A bank in a box

At first glance, new banking tech may feel a little anonymous. In reality, it’s a powerful tool for building and bolstering valuable personal relationships with customers. We talk to some community banks that are building entire branches around technology.

By William Atkinson

New banking technology has a lot of benefits, among them reduced expenses and staffing needs. Customers, from the up-and-coming Generation Z and millennials to baby boomers, are demanding technology that makes banking faster and more convenient. And many younger customers would be comfortable conducting all of their day-to-day banking without ever seeing a human being.

But while new banking technologies may require fewer staff members, they are adept at helping banks increase contact points and strengthen personal relationships with customers, something that is especially important to longstanding customers.

Building closer customer relationships with ITMs
One of the newest technologies offering both efficiency and personal service is the interactive teller machine (ITM). An ITM is similar to an ATM, but with a significant additional feature. In an ITM, a live teller from the bank appears on a screen to assist customers with a variety of activities, such as making account withdrawals, cashing or depositing checks, receiving loan payments and making transfers between accounts. ITM deposits are posted to the customer’s account immediately, unlike ATM deposits, which can take a day or more. In addition, the presence of an actual teller allows customers to cash checks to the penny, with coins dispensed through the ITM. Customers also can ask the teller basic account questions and even schedule appointments for additional banking services.

The first bank in Tennessee to offer ITMs was Tower Community Bank in Jasper, Tenn., with assets of $150 million. The bank created a strategic plan focused on efficiency, customer experience and customer convenience.

“ITMs provide a higher level of technology than ATMs, but they [also] bridge the gap between no person-to-person contact and actual in-person contact.”
—Lorie Heller,
Tower Community Bank

“We did some research and found that ITMs would provide all of these,” says Lorie Heller, senior vice president and chief experience officer. “ITMs provide a higher level of technology than ATMs, but they [also] bridge the gap between no person-to-person contact and actual in-person contact.”

Tower Community Bank deployed its first ITM in December 2015 and currently has 12 in operation. Some are at the branch locations, and others are at remote, stand-alone locations. Branches with ITMs have been able to close their drive-throughs.

Convenience first
Customers appreciate the longer hours available for talking to tellers. ITMs offer service from 7 a.m. to 7 p.m. on weekdays, and 9 a.m. to 1 p.m. on Saturdays. Since customers can talk with a live teller before and after work, this eliminates the need for them to visit a branch in person during their lunch hours, when everyone else would also be there
standing in long lines. The bank’s ITMs are dual-functioning, meaning they operate as traditional ATMs during hours that the video tellers are not available.

“Acceptance has been very strong,” Heller says. “We arrange for customers to be trained on how to use the ITMs by the employees they personally know at the branches. In fact, we had one business owner who likes the ITM so much that he brought his own employees in to show them how to do transactions.”

Another bank finding success with ITMs is The Citizens Bank in Philadelphia, Miss., with assets of just over $1 billion. “We wanted to stay on the cutting edge and stay ahead of the competition,” says Jackie Hester, vice president of marketing. “We wanted to provide as easy access to banking as possible for our customers with technology.”

This has led to several technology introductions for the bank, the most recent of which is the ITM, which the bank refers to as “a bank in a box.” The bank currently has four ITM/ATM dual machines in place and plans to roll out even more, eventually serving 20 of its branches.

“So far, customers like the convenience and speed,” Hester says. “They don’t have to go into a branch. They can just run by the ITM.” ITM service at The Citizens Bank is available from 7 a.m. to 5:30 p.m. on weekdays. “We may add even more hours if demand increases,” she says.

Parke Bank in Sewell, N.J., also with assets of just over $1 billion, introduced its first ITM in September 2016, when it opened its Collingswood branch.
“Collingswood is a neighborhood that is really expanding, with a lot of foot traffic, stores and places to eat,” says Daniel Sulpizio, senior vice president and director of retail banking. “As a result, the demographic tends to be younger, with a lot of millennials, which is why we knew that technology was going to be important to attract them to the bank.”
The branch’s ITM and a separate, full-function ATM are both located in a 24-hour service area adjacent to the branch. “We make sure that we have people welcoming new customers to the branch, giving them tours and explaining how the technology works,” he says.

The Collingswood branch itself is also inviting to its younger customers. There is no teller line, the writing counter has an iPad, and there is free wi-fi and coffee. Customers are also able to conduct transactions with individual employees if they wish.

Southern leader—Tower Community Bank was the first bank in Tennessee to offer ITMs, where customers can speak to a teller live (right). It currently has 12 ITMs in operation, some at stand-alone locations and others at branches; branch locations with ITMs have been able to close their drive-throughs.

Café or bank?
While ITMs are becoming a successful way to bridge the gap between technology and human contact, the real future of this “bridge” in community banking may already be in place at Brooklyn, N.Y.-headquartered Dime Community Bank’s new branch on Bedford Avenue in Williamsburg, which it opened in July 2017.

“The Bedford Avenue branch is the latest evolution of a transformation for us that began three years ago, when we began shifting away from being a traditional thrift bank to becoming a full-service community commercial bank,” says Michael A. Perez, senior vice president and director of retail banking at the $6.26 billion community bank.

