The Truth about Remote Teller Systems

Ariel Bilskey - First American Credit Union
March 4, 2005

If you took a commercial flight last year, you may have been one of the 75 million airline passengers that checked themselves in. The lines that used to frustrate passengers are now extinct for some airlines. According to Continental Airlines’ Scott O’Leary, the kiosks make check-in essentially wait-free: “Once customers are in line at a kiosk, the mean check-in time is 66 seconds,” says O’Leary. “For those with no bags, it’s 30 seconds.”

More and more companies are looking to jump on the self-service bandwagon. Financial institutions are not exempt. They’ve also been bitten by the self-service bug, and many are researching or have already implemented remote teller systems (RTS).

Making the Change

Last May, First American Credit Union in Beloit, Wisconsin, unveiled a new RTS in our main branch after 20 years of serving the members with face-to-face tellers. Does this make me an expert on RTS? Hardly, but it was a huge eye-opener and gives new meaning to the phrase due diligence. Of all the people we spoke to during the research phase, all the articles in trade magazines we read, and all the site visits we performed, we didn’t find the most important knowledge—the things that nobody tells you. Hopefully this article will help other credit unions make informed decisions when considering an RTS. All the research in the world is worthless if you’re not asking the right questions. Here are some questions to ask during site visits or phone conversations with credit unions currently using RTS:

· How long did it take your membership to “adapt”? Did they get past the adaptation stage or did they just accept because they had no choice?

· What are the demographics and psychographics of your membership? (i.e. West Coast versus Midwest; technologically advanced?)

· What is your Internet banking penetration, and that of other electronic services such as e-statements, bill payer, check imaging? If members are willing to embrace some of these products, introducing RTS may be the right decision.

· Were you able to reduce your labor costs? For instance, First American was able to cut the number of tellers at our main branch in half (after the initial training period). On the flip side, you’ll need to be able to answer members’ questions about what happened to the other tellers. Members will ask if any of your employees lost their jobs because of the new RTS. (We did not fire anyone; any downsizing was done through attrition. The process actually enabled us to allow more tellers to cross-train in other departments as we needed less on the front line.)

· Has the system improved your transaction time? Be sure to track your own transaction counts prior to installation so you have a base. Also, consider investing in cash dispensers, which will not only enhance speed but also ensure better accuracy.

· How do you handle slower transactions at the RTS, such as money orders, traveler’s checks, coin orders, and savings bonds? Some credit unions only allow some of these transactions in the lobby. With an RTS, the ability to have the member sign a document in front of you is no longer a simple task. Many credit unions with RTS install a pass-through door with handles on both sides to process large coin deposits.

· How do you deal with cross selling at the teller line? Most credit unions invest in a video messaging system that streams news, sports, stocks and trivia, combined with commercials for credit union products. Personally, I love our video messaging system, but the overwhelming majority of our employees agree it is not equivalent to face-to-face cross selling. It’s an excellent enhancement to marketing efforts, but not a replacement.

· What were the main reasons you decided to install an RTS?

· How did you announce the change to your membership? Was there a theme during the installation period (if installing in an existing location)? We promoted the change as “Innovation Under Construction”: the construction workers, electricians, etc. wore shirts with this message. The message should be consistent in your newsletters, in-lobby signage, and other communications.

There are some obvious positives to remote teller systems. Members will enjoy increased privacy during transactions. Not having to verbalize their account number, or have other members hear that they are overdrawn will please members. The security enhancement is irreplaceable. I knock on wood as I say the RTS make it virtually impossible for robbers to make contact with your tellers.

We all know the good side; it’s the bad side that everyone wants to know about, right? The following are some areas to which you’ll want to pay special attention during your research of RTS.

Cost

This is probably the number one question. First American invested approximately $50,000 for four units, which included installation. It does not include any of the a la carte items I’ve discussed such as the video messaging system (a three-year commitment of more than $7,000 annually). The cost is for only one location but is all-inclusive and includes equipment, installation, and training.

