6 minutes
What is the future of tablets and video tellers in CU locations?
When new technologies make bold promises, how do you discern the hype from what’s commercially viable? And when will such claims pay off, if at all? Gartner Group has developed its “Hype Cycles” to provide a graphic representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.
The chart illustrating this article shows the typical hype cycle with a red line. In contrast, the green dashed line suggests more realistic technology application.
Last year our firm was hired by one of the largest banks in the country. It was experiencing “hype cycle stress” and wanted us to help its leaders understand the future of technology as it connects with the customer and staff experience in their branches. Our goal was to help flatten “peaks of inflated expectations” and completely jump technologies when an application had no realistic near-term viability. The banks’ leaders had good reason to invest in avoiding mistakes in this arena. Multiplied across thousands of branches, potential loss from making a mistake could cost $50 to $100 million plus.
Right now credit unions are considering the hype cycle (although they might not call it exactly that) as they look at both in-branch tablet use and the installation of personal teller machines (video tellers).
Are Tablets Taking Hold?
People are starting to care about the “feelings” of their devices. (For more, read The Man Who Lied to His Computer by the late Clifford Nass, Ph.D.). In addition, observation suggests that a familiar personal device makes technology-to-person communications more engaging and trusted.
It’s not surprising then that tablet use will soon outpace laptops. Because tablets are getting smaller, more flexible (more laptop-like) and more convenient, they are more frequently being integrated into service delivery designs both in branches and remotely.
Tablets also have their place in making life better for credit union employees. For example Steelcase offers a tablet formatted for scheduling that links to a credit union’s network so conference rooms can be reserved from anywhere.
But some early tablet applications have been less successful.
Barclays Bank was the first in Europe to feature Microsoft Surface. The bank implemented the devices as large format, interactive screens built into a table surface and gained a great deal of notoriety around the world by doing so. According to this blog post, this arrangement allowed users to “grab” digital content with their hands and navigate information about Barclays’ Premier banking offering with simple gestures and touches.
After that, many institutions included similar setups in the list of desired new technologies in the branch. The thought was it could be used by credit union staff members for private discussions in an office or conference room, at the teller area for transactions with members, at stand-up stations to introduce new products and services—or by members looking up credit union offerings or just wanting to be entertained.
The reality is that using Microsoft Surface in this way is expensive in terms of driving content, and light reflection on the horizontal screen makes it difficult to see the content from certain view points. After installation and testing, most of these screens have been removed unless installed for entertainment purposes in the lobby.
Microsoft Kinects was another technology that seemed to have some entertainment value, if not business promise. But FIs were quick to observe that not many business people want to wave their arms in public to learn about how to set up a business account or get a loan. The same was true for consumers, unless applied to a campus site or used as a unique entertainment feature. The cost of content development is high, with little return in new business or enhanced relationships.
Notably, personal tablets will continue to develop as an important format for the future of branch engagement. More on this in a future column!
Personal Teller Machines
Today the big techno-elephant in the room is cash handling in its many forms: cash dispensers and recyclers, smart ATMs and personal teller machines. Cash handling solutions impact staffing models, development and sales processes, branch size and, most importantly, the member and staff experience. The impact can be substantial and mistakes can be very costly.
So credit unions must be very careful about the rationale they use for cash management decisions. Ask yourself: Is the study you’re reading real or part of the hype cycle? For example you can save 20 percent to 30 percent in operating costs by employing PTMs. But studies indicate that while you can become more efficient, there will be no increase in productivity. So if you are going to use PTMs to reduce cost, how do you also increase member growth, share of wallet, productivity and member and staff satisfaction? It can be done, but this key ingredient is often left out of the design equation.
Some banks and credit unions are actually jumping technology hype cycles in favor of long-term delivery, operational and branding strategies. At a recent conference in Orlando, I learned of a few large, multi-state community banks that have no plans to add PTMs. Trends show that transactions are declining in their branches at an increasing rate. An exceptional example is at one of our client’s branches in San Francisco, where transactions have been dropping 20 percent a year. If the trend stays true to the projected and observed course, in five to seven years, that client will see very few in-branch transactions and be focused only on member development and growth. If the institution were to invest $60,000 to $100,000 each in several PTMs and then need to reconfigure in five years, what would be the cost to its brand and member/staff experience?
I am not against PTMs. In fact, we are working with a number of institutions to determine how and when to use them and how to introduce them in existing branches and new locations. They can be the right solution for a number of credit unions if designed properly.
Every branch design can be the right delivery solution for each credit union no matter what technologies are used. But, we must integrate ways to flatten the hype cycle so we do not lose millions in remodeling costs, productivity and member and staff satisfaction.
The key words in branch design in the current environment are rational assessment, long-term perspective and flexibility. Keep these ideas in mind, and you can create a highly efficient and productive branch business model and design that delivers a powerful brand experience for members and staff well into the future.
Paul Seibert, CMC, is VP/financial design at CUES Supplier member EHS Design, Seattle.