering almost all the services of a teller, kiosks perform everything from basic ATM functions,such as cash withdrawals, to more complicated operations, such as mortgage and loan transactions. Between 2008 and 2012, the number of kiosk transactions grew from 48,000 to more than 350,000.Executives at AmeriCU have now installed a total of 39 kiosks to service the credit union’s 121,000 members and plan on adding more in the future.

In sci-fi movies, there’s the familiar dystopian scenario where machines replace humans. On the contrary, AmeriCU has actually opened a handful of new branches and is adding more full-time employees in conjunction with this new technology. Insteadof replacing their teller lines, the kiosks which are accessible 24 hours a day complement the services AmeriCU already provides, particularly during late night hours.

If members want to drive in wearing pajamas and walk into a kiosk, they can do that,says AmeriCU COO Joe Anderson.

Here, Anderson speaks about the kiosk program, and what’s next for the forward-thinking credit union.

Tell me about the decision-making process to implement the kiosks. What problems or opportunities were you trying to address?

We received a community charter in 2006. At that time, we had 11 branches. The dilemma was how we could take more advantage of this new field of membership. Our CEO, Mark Pfisterer,had the vision that we needed to look at when and how consumers wanted to do transactions. In thinking about how to take care of more mundane tasks like cashing checks, we lookedto technology as the answer.

As with banks, our highest turnover is in our teller line, which sees about 40% turnover. It’s expensive to retain and train tellers, and it costs $4 per transaction atthe teller line to cash a check or get cash. Also, it takes $3.5 million in capital to build a new facility. We can’t afford to build 4,000-sqaure-foot branches with ten teller lines, so we looked at self-help kiosks. Implementing kiosksreduced those $4 transactions by 75%.

In conjunction, we looked at millennials, who gravitate toward self-service changes. The average age of members is 49 years old. We want to recruit millennials and traditional branches didn’t work for them.

It took between 18 to 24 months to implement the kiosks because there weren’t a lot of vendors that offered the functionality we wanted.We deployed the first kiosk in 2008. Our CEO says it’s one of the smartest things we’ve done.

How are the kiosks different than ATMs?

A kiosk is like an ATM on steroids. Our kiosks offer the ability to take cash, take deposits in the form of check or cash, and make loan payments.An ATM pretty much offers basic checking and savings services, and it won’t list accounts and other relationships you have. Really, ATMs dispense cash and some will take deposits,but they don’t give 90-day histories, or print official checks. And with most of them, you can’t make loan payments. At our kiosks, you can pull up your loan, and transfer money from checkingor savings accounts to apply to the loan payment. This is happening in real time.

Additionally, we wanted the kiosks to print official checks like money orders or cashier’s checks. Our members use 50,000 of these a year for anything from eBay to a third-party vendors that don’t want to take a personal check. Also, for memberswho have problems balancing their checkbooks and need to see what’s cleared, kiosks also show your account history as far back as 90 days. These were the most common services our members stood in the teller line for.

How are the kiosks situated in your branches?

When we build a new branch, we have six employees, two to three kiosks in a rotunda (we have greeters there), and offices that have member service reps. We have a financial center managerand one greeter who also works in the area by the drive-thru. Our three to four member service reps are more specialized and talk about mortgages, consumers loans, paying for college, andfinancial retirement. We have traditional ATMs outside and in the drive-thru.

Members have 24/7 access to kiosks. They just use their debit card to get into the building.

In the future, we’re looking at employing stand-alone kiosks. If we add video-chat capability then the member can talk to someone live. We could run 15 kiosks with one teller in a remote location who handles questions, helps members apply for loans,or gives more info on our products and services. That would constitute a brick-and-mortar branch. It would also help us get into low-income areas as an alternative tobuilding a full facility. We are considering these options.

Have you seen an increase in automated kiosk transactions? What’s the percentage of transactions that happen after-hours?

There were 48,000 kiosk transactions in 2008. In 2012, we will exceed 350,000 transactions. That is 20% annual growth. Almost 40% of transactions take place after hours, so we wanted to accommodate our members’ schedules. If they want to drive inwearing pajamas and walk into a kiosk, they can do that.

We use lobby tracking software that measures average transaction times and wait times so we can optimize staffing levels and adjust our hours. We’ve been able to shorten our hours because there is no need for extended hours. Our current hours are8:30 a.m. to 4 p.m. We’re trying to maximize when we can have the financial centers open.

We want to look at Saturday and Sunday in terms of having the office open for members to come in and talk about more complex things like planning for college, and financial literacy. The people we hire have financial services experience; some have a Series7 license.

What’s the member feedback been like?

It’s the new normal for members. They would rather go to a kiosk and do some of these transactions. Some still like the face-to-face, but we’re in a caffeinated society. People are busy. They want to get in, get out, and take care of whateverelse they have to do. They love that they can come in after-hours. They don’t have to rush. We have not had members complain that we shifted. We do have complaints if a kiosk goes down.

Have you reduced staff at all?

No, we shifted employees. We were concerned at the beginning that people would think they were being replaced.

We had 230 full-time employees in 2006, and now we have 257. We’ve basically held the line in terms of full-time-employees, but added five locations (with the same amount of FTEs). We’re more efficient. We’ll be up to 272 FTEs in 2013after new branch openings.

It’s not like we cut three employees per branch. We were able to grow branches with the same amount of staff. We’ve added to the skill level and kept employees.We’ve committed to make them better.

What are the costs of the kiosks? What was the cost to renovate your branches?

Our first-generation kiosk was $28,000. We have 39 kiosks out there. We’ve implemented kiosks in all older branches. We will do some renovations in older branches, but right now all branches have kiosks. Some older branches we just want to makenicer and update.

Older branches needed renovation to create a kiosk area that was available to members 24/7. Some required $25,000 to $50,000 to renovate. For new branches, it costs about $3.4 million to build a 2,850-square-foot facility including the physical building,kiosks, and everything it takes to make it operational.

New generation kiosks will cost $32,000 and offer more functionality, such as teller chat and non-member transactions.

What’s the plan for the future?

We’ve got it down to a science. We’re looking at opening two branches next year. What is key is >educating our members and employees. We’ve hadstaff working during traditional hours, but we’re actually going to staff up until 8 p.m. It would be nice to have someone there to walk members through these steps, especially when introducing the second-generation kiosks. You want to haveyour top people on staff in a new branch to make sure members are comfortable and have the proper instruction and education.

We’ve got a great model, but technology changes. In three years, who knows? But we think the brick-and-mortar and self-service models will be around for a longtime. We’re happy with what we have.

June 2, 2014

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