These costs in no way represent what else is out there for RTS and video messaging systems. If you spend any time in an online marketing list serve, you’ll quickly learn there are many video-messaging vendors in a range of pricing and options. This is another monster to tackle; the vendors are very different. Some offer real-time updates with full-motion video and an unlimited gamut of options. Others operate in a less advanced mode where updates are sent in electronically for upload and on a first-come, first-served basis.

Finding a Vendor

It’s extremely important to find a vendor with previous experience installing RTS units. If you should decide to go with a first-timer (as we did), make sure you do the homework to get answers that you may have been able to get from an experienced vendor. Find another credit union that has installed the same model you’re considering and get the lowdown from them. Don’t depend on general research about these systems; the differences are too great.

Blowers

Make sure you buy a system that allows for the blower units to be remotely installed, possibly in the ceiling or in a utility room, away from the tellers and members. Our vendor had never installed the system we chose before and therefore was not able to predict the problem First American had with our blowers. The noise is very loud and extremely distracting if the blowers are installed locally. This can make or break the success of your RTS.

Communication System

There are various communication systems available — the main decisions you’ll need to make are choosing one- or two-directional, and speaker or receiver. We opted for a system where the member picked up a phone receiver in order to speak to a teller because we thought this would allow for greater privacy during transactions as their account information would not be spoken aloud in the lobby. To save a little money, we also opted for a one-directional sound system where the member has to pick up the receiver before any conversation could take place. In hindsight, we would have purchased units that allow for two-way communication as it’s next to impossible for a teller to get the member’s attention if they’re not looking directly at the screen.

Directional control of your tellers’ voices is extremely critical. One of the areas you’ll be able to promote with an RTS is increased privacy, but it’s hard to promote this when members, whether in the lobby or drive up, can hear background conversations in their speaker/receiver. To eliminate this problem, have your tellers wear headsets. It may take them a bit to get used to wearing them, but you’ll all be thankful in the long run when you dodge a privacy catastrophe.

Proximity

Pay close attention to the proximity between the RTS units. If they’re too close, your members may feel intrusion into their personal space. Again, it will be hard for you to promote enhanced privacy if the RTS stations are stacked on top of each other. Also, consider the general area around the units. Is it a wide-open space? Is it covered in predominately hard surfaces? What about flooring — is it hard surface or carpet?

Contemplate the material you will use in the area surrounding your units. Hard surfaces bounce the sound and your lobby can quickly sound like a cafeteria with just a few people in it.

As you’re considering proximity of the units to each other, keep in mind the serviceability of the system. Make sure the units you purchase are easily accessible to the service technician in the event of a malfunction.

Deposit Slips

It’s a good idea to have a separate workstation for members to prepare their transactions. Providing deposit slips at the units only slows down the transaction time. Be sure to consider the format of your transaction slips as well. In order to better fit in the pneumatic tubes used with our RTS, we redesigned our forms, which forced us to reformat the entire deposit slip. I’m sure you all know how some members can reject change; try to introduce any changes that do not need to wait until the RTS is installed in advance.

Name

Consider what you will call your system. We opted for Remote Tellers; some use Virtual Tellers or another variation. The reason we decided against using “virtual” is because it may mislead members to believe they are not dealing with live tellers. This was still a common misconception for First American’s members, even with “virtual” nowhere in the name. Regardless of what you call the system, this issue will most likely still arise, but calling them Virtual Tellers may just be adding fuel to the fire.

Promotion

How are you going to get members to like and accept the RTS? Some will automatically love the new technology, some will obviously hate it, and others will be looking for you to tell them why they should like it. Make sure your marketing and PR people distribute positive media releases to their contacts about what the RTS will do to enhance security and privacy. Find nationwide and local statistics that support the need for better security and privacy in financial institutions and in people’s lives in general.

More importantly than pumping up the members and the media is ensuring that your employees have the right attitude. Members are going to naturally look to their favorite teller or loan officer or board member to share their opinion of the new system. Like any other promotion, you need employee buy-in or it will fail. The attitude needs to be consistent from the top down and bottom up, not just management; managers aren’t the ones on the front line making the initial impact and shaping the members’ opinions.

