Can Kiosks Save Banks?

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Report finds automation and process initiatives can save banks $60M to $80M.
 
Top quartile banks perform basic transactions 42 seconds faster than the average, mainly due to investment in technologies to assist counter operations. Self-service transactions account for 70% to 80% of all branch business in the top-performing banks.
 
New analysis from Compass Management Consulting argues that the most efficient bank networks require 30% fewer staff than the average, which would equate to an annual saving per bank of around $60 to $80 million, depending on the size of the branch network.
 
The main drivers of higher cost in under-performing banks include:

• Higher task times for processing counter transactions
• Lower levels of staff utilization
• Lower levels of branch self-service for basic transactions such as cash/ cheque deposits

Cash management and recycling using Teller Assist Units can reduce branch cash management costs by 10% or more, but are only used in around 20% of branches.
 
"The appetite for self-service and automation technologies in the branch varies by regions and between banks in a region. Asia, for example, has seen widespread and successful introduction of teller and self-service automation," comments Arabella Volkers of Compass Management Consulting. "Significant opportunities exist in Europe and North America to use technology to reduce the costs of transaction processing. Typical European banks, for example, are leaving potential savings of 30% on the table."
 
"The cost of involving staff in the processing of a counter transaction is five times the equivalent of the self-service process," says Volkers. "This cost differential makes a compelling case for migration to self service for the majority of banks."
 
The Branch Productivity - Decision Time report highlights the gap in bank productivity (as measured by staff utilisation levels) as between 45% for the poor performers and 83% for the best banks. Top-performing banks should aim to achieve 65% to 75% staff utilisation, according to the authors of the report.
 
"To improve profitability, the branch networks of retail banks need to generate higher product sales, as well as reduce the costs of routine transactions," says Volkers. "Automation is a major driver of performance improvement in branches.”
 
According to the report, customer satisfaction levels increase as a direct result of initiatives like introducing self-service and automation in cheque processing.