Regardless of asset size, technology is a critical part of any financial institution’s strategy. Choosing the right technology can have a deep impact on customer retention, employee productivity and overall profitability. Research from Celent predicts that technology spending by North American banks will grow to $56.9 billion in 2013, a 4% increase from 2012; although a modest increase, it’s imperative that financial institutions carefully evaluate where these funds will be allocated to ensure a maximum return on investment.
Alternative Electronic Deposit Options
Although Remote Deposit Capture (RDC) has existed for nearly eight years, many customers remain hesitant to convert; only 10-15 percent of business accounts have readily adopted RDC. This leaves financial institutions with untapped capacity and significant potential for growth. To maintain and grow a highly profitable base of commercial depositors, banks can offer an alternative to RDC that satisfies more of their customers’ needs and their organization’s goals.
Image Cash Letter (ICL) deposits offer a more streamlined process that does not sacrifice quality for speed. New hardware/software solutions can efficiently scan and image deposit items and create/send the ICL deposit to the financial institution. This makes the move to electronic deposit processing viable for even the most check-intensive businesses, while simplifying the effort for all parties. Banks benefit from accepting ICLs in two ways: (1) the financial institution is able to satisfy the customer need to process high volumes of checks, quickly and efficiently and (2) financial institutions can offer yet another treasury solution, providing a competitive advantage.
Create a Unique Customer Experience
Competition for customers continues to intensify, which is why financial institutions must embrace technology as a strategy that allows them to provide a unique customer experience. Offering a self-service coin counting option in the lobby means that customers no longer have to count and wrap their coins, can avoid teller lines while holding heavy coin containers, and have a faster, more meaningful exchange with the teller when they cash in their coin redemption receipt. Self-service coin machines are a service offering customers truly want. A recent study by BranMark Strategy Group revealed that 80 percent of those surveyed reported they would switch from a teller to a self-service coin machine and that they believe their satisfaction would measurably increase as a result, with many indicating they would use the machine “all the time”.
Ownership of a self-service coin machine is not only a point of differentiation for a financial institution; it can also drive traffic into the branch and result in new accounts. Self-service coin counting is also a value-added service to a bank’s commercial offering. The machines are an excellent way to more efficiently handle regular coin deposits, offering high-volume sorting in the lobby so that commercial depositors can enjoy the same high speed processing provided by vaults and armored carriers.
Reduce Labor and Processing Costs
Outdated currency scanning and counting technology can slow down simple tasks – and stymie productivity – in the highest volume areas and at the teller window. Labor and time savings can be achieved by investing in a single device that has multiple capabilities: processing currency and checks. While maximizing the device’s footprint, financial institutions can make more productive use of employees’ time – which can often lead to more high-value interactions with customers.
Coin counting machines that offer streamlined sorting, collection and storage can also lead to quantifiable time savings. Bin storage models eliminate the need for tellers to manage, move and store several bags of coin; they simply roll the bin into the vault and never touch the coin again. With this streamlined operation, tellers can focus on more high-quality tasks such as interacting with members and even cross-selling opportunities. In addition to time savings, costs associated with selling bags to the Federal Reserve are eliminated. Many financial institutions that have installed a self-service coin machine no longer need to sell coins back to the Federal Reserve; they simply use an armored carrier service that takes their coin bin – eliminating the need to prepare and ship multiple coin bags per week.
As banks begin to earmark more funds to technology spending, it’s imperative that they evaluate where these dollars will have the most impact. Technology solutions that improve internal operations, drive traffic, and improve the customer experience should be a high priority.
Bob Gibson is vice president of branch operations at Cummins Allison, which provides currency, check and coin handling solutions.