A version of this article first appeared in the March BAI Executive Report on Branches: Adapting for the modern customer. Inside the issue, you’ll find coverage on middleware upgrades to connect ATMs and branches to evolving digital platforms, smarter branch footprints overall and key considerations for branch staff management.
America First Credit Union members are asked regularly how they like to bank. More and more, their answer is self-service.
Yet that reply reflects different expectations depending on the member. America First feedback and ProSight research show that more complex transactions tend to pull members and customers inside the branch or to a contact center chat, even those banking consumers who consider themselves digital-first. For simpler interactions, banking customers and members want ease, security and round-the-clock access.
For America First’s Chad Lynch and Jeremy Deamer, supporting self-service in banking today — and as they help future-proof their 115-location, western U.S.-based $20 billion credit union for tomorrow — means building out a responsive omnichannel.
It’s an omnichannel that leverages next-generation cloud-based middleware technology that already allows a member to start a transaction via one entry point and complete the effort elsewhere if the member desires, say from ATM to branch staff. It’s also an approach that aims for longer-run cost reduction through transaction efficiency, such as doing more with ATMs, and modular scaling, like upgrading new features on ATMs in stages by building on the basic infrastructure.
And, Lynch and Deamer stress, their middleware approach is about expanding a network of smarter ATMs so that human capital is upskilled for advisory roles, problem-solving and a focus on member relationships, for instance, personalized attention for small business accounts.
Middleware at its most basic acts as a “translator” between systems and platforms that don’t easily talk to one another. For some institutions, this rethinking of hardware and software solutions has been the answer to legacy core systems that despite the name, have become largely decentralized.
“By updating our legacy switch systems with these advanced solutions, we can roll out new processes and stay flexible as member needs change,” says Lynch, who is director of ATM technology and card services at America First Credit Union.
“This is ultimately about being able to deliver innovative products and services to our members while reducing costs and introducing new efficiencies,” adds Lynch, who says First America’s daily ATM transaction count has reached roughly 2 million on peak days.
His technology partner says both financial institutions and their members and customers want banking to be more efficient.
“We’re taking many of the transactions that would normally happen in a branch environment and we’ve taken them away from the human and to a machine essentially. The key is making sure that transactions can happen to their customer or member’s satisfaction,” says Joe Myers, executive vice president of global banking at Diebold Nixdorf, who is working with AFCU on the middleware transformation.
“Cash remains a big part of this discussion. Having cash where it’s needed, when it’s needed. And it’s an expensive exercise, made even more so in a higher interest-rate climate,” Myers adds. “So I come back to this notion of improving efficiency and bringing more value back to our customers and to their members and customers.”
One AFCU phase has added cash-in-transit (CIT) cost reduction and cut ATM out-of-service instances by including ATM recyclers that share currency bill information, keep more bills on site and allows flexibility with denominations, which members have asked for. (See related article: Cash recycling evolves to help cost-prudent FIs and their customers)
What’s more, the middleware solution, for which America First tapped Diebold Nixdorf for a multistage buildout, allows the credit union to leverage capabilities that its 1.4 million customers already like.
Deamer, branch technology and innovation manager, says the next ATM phase already targeted for rollout is to add a video component (members can already push a button get audio assistance). America First already uses video teller machines in the branch and drive-thru to allow members select real-time interaction with specialists on products and services. Says Deamer, “Member feedback includes comments such as, ‘I love the 3-D video and the technology, but what I really appreciate is being connected to an expert.’”
Eventually, the aim is for video services to supplement a 24/7 ATM. The new IVTs will serve both as an ATM and as a traditional drive-up experience, but with enhanced technology supported by remote on-demand video experts. Video on-demand will be available when the member requests it and will be able to choose to transact with or without video. “This solution greatly enhances the type and availability of service to our members and creates efficiencies in branch operations with staffing while eliminating costly maintenance of aging drive-through equipment,” Deamer adds.
Near-term future growth for the credit union also includes enabling users and personnel to rely less on ID checks for authentication, rather to pre-build identity confirmation into the process with a QR code. This approach means members can stage a future transaction away from the ATM, boost security, and limit their time at the machine to mere seconds. These advancements will also make funds availability faster and clear larger ATM amount limits — all factors in demand from small- and medium-sized business (SMBs) customers especially.
Middleware can bolster a seamless, secure transaction
Security and anti-fraud protections at ATMs play a significant role in the technology, says Myers.
Importantly, he says, it’s a security focus that doesn’t diminish the seamless experience for legitimate members and customers.
“Multi-factor authentication is really important, be it through PIN, or whatever means established,” he says. “But the beauty of the technology is it doesn’t matter what form factor you’re using, that validation stays in place.”
A solution for an expanding banking branch
For $17.5 billion Renasant Bank, which operates 185 banking centers across Mississippi, Tennessee, Alabama, Florida and Georgia, two primary factors are driving its adoption of scalable technology solutions.
It, too, wants an efficient answer to customer demands for a seamless self-service interface that includes updated ATMs and interactive teller machines, or ITMs, as part of an omnichannel.
Renasant has another challenge: it is an acquiring bank and needs to sync an expanding footprint. Renasant recently acquired The First Bank, which will add another 110 branches and extend its footprint into Louisiana.
The bank has partnered with NCR Atleos to leverage a single platform so that it can deliver customer asks that span contactless card tap to more traditional branch functions, says Michelle Rivers, chief experience officer at Renasant, in a release to announce the expansion.
“We are focused on making banking more accessible and convenient while continuing to maintain critical personal relationships,” says Rivers. “But that also means we have to manage our fleet more efficiently as we continue to grow while widening our customers’ access to cash.”
Steven Nogalo, general manager of North America for Atleos, argues that banks must increasingly think like fintech competition. “Renasant can increase customer loyalty and carve out a significant competitive advantage as they continue to grow their presence within existing markets and enter into new ones,” he says.
Smart spending on ATMs and branches
Faced with the challenge of operational efficiencies, banking leaders may be asking what degree of technological investment makes sense. Scalability can go a long way, and organizations know they need to be savvy with staffing. Still, middleware and all technology is an upfront investment.
As the latest ProSight Banking Outlook (formerly the BAI Banking Outlook) survey of bankers and consumers indicates, branch demand isn’t going away overnight. And members and customers do find themselves frustrated when a digital banking experience leaves them stranded.
“More than four in 10 (44%) customers surveyed described their in-person branch experience as excellent,” says BAI Research expert Mark Riddle.
“In sharp contrast, only 11% of customers described their digital experience as excellent. In other words, banks and credit unions have miles to go before they close the gap between the quality of their in-person customer experiences versus their digital customer experiences.”
In all, it’s an argument favoring investment that melds the best of branch service, ATM convenience and expanding omnichannel technology, and yet is adaptable to M&A, to a changing consumer, and to the flexible needs of a bank or credit union right now.
Rachel Koning Beals is Senior Editor at BAI.
