Subscribe to Your Fiscal Brand through email for FREE!Retail financial services companies continuously search for opportunities to lower costs. That’s been my whole over a 40-year profession through good times and bad. Those attempts increased sharply in the past ten years in response to the fantastic Recession and its lingering effects. The blend of narrowing margins along with the debut of lower-cost digital stations hastened this strategy.
By NPR at August 2013: “Some Bank of America branches together with drive-through tellers from Georgia to Texas have closed the lanes, according to spokeswoman Tara Burke. She wouldn’t disclose just how many are shutting. She did state the choice isn’t a cost-cutting move [Author’s note: Actually, it was — I was in charge, I should know.] however a reply to the way that people are banking. Approximately 13 million clients bank by cellular phone and 29 million engage in online services. One of them is 19-year-old Brittney Sprague that states, ‘Not too many folks will really miss the drive-through teller because everybody uses apps. It’s about the brand new technologies’.”
Closing drive-up lanes, or even more probable, turning them from individual tellers into ATMs, was a part of an extensive attempt to “migrate” trades from the division teller line to lower-cost channels (ATMs, on line and cellular ). Bank of America wasn’t alone in those efforts. As cell banking grew quickly with its capacity to facilitate distant check deposits, the requirement to go to branches for deposits .
From American Banker in September 2013: “Drive-through teller stations, once promoted as a convenience for the after-work crowd wanting to keep Bob Dylan songs playing while depositing their paychecks, are losing some of that traffic to mobile apps. As consumers increasingly use self-service channels from wherever they wish, financial institutions are reimagining their physical footprints, including drive-ups, to adjust. ‘It’s all part of a larger movement to what we call the self-service era,’ says Genie Driskill, Chief Operating Officer at Synergistics Research Corp. ‘Branches will have options for transactions inside or outside, but in a self-service mode, drive-ups are an extension of that’.”
Movement into “self-service era” has been the crucial phrase in that previous excerpt. The retail financial sector, such as many other businesses, are steadily shifting to self-service theories for ages.
Then came COVID-19.
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Conducting Banking in a Little More Than Arms’ Length
The pandemic hit on the business rapidly. It wasn’t that financial association executives were susceptible to getting the virus, it had been the magnificent shutdown of non-essential companies nationally. The business was categorized as necessary, meaning it might continue to serve their clients, but together with adherence to stringent restrictions in supplying those solutions. Those constraints comprised limited facial contact, masks and other personal protective gear mandates, and social distancing.
Everybody was fearful, including employees and clients. Delivering in-branch teller solutions became hugely difficult, and from the heads of lots of individuals too insecure no matter the PPE they wore.
However, the business and consumer and business clients had to discover methods to run their financial issues, and electronic stations, while useful, weren’t necessarily an alternative. If only people could run a teller trade remotely … nevertheless still through individual tellers. That’s where manned drive-up lanes arrived to the equation.
By Reuters news agency in March 2020: “Banks across the United States announced plans to close branches this week, switching many to drive-through and ATM operations only, as financial institutions work to keep going despite the coronavirus and widespread closures of schools and businesses.”
I’ve searched and found no good information source for the amount of manned drive-up lanes which exist, or even the proportion of branches which still possess them. However, from tens of thousands of branch visits within my livelihood, I will attest that many branches out dense urban regions have themwhether or not ATM-equipped.
Back in the day, when cost-cutting was the sole real concern, it was easy to create the situation for converting manned drive-up lanes into ATMsto shutting down several freestanding drive-ups. Close the manned lanes contributed to focusing staying, decreasing teller volumes within the branches in which single teller lines may be handled with reduced staffing. The expectation, and my expertise, was that many of the displaced from the shutdowns of all drive-ups will bite the bullet and then migrate into ATMs. The remainder would go inside or visit a nearby branch together with manned drive-ups.
1 important point we heard, however, was that shutting a drive-up lane contributed to greater customer complaints than simply closing a branch. Clients that utilized drive-up lanes used them for a particular reason we discovered: Not needing to escape their cars.
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COVID Changes Public Desire for Choice Channels
We are living in a world where running teller trades without face-to-face contact is favored over branch teller interactions. This may be the situation for a while.
If we yank those ATM-equipped drive-up lanes and then reopen them as manned teller lanes?
Probably not. Instead, I believe banks and credit unions ought to consider updating those drive-up ATMs into ITMs — interactive teller machines — with teller-access capacity.
In my experience of rolling out ITMs to countless places, I discovered the best use was at the drive-up lane. Clients loved them to get its long hours access to ATM-style service and live teller functionality. Bear in mind that the initial benefit to clients if drive-up lanes surfaced was only thatlong hours access to tellers.
Together with drive-up ITMs, teller quantity may nevertheless be managed for efficacy. The incremental cost of ITMs over deposit-taking ATMs is comparatively small, too. Every company must update its machinery at any time as each of hardware becomes obsolete or breaks .
So, rather than replacing or sterile ATMs, look at upgrading to have a better consumer experience.
Should you still run manned drive-up lanes now, you have more flexibility than many others in these tough times. If you shut down all of the manned lanes and replaced them with ATMs, you still have choices.
Jon Voorhees is President and founder of BankDistributionStrategies.Com at Bellingham, Washington, specializing in banking and credit union retail plan. Before beginning his company, he had been head of all Distribution Strategy and Execution for Bank of America. To associate with Jon, please contact him Jon.Voorhees@BankDistributionStrategies.Com