What is an Interactive Teller Machine?

The pandemic is changing many things: the way people shop, the way they work, the nature of social interaction. It’s also having a profound effect on businesses, who are having to configure their workforces and operations very differently to cope with the ebb and flow of lockdowns and interruptions.

In addition to accelerating banks’ digital strategies and forcing the increased usage of online and mobile banking, social distancing measures are also causing some banks to re-evaluate their branch footprints. Financial institutions know their branches offer value and that it’s important to have a physical presence, but they're also expensive to open, staff and maintain. In short, the pandemic could prove to be a significant catalyst for the acceleration of the trends we’ve already been seeing towards the digitization of money, money management and more technology-based solutions.

Today’s consumer is looking for more convenient and efficient ways to get their banking done. And financial institutions are challenged with trying to meet those customers where they are while seeking ways to reduce operating costs. As branch activities continue to decline, banks are looking for new ways to serve their customers.

More and more, modern financial institutions are adopting the use of interactive teller machines (ITMs), also known as video remote tellers. These offer an ATM-like interface—but with the enhancement of a video screen that allows customers to speak directly to a service representative in a call center in real time. To facilitate this, an ITM includes a touch screen, buttons and a handheld phone providing direct access to the teller, unlike the ATM where the interaction is to digital transactions through limited button response. 

An ITM is the next stage in technology for financial institutions; the technology is poised to become the heart of the branch automation process. It will open distribution channels and provide a “branch in a box” experience to customers. Advanced terminals are literally branches in and of themselves, but can operate from a variety of ultra-convenient locations, including hotel lobbies, department stores and standalone islands of their own.

Three-quarters of financial institutions that already offer video banking report better outcomes with 97 percent saying that NPS scores for video banking are a least as good, if not better, than other channels. And 77 percent say sale close rates are better or at least equal to other channels. Ninety percent of banking users who have used in-branch video banking say they would be willing to use it again.

The popularity is because Interactive Teller Machines enable consumers to perform simple cash transactions or engage in deeper, more personalized banking activities with remote tellers: it gives people choice, access and convenience.

In fact, with ITMs, customers can perform an almost astonishing number of different transaction types, including (but not limited to):

• Get cash
• Deposit checks
• Cash checks to the penny
• Cardless transactions
• Bill and loan payments
• New account opening and funding
• Transfer funds to any account
• Order replacement cards
• Process savings bonds and redemptions
• Process customer CD renewals and inquiries
• Issue bank checks or money orders
• Investment account transactions
• Access to all accounts (Consumer and Business)
• Credit card payments

Plus, the consumer and teller can communicate in real time, with the teller guiding the consumer through the transaction. It’s a convenient way to interact with customers virtually at any level. They can connect with remote tellers up to 24 hours a day, seven days a week from any ITM location (if the call center is staffed 24/7).

An automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Anyone with a credit card or debit card can access cash at most ATMs.

ATMs provide both basic cash-dispensing services as well as advanced functions, including:

• Check depositing
• Account information access
• Fund transfers
• Marketing of relevant products

ATMs also feature stiff competition from online banking, mobile banking and the push for cashless payments. They're a proven, dependable and cost-effective option for expanding service channels outside of the branch—and inside, too, as next-generation ATM software transforms the ATM into a key asset for branch transformation, enabling banks to migrate more and richer transaction possibilities to the ATM.

These are valuable services—especially as financial institutions move to branchless banking. But ATMs don’t offer the same level of service that in-branch teller and banker interactions have. Tellers and bankers often guide customers through more complex transactions, such as loan applications and payments, opening accounts or canceling payments or services. That means that one key differentiator for ATMs is that they deal with cash. Location-wise, they can’t beat a computer or smartphone. But if you need cash, then no online or mobile banking app can help.

ITMs offer the basic components of an ATM, such as the receipt printer and card reader; however, ITMs usually include additional features such as:

• A video camera and telephone for conducting conversations with a teller
• A coin dispenser for distributing different denominations of coins
• An ID scanner for verifying the customer’s identity
• A signature pad 

ITMs also add a video terminal to the usual ATM architecture. That may not seem like much, but it does enable a few benefits that ATMs and smartphones can’t offer.

1.  ID verification is a little easier through an ITM. If your credit card gets lost or stolen, the teller can verify your identity with a driver’s license or other form of ID.

2.  ITMs can dispense different amounts of cash. Whereas ATMs tend to deal only in large bills, ITMs can offer bills of any denomination and they can also dispense change.