Consider adding an Internet café. First American is utilizing the Starbucks® brand in our café, along with an appropriately sized children’s computer which has been a huge hit. Even the mouse is sized to fit a smaller hand!

Give away free stuff! Everyone loves something free. In order to get members to use the RTS, from other branches as well as those who previously relied on our main branch, we gave away free money, gift certificates, gas cards, country music concert tickets, and Green Bay Packers vs. Chicago Bears tickets to random members as they used the RTS.

Inaugural Period

Utilize your most positive, friendly, energetic people as hand-holders for a minimum of three months. If you’re opening a new location where the members are not used to live tellers, introducing an RTS may not be as traumatic. The location where First American installed remote tellers had been staffed with live tellers since 1982. First American created a round-the-clock schedule for the first month where two people were at the RTS helping members perform their transactions. We went to one person for most shifts during the next two months with a second person during busier days.

Before feeding your employees to the wolves, give them some training on how to answer tough questions and overcome objectivity. Provide a list of tips and responses, and discuss situations at all-staff meetings. Your staff will set the tone and must be able to put a positive spin on members’ negativity.

Expect a rough first three months. We were told this, but didn’t expect it to be as rough as it was—so much in fact that we recently decided to remove our RTS and replace it with a traditional live teller line. Our decision to remove the RTS was partially because of overwhelming member opposition, but had equally as much to do with problems within the system itself. Maybe if we would have selected a different vendor, a different system, or taken another route for our sound system it may have worked.

Finally, I want to talk about a few of the things that no one told us. Some of them may seem minor but believe me, they were major for some of our members and staff.

On-camera training. Tellers have no idea how much detail is seen when all that can be seen are their faces. Set up a camera to record your tellers and review it as a group or individually. I can almost guarantee that most tellers will learn they need to improve their non-verbal language and smile more!

Sensitivity training. Not every employee understands when to let go of the need to be right, and let the member “win.” Many members simply want to be heard; they understand the credit union is probably not going to tear out the RTS and just want someone to listen and be empathetic. Train your employees to “kill ‘em with kindness” as the saying goes, just not literally!

Antibacterial wipes. If your system has telephone receivers, provide antibacterial wipes for the mouthpieces. This is one of those things that seem inconsequential, but showing the members that you’re thinking of their safety, privacy and sanitary needs is all some will need to get over the hump.

Debriefing. The FBI does it after an operation. Police officers do it after a traumatic call. EMTs do it after an unfavorable run. After eight hours of putting on a happy face and dealing with angry, irritable, and outright rude members, your employees need to be debriefed. Hold weekly meetings during at least the first month if possible to talk about what your employees are experiencing. Call it the AA factor if you must, but talking about issues as a group will help.

If you decide to continue researching remote tellers, remember to look at the small picture, not just the big picture. Don’t depend solely on CUNA’s E-Scan or reports in other trade magazines; they are an excellent tools, but mostly look at credit unions in general. A decision like installing an RTS is not something to be based on what the trends show for all credit unions, or even credit unions in big cities near you. Chicago is less than two hours south of us, but our members are very different from those in the Windy City.

Some of you may remember the days of elevator attendants. The first passenger elevator in the world, created by Elisha Otis, was installed in a New York department store in 1853. It wasn’t until 1950 — almost 100 years later — that the Otis Elevator Company came up with the technology for self-service elevators. In 1955, 500,000 people in the United States were working as elevator operators. When was the last time an attendant pressed your floor button?

My point is that technology is inevitable, but it isn’t always an overnight sensation in every market. Don’t install remote tellers with a desire to be innovative and on the leading edge if those are your driving forces. Imagine if that first self-service elevator was installed in somewhere like Blair, Wisconsin, population 1,273, instead of a large city. Remote tellers may be the wave of the future, but not all of us can learn to surf at once.

Ariel Bilskey is marketing director for First American Credit Union in Beloit, Wisconsin. Contact her at 608-368-5120 or ArielB@firstamericancu.com.