Tired of hearing about “new normals,” “unprecedented” changes, COVID lockdowns and regulations’ effects on our society? The truth is most of the so-called COVID shifts were already taking hold. The pandemic response merely sped up adoption – in many cases by up to ten years.
The issue most businesses are having is adjusting to the speed of change. Ten years is a long time to research, implement, train and prepare for social and technological shifts. So, when a worldwide pandemic eats up that decade, it is no wonder so many are left scrambling. Whether it is hybrid offices, remote work, online retail or self-service and mobile banking, most financial institutions don't have the flexibility to pivot as quickly as consumers demand.
Holy Self-Service Banking, Batman!
Mobile banking is now the primary way most Millennials and Gen Z bank. There, we said it. The band-aid has been ripped off.
But younger account holders are not the only ones who have acclimated to branch-free or branch-lite banking. To continue managing their finances throughout lockdowns, account holders of all ages were forced to turn to digital banking, ATMs and Interactive Teller (ITM) options.
Hence, the accelerated adoption of non-branch banking services – a situation born out of necessity rather than preference. But, after a year or more of self-service banking, people are no longer in the habit of going to the branch. As of 2021, nearly half (46%) of Baby Boomers were using new banking channels. Moreover, retail branch visits have dropped 36 percent since 2017.
The rapid shift in banking habits only exacerbated the issues many banks and credit unions were having with budgets and staffing. Many older staff members took the events of 2020 as a sign it was time to retire. Still other staff members found other jobs or experienced life changes that significantly impacted their employment decisions.
Staffing shortages and a massive, ongoing decrease in foot traffic created a perfect storm for financial institutions. It was time to do more than investigate branch transformation and dabble in mobile apps. Something had to be done.
What The Branch?
For many financial institutions across the U.S., that “something” has been to reallocate their physical locations to save money on real estate and other expenses. A record 2,284 branches closed in 2020 alone. By June of 2021, branch closures had removed financial services from an additional 48 geographical areas.
But financial institutions aren’t just resorting to closing branches. Credit unions, especially, aim to be more strategic in their physical footprint. So, while they are investing more heavily in digital, mobile and online services, many credit unions are working to find more efficient ways to fulfill other needs for their members. With the unprecedented advancements in self-service adoption and demand, meeting those needs can be much more efficient and affordable than a standard retail branch.
Future credit union locations are likely to come in a variety of forms, including:
Centrally located, technology-heavy branches
Independent self-service kiosks, like ITMs
Conveniently located off-premise ATMs
These solutions have one big thing in common, a heavy reliance on self-service. Full-function ATMs and ITMs can operate for less than one dollar per transaction. The cost savings allows credit unions nationwide to refocus expenses on digital services without cutting back on financial services within the community.
Even better, increasing self-service for branch services relieves pressure on credit unions to hire new staff and enables current branch employees to focus more on customer service, building relationships and walking members through more advanced financial services such as loans and investments.
Improving Efficiencies for Better Branch Focus
Self-service technologies such as ATMs and ITMs are also an excellent way to bridge the gap between digital/mobile and physical banking. Consumers who primarily bank online expect their experience to be available at their convenience. And they don’t necessarily want to talk to a person until they have exhausted online resources.
So, how are they supposed to get or deposit cash? What about filling out a secure credit card application or updating their debit card number? Today’s full-function ITMs, hooked directly into the financial institution’s core system, can perform even these advanced requirements. In addition, should a conversation be needed, service representatives can be accessed at the push of a button.
However, some credit unions may be concerned about implementing so many new self-service machines eating into their employees’ time and energy, not to mention capital expenses. After all, most institutions experiences with ATMs involve a great deal of daily management to handle cash balancing, cash loading, service and maintenance. Fortunately, there are options to have your cake and eat it, too.
Today, there are reliable ATM outsourcing and management companies that have the expertise and dedicated resources to help their financial institution partners operate reliable self-service equipment without the headache of the day-to-day operations. In addition, these companies leverage their years of experience and in-depth understanding of these technologies to provide better uptimes, manage daily operations and even remove much of the burden of capital expenses.
Lean How Partnering with ATM USA Can Benefit Your Financial Institution
Darren Smith, Vice President, ATM Management
Craig Helmers, Vice President, ATM Management