During the height of the coronavirus pandemic in the U.S., when branches were either closed outright or offered reduced service, transactions moved further away from cash to debit or credit, as people feared handling dirty dollar bills. Even as banks and credit unions have gradually been easing branch restrictions as part of the country’s reopening, the concern over use of cash has remained. Yet, cash is still the number one payment method for smaller amounts and many consumers don’t have access to debit or credit cards.
It’s not just a customer concern. Bank employees are pushing for more protections in their interactions with returning customers. You have all seen the glass or plastic “sneeze guards” now being deployed, and tellers wearing masks. Tape lines mark the floor to indicate the six-foot rules at the teller lines where branch lobbies are open again. At some point soon (I hope), normal traffic will return to the teller line, whatever “normal” turns out to be.
When society does ultimately fully reopen, branch staffs need all the protections banks and credit unions can provide. As many have noted, including myself, the pandemic and associated lockdown have been a catalyst to force technology laggards to adopt online and mobile banking for routine transactions. In a previous article, I have discussed several technologies deployed in branch settings to various degrees of success. The one thing I have been confused by is why more financial institutions haven’t fully deployed teller cash recyclers to all their branches.
Increased Engagement and Other Benefits
TCRs have been around for some time and are a proven technology. The benefits are generally well known. Industry research shows that they not only improve teller productivity, but also allow the teller to better engage the customer. And of course they reduce cash handling.
The productivity improvement comes in several ways. First, TCRs eliminate the need to set up a cash drawer at the beginning of a shift as the machine is ready to use. They also reduce the need for tellers to leave the line to restock the cash drawer from the branch vault during their shift. At the end of a shift there is no need to count out or settle the teller drawer either. Basically, the teller works the teller line their entire shift.
Industry reports indicate tellers with TCR access spend 60-90 minutes more on the teller line daily. That’s a 12-18% increase in teller availability for customer transactions.
TCRs can also improve teller-customer engagement. While the machine is processing the transaction, the teller can engage the customer in a short conversation that may lead to identifying more cross-sell opportunities. Tellers are the frontline in engaging customers. At Bank of America, where I led distribution strategy and execution until 2015, after years of transaction migration efforts we still processed over 500 million teller transactions annually (down from 1.1 billion about ten years ago). That’s 500 million opportunities to engage the customer, even if only briefly.
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- Banks Face Big Risks Shrinking Branch Networks as Pandemic Recedes
One Answer to ‘Dirty Money’ Worries
A third benefit of using cash recyclers in branches is that they reduce cash handling, whether at the teller line or at the drive-through window. This may be the most important benefit in today’s environment. Industry studies indicate that cash recycler deployments reduce teller cash handling by 90% or more.
“Coming out of this pandemic, branch staffs will want better health protections, especially relating to handling cash.”
— Jon Voorhees, Peak Performance Consulting Group
A few years ago, Scientific American published a story about the health risks of U.S currency. The author shared that U.S. Air Force researchers published findings in 2002 that concluded more than nine out of ten $1 bills (94%) were harboring bacteria, including some which could cause pneumonia or other serious infections. Other more recent studies continue to find similar results. In fact, TCRs can be employed as customer facing options to reduce teller cash handling even further. (If you want to stress out, Google “How dirty is U.S. currency?”)
Reduction in cash handling has important benefits. For example, no more visits to the vault throughout the day, no more counting your drawer at the beginning of shift or at the end of shifts. Coming out of this pandemic, I can only imagine that our branch staffs will want better health protections, especially relating to handling cash.
U.S. Lags in TCR Installations
Despite all these benefits, research shows only 30% of U.S. branches have deployed TCRs. Many firms have installed them only in new branches but have not retrofitted their existing branches. Europe is far ahead in terms of TCR installation.
It’s true that branch networks will shrink as marginally performing branches close as customer traffic declines further. And branch staffs, which have been reduced for years, will likely be reduced further post-pandemic. But there will still be some teller traffic in the future.
The cost of implementing TCRs is relatively modest, in that just like ATMs they can be depreciated over multiple years. Depreciation reduces the annual cost per machine to a few thousand dollars. Yet, 70% of U.S. branches don’t have TCRs. Two machines can support a staff of four tellers (depending upon your branch configuration). Using a figure of 12%-18% time savings per teller, for a four-teller branch that’s the equivalent of another half-time teller.
Branch banking changed during the pandemic lockdown, and it will continue to be very different in the post-pandemic world. This crisis has been a sharp catalyst for changing the retail banking experience, and some of the changes have been for the good. Cash recyclers could be in that category if they become more widely used.