Video Tellers Could be Banking’s Next Big Thing: But Will They Make Bank Branches Obsolete?
London. Would live support be helpful in Automated Teller Machines (ATM) for thorny transactions such as credit-card payments, even if the cash-dispensing stations were originally built to be free of any human intermediaries to speed up operations? And could such a structure then cannibalize local bank branches and render them ineffectual?
Such are the vexing questions now confronting banks and the financial industry in the wake of Bank of America’s announcement in early April to roll out its new Teller Assist ATMs, according to insights from “ATMs – World – 2013 Report” by IMS Research, now part of IHS (NYSE: IHS).
First unveiled by Bank of America in Boston, video and interactive tellers are starting to make some headway in the market, growing a projected 3.2 percent worldwide this year to 36,590 units, up from 35,450 units last year, and on their way to new installments by 2017 of 48,250 units, as shown in the attached figure.
Nonetheless, video and interactive units comprise just a fraction of the total ATM market, which includes other types of machines, such as cash recyclers, cash dispensers, cash deposit and full-function units. The most common type of ATM, the cash dispenser, will see 1.05 million new units installed globally this year, up from 1.01 million in 2012. All told, the total installed base for ATMs this year is estimated to reach 2.71 million.
“Customers can expect to see live video-chat options with remote tellers in video and interactive units to help them with services such as paying credit card bills or making deposits in several accounts, which typically are seen as difficult transactions to conduct on traditional ATMs because of their complexity,” said Wincey Tang, analyst for financial and ID technologies at IMS. “But while such additional services are seen to offer new benefits to the customer, many are already starting to question the future of bank branches and the purpose of its customer advisors. Will teller assists eventually cannibalize the bank branch? That is the key question.”
Financial institutions counter that the new technology can improve efficiencies. Not all bank branches will be installing the new video tellers, and most will only roll out the machines to new branches instead of retrofitting existing sites.
Still, the transition highlights the potential change in branch management. “Not only will new demand flows have to be managed,” noted Tang, “employees may have to be placed to stand by the video tellers to assist customers in using the new functions—at least for the first several months after introduction. The success and seamless ability of the video chat, therefore, remains to be seen.”
Aside from Japan, considered a very specific market, video tellers are currently gaining the most traction in North America, especially after the acquisition earlier this year of uGenius by NCR, which also makes regular ATMs, point-of-sale terminals, check-processing systems and self-serving kiosks.
“Clearly there is a place for video tellers in the ATM market,” Tang added. Its success, however, may be skewed toward off-site locations only. “The ability to speak to an advisor via a video link when a bank branch is absent not only extends the availability of services, it is also a way of reaching out to so-called under-banked areas without the cost of opening up physical branches. Upgrading ATMs that are already placed in locations like gas stations, grocery stores and shopping centers essentially can be much more efficient for financial institutions, particularly when expanding their presence within rural areas in the emerging markets.”
Whether video tellers eventually become an important part of the ATM market in the future, implementation of the new system is bound to further change one’s concept of banking, or the reason for a bank branch. “The purpose of advisors within a branch—when such advisors can be accessed remotely—will continue to be debated,” Tang remarked. “But perhaps this will be the pivotal step to kick-start significant banking changes that directly impact the customer.”
The “ATMs – World – 2013 Report” recently published by IMS presents forecasts until 2018, with analysis covering more than 45 countries and including over 350 tables and figures. Aside from sizing the market by ATM unit shipments and installed base, the study has a strong focus on major technology trends, including the impact of NFC technology, contactless payment, biometrics and touch-screen interfaces.
by the Editorial Staff
