From streaming videos to reading road maps, new technology is changing the function and appearance of everyday activities, and banking is no exception.
A 2013 study by Pew Research Center found 51 percent of U.S. residents over the age of 18 managed their banking online, up from 46 percent in 2010. More recently, the use of smartphones and apps for mobile banking has experienced growth. A March 2015 report by the Federal Reserve found 39 percent of cellphone owners with bank accounts have used mobile banking in the past year – up from 33 percent in 2012.
“I think 30 percent of our customers now use some form of mobile banking services to transact business,” said Mick Nitsch, community bank president for The Bank of Missouri in Springfield. “I think it’s increasing very quickly. It has increased at a rate probably faster than ATM use did when ATM’s first came out 35 or 40 years ago.”
Throw into the mix mobile payment systems such as Apple Pay, and customer demand for convenience is driving local banks to join hundreds advertised on Apple’s website as already using the service, such as Empire Bank. Nitsch said Bank of Missouri is among those on the waiting list.
“We’re in the transition of technology. I think we’d be remiss if we didn’t keep up with the times,” he said.
During Springfield Business Journal’s recent CEO Roundtable, Commerce Bank Springfield Regional Chairman and CEO Doug Neff said his bank already is using Apple Pay.
“We have it and a company our size, we have to have it,” Neff said, adding while the bank currently has a low volume of customers using the service, it’s likely to grow. “You probably can’t bet against Apple. They will continue to build relationships with the big retail guys and you will want to be involved.”
The new bank tellerLocal bankers believe industry changes won’t stop at the technology in an account holder’s pocket. According to Neff, familiar physical features also are likely to change.
“I think the look and the feel of a branch will evolve,” he said. “The amount of square footage we all own may decrease. We will all have to reposition some of our real estate.”
What exactly will the inside of the bank of the future look like? Nitsch said other Bank of Missouri branches have deployed interactive teller machines – dubbed “teller pods” – which conduct transactions by prompting users through a series of steps to perform deposits, withdrawals, transfers and even loan payments.
“They’re almost like a stand-alone ATM, in the sense that the actual machine itself interacts with the customer,” Nitsch said.
He anticipates each of the bank’s 21 branches will eventually adopt the technology first implemented by the Pine Bluff location. Each machine costs between $60,000 and $70,000.
“Customers seem to navigate toward the machine and use them because they feel like they can control their own transactions,” he said.
David Cook, community bank president at Bank of Missouri’s Branson branch, said the teller pods will completely replace teller lines in the bank’s new facility, currently under construction at 1313 State Highway 238. The $2 million project is slated for completion in late August or early September.
Cook said the machines can take care of business while the human tellers interact with other customers.
“It would be like me walking into your office and standing at your desk,” Cook said of the tellers’ new positions at the tabletop interface. “You can get up and shake hands with me. It’s a very friendly atmosphere.”
Without the variable of human error, Cook said the pods are more accurate money counters and unlike traditional teller stations, the pods won’t need to hold as much money, instead reusing deposited money for withdrawal transactions.
According to Nitsch, even though staff will have to stock the machines with money, its reduced cash load offers an advantage to the bank in terms of maintaining the security of funds and the safety of employees.
“From a security standpoint, keeping less cash in the machines prevents a potential robbery situation where someone comes in and breaks into the cash dispensers,” he said. “That’s more of a security issue than it is a financial matter to the bank.”
Nitsch said another advantage is in security of funds and safety of employees.
Customer acceptance “It’s really more of a service to the customer, being able to come in and service their own accounts and conduct whatever business they need to conduct and leave,” Nitsch said. “And obviously, they’re doing that with a great deal of privacy.”
During the roundtable, Great Southern Bank President and CEO Joe Turner said although more transactions are being conducted digitally, bank buildings remain important sites for facilitating other services.
“When you look at opening accounts and making loans, that is still done in the banking center,” he said. “That’s where people want to transact that kind of business. The interesting thing is, what do technological changes mean for the branch, for the physical structure?”
While Great Southern also is installing some teller machines, Turner said customers’ reactions would dictate their long-term use.
“It remains to be seen what the customer acceptance of those is,” he said. “There will be initial pain, but I think there will be customer acceptance.”
Acceptance of the machines would mean an evolving job description for current tellers.
“The architecture inside the staff will be different,” Neff said. “What we know as a teller today becomes more a person who does everything.”
Nitsch foresees the typical function of a teller changing from one who conducts transactions to one who assists customers with other needs.
“They may be answering specific questions that maybe the machine is not capable of physically responding to,” he said. “In the long run, there is an opportunity for the bank to reduce its burden on the number of tellers in the bank and expand the number of customer service representatives that would be able to service the customer, and provide loans or other products and services using that manpower.”
In addition to teller pods, Cook said the new Branson branch will include voice-recognition security systems and an updated community room integrated with Apple TV and accessible through mobile devices, enabling the bank or guests to conduct video conferences and webinar training.
Even with all the bells and whistles, Cook doesn’t believe the new technology can replace the human element of customer service.
“The equipment will be there to enhance the service and security to the customers, not to impersonalize but to make it even more personal,” he said. “The human aspect of our bank will never be taken out.”
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