The bank’s goal is to provide fast service, allowing customers to come into the bank during hours that are convenient for them, engage in their banking transactions and then be on their way—with or without having interacted with a human being.

“We wanted to make sure that we balance technology with the human aspect of customer service,” Perez says. “So we don’t look to technology to replace our employees, but rather to provide employees with additional tools so they can serve their customers better.”

The branch itself has three defining features. First, it is tiny—only 433 square feet. Second, it feels at one with the neighborhood’s aesthetic, with its reclaimed wood and exposed brick decor. Third, it is “open air.” “We wanted to create a facility that is not only friendly and inviting, but also blends in with the other businesses in the community,” says Perez. “Access to the bank is similar to access to a number of the trendy restaurants in the neighborhood and in other cities around the country. The whole front portion of the building opens, creating a truly open and inviting space.”

Perez says passers-by are curious about the branch when they walk past it for the first time. “They don’t even realize it is a bank, because it doesn’t look like one,” he says. “Because of its open environment, a lot of people think it’s a café.”

How can I help you?—The Citizens Bank in Philadelphia, Miss., currently has four ITMs and estimates that 20 of its branches will eventually be served by ITMs. The bank might also extend its ITMs’ opening hours from the current 7 a.m. to 5:30 p.m.

Inside the branch, there are no tellers and therefore no teller lines. Instead, customers have the option of using advanced ATMs to conduct their transactions. In addition, the branch offers free wi-fi, so customers can use their own mobile devices or personal tablets. “We also offer self-service tablets, so customers can get additional information about Dime products and services, as well as conduct transactions,” Perez says.

Convenience is also emphasized. The branch is open from 10 a.m. to 8 p.m. Monday through Saturday, and 10 a.m. to 4 p.m. on Sunday.

Universal appeal
So how does Dime’s “branch of the future” build relationships with customers? Through a universal banker. “For customers who want to sit down, have a cup of coffee, and talk with a banker, the branch provides that opportunity, too.” This person is a universal banker, which Perez defines as “a hybrid of a teller and a relationship banker.” (For more on this topic, see the September 2017 issue of Independent Banker at independentbanker.org.)

Dime’s universal bankers, who meet with customers in intimate workspaces called pods, can help customers complete financial transactions, access account information, open accounts and even arrange for lines of credit. The branch provides its universal bankers with wireless Microsoft Surface Pro tablets, so they can perform their services for customers quickly and comprehensively.

“The goal of the universal banker is to build and develop meaningful relationships, not just offer products and services,” Perez says. “Instead of a customer having to go to a teller station to complete a transaction, then go somewhere else in the bank to open a new account, and then go to yet another location for another service, customers can do all of these in a single location with just one banker.”

But universal bankers offer more than convenience to customers: They build strong relationships. Since Dime’s universal bankers handle so many different services, it allows them to establish deeper relationships with their customers than if customers dealt with a number of bank employees who might not communicate with each other.
“We receive feedback from customers of the Bedford Avenue branch that they feel they have established real connections and deeper relationships with the universal bankers,” Perez says.

The future? “Some of our customers have been so happy with the concept that they have begun referring their family members and friends,” he says. “We are already opening a second branch that is similar to the Bedford branch and are planning a third and a fourth.”

William Atkinson is a writer in Illinois.

Transformative experiences are key

According to Dave Kuchenski, director, business development—design and new technology incubation for Diebold Nixdorf in North Canton, Ohio, user experience is at the heart of all technology. “We recently celebrated the 50th anniversary of the ATM,” he says. “What made ATMs so successful is that they are ubiquitous and convenient. They are ubiquitous in that you can put your card in any ATM around the world, and it will dispense money from your bank account. And they are convenient in that they are located in places you already are.” As such, according to Kuchenski, 50 years ago the ATM began fundamentally changing people’s relationships with their banks.

But not all technology has been this successful. “Mobile wallets have been around for a while, but they aren’t really catching on as much, because they aren’t that much more convenient for customers,” he says. “Rather than pulling a card out of your wallet, you pull your phone out. However, this doesn’t really create a new experience for the customer. For example, it doesn’t allow you to bypass checkout lines.”

Kuchenski says it doesn’t make sense for community banks to just implement technology for the sake of technology. “Some transformation of experience needs to take place for the customer, such as saving time or providing additional services,” he says.
—William Atkinson

Relieving tech-based security concerns

Fewer customers meeting face-to-face with bank employees may seem like an invitation for security breaches. However, with most new banking technology, this isn’t the case.

Parke Bank in Sewell, N.J., posted a handout on social media that stated: “ITMs create a safer environment for people withdrawing money. If you feel uncomfortable being alone while withdrawing cash, simply call a teller while you make your exchange. The presence of a video teller will deter criminals. Video tellers can watch what’s happening while you make a withdrawal and report any suspicious activity to police immediately.”

Jackie Hester, vice president and marketing officer for The Citizens Bank in Philadelphia, Miss., agrees. “ITMs pose no security issues that are different from ATMs,” she says. “They are even safer, because customers are communicating face-to-face with tellers on the screen.”

“We have a large security force in the company, and these experts keep up with current security trends,” says Diebold Nixdorf’s Dave Kuchenski. “We are always focused on staying one step ahead of the thieves. As a result, we have a lot of controls in place.”
—William Atkinson