3.  Most important, though: ITMs provide the conveniences and human touch of an actual teller. That opens up a lot of potential banking services that you couldn’t otherwise get from an ATM. And, although you might be able to get those same services online or through a mobile app, having a teller there as a guide can be very helpful. See how Capital City Bank continued to deliver consistent and personalized service to their customers amidst the pandemic by implementing the ITM.

• Savings per transaction. ITMs and ATMs drastically reduce your per-transaction expenses—from $4 with an in-person teller to below $1 for a self-service device.
• Operational efficiency. The vast majority of transactions performed by a teller can also be handled by an ITM; these include cash withdrawals, check cashing, cash and check deposits and loan payments. Using ITMs, some financial institutions reduced drive-through transaction times by 65% while increasing customer satisfaction by more than 90%.
• Revenue growth. ITMs free up your branch employees to build deeper relationships with customers who require human interaction. In addition, ITMs represent the opportunity for cross-selling when tellers are chatting with customers, informing them about new services and opportunities.
  
• Branch labor optimization. Branch staff is an expensive asset and, if financial institutions want to fully capitalize on their branch network, they must optimize the way branch staff are employed. This means branch staff need to spend the maximum amount of time focused on the critical interactions that provide customer value while streamlining and automating the rest. With an ITM in place, branch staff can focus more complex customer transactions, leaving the ITM to manage the day-to-day transactions which impacts the bottom line.
  
• Increased convenience. While employees aren’t available 24/7, ITMs usually provide live video beyond a branch’s standard operating hours. In fact, some financial institutions have seen an 88% increase in “branch” opening hours with some FIs seeing 30% of deposits being made outside of regular operating hours. In addition, tellers can provide assistance to customers who have lost or forgotten their ATM cards. By showing the teller a valid ID, customers can still verify their identity and complete a transaction.
  
• Competitive advantage. ITMs are a relatively new innovation, which makes them interesting and memorable for your customers. Deploying ITMs can be the key differentiator between your financial institution and your competitors, especially for market segments such as millennials and Gen Z, who are attracted to innovation.
  
• Greater market presence. Because ITMs can perform nearly all of the tasks done by a live teller, they can extend your reach at a fraction of the cost of opening another branch. You can strategically install ITMs in high-traffic areas such as college campuses, retail parking lots, manufacturing plants, malls and other locations, increasing your brand recognition and market footprint.
  
• Expanding specialty services. The ITM reduces staffing needs while providing the ability to offer more product and service specialties to your customers. Some of those specialties include mortgages, wealth management, fraud protection, multi-lingual speakers and other specialties that can be centralized and offered over a wider geographical area. 
  
• Enabling tellers to work from home when branches need to close, such as during surges of COVID-19. The ITMs provide a flexible operational model since tellers don’t have to be onsite or in a centralized call center to provide service. See how BankPlus ITMs enabled its tellers to work from home.

In the United States, Associated Credit Union SVP of Member Relations, Heiwote Tadesse, agreed that the ITM has had a positive impact on their customer experience.  “We’re always looking for new ways to invest in member experience, which is how we began using ITM machines,” she said. “At first, we were concerned that using ITMs would lead to a less personal connection with our members, but we’re seeing now that members are showing increased satisfaction with this as well. They appreciate being able to conduct transactions without needing a face to face conversation.”

ITMs are a major step in banking technology and need to be carefully introduced to your market. The rule of thumb with ITMs is to have two bankers for every 10 locations.

But to get the most from this new technology and make sure your rollout process is smooth for employees and customers, pay careful consideration to how you’ll market ITMs and educate your employees and customers.

Financial institutions that are successfully rolling out ITMs do the following:

• Make customers aware of and comfortable using the new technology. It might seem like a challenge, but many financial institutions are seeing very positive results from their customers, who take to them easily. Also, make sure that you extend your branding to your ITMs so that customers know who they are working with, especially if your ITM is at location outside of your branch.
• Provide helpful content to educate everyone about the benefits and use of ITMs. Try adding helpful information via statement inserts, branch posters and even short demo videos. The content should provide answers to the following questions. Why is it here? What’s in it for me (customer)? How does it work? Where and when can I use it? What transactions can I handle with ITMs?
  

The way customers interact with your branch is continuing to evolve and becoming a place where you offer more advisory services opposed to a place that consumers only visit for simple transactions. As today’s branches enter the next phase of banking transformation, ITMs are a good way to offer innovative and convenient technology to your customers where and when they need it. By implementing ITMs, your financial institution will be able to offer more personalized services to customers and control operational expenses. This will set you up for the future of banking while continuing to serve as a trusted hub of financial advice for your customers.