Academic journal article ABA Banking Journal

High-Tech Banking Centers Add Value to Branches

Academic journal article ABA Banking Journal

High-Tech Banking Centers Add Value to Branches

Article excerpt

The banking industry is split into two camps," says Robert E. Moll, a director with Arthur D. Little, Cambridge, Mass. "One camp is struggling with ways to keep customers out of the branches so they can lower their operating costs, and the other is figuring out how to leverage the branches and control costs by introducing self-service devices."

Both strategies require significant investments in technology. The first involves investing in home-banking systems, off-site automated teller machines, or similar out-of-branch ventures. Banks in the second camp are opening automated banking centers within existing branches in order to give customers the option of performing transactions and obtaining information from automated devices or working with a teller or platform officer in a more traditional branch setting.

Such centers typically include ATMs-- the latest models of which have such features as check cashing and imaging for verifying that a deposit was made--as well as self-service terminals and personal computers used for noncash transactions, account inquiries, and obtaining other information. Other centers, like the ones Hibernia National Bank, New Orleans, is rolling out, feature just a PC in a private booth the bank calls a Personal Banking Center. The PCs are loaded with special software for customers to use.

Low-coat entry. The need to deliver banking services more efficiently was the original motivation behind the $5 billion-asset bank's decision to open the centers. Using the PCs, customers can obtain information on retail checking accounts, certificates of deposit, and loans. Instructions on the screen are easy to follow, and a bank employee is stationed in the area to answer questions about using the PC.

The booths also have telephones, and telephone extensions for specific customer service personnel appear on the screen.

The bank's marketing staff developed the concept of the Personal Banking Center following implementation of other branch improvements, including automated sales presentations, faster loan processing, and improved teller-response times.

"We were looking for ways to continue to provide services but control overhead during a period when the bank was having some difficulties," says John Smith, executive vice-president and manager of consumer banking at Hibernia. The centers are an opportunity to add service by getting the customer in and out of the branch quickly without having to do major renovations in the branch, Smith added.

Three branch locations are piloting the Personal Banking Centers--mainly low-volume offices that will enable the bank to closely monitor use of the service. "The next step is to install them in much busier offices," says Smith. User-friendly. The PCs in Hibernia's Personal Banking Centers run a more user-friendly version of the bank's platform automation software, which was developed in-house. The system instructs the customer to respond to questions by hitting a green or red hutton, indicating yes or no. Other instructions require the customer to enter figures reflecting what the customer wants to pay each month on a loan or the amount he or she typically keeps in a savings account.

"The system mimics what goes on in a sales presentation," says Tom Jung, Hibernia's director of marketing, "and identifies the products we offer that match the customer's goals. It's a very low-pressure sales situation, because the customers use the system at their own pace."

The Personal Banking Centers eventually will include ATMs and self-service machines, adds Jung, because the bank's market research indicates a demand for such systems on the part of "consumers who are very self-reliant." PNC's branch plans. PNC Financial Corp., the Pittsburgh-based bank holding company with $45 billion in assets, recently introduced an automated banking facility. The lead bank, Pittsburgh National Bank, opened an Automated Banking Center at its headquarters banking office this summer. …

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