As self-service solutions gain popularity across industries, Interactive Teller Machines (ITMs) for banking are combining live service with digital technology for an enhanced client experience.
Today, increasing numbers of retail and commercial businesses are making digital self-service solutions part of their overall customer service strategies. From fast food and hospitality to healthcare and transportation, the market for these innovative technology products is growing at a CAGR of 13.6% … and things aren’t looking to slow down.
So how is retail banking handling this shift?
Pretty well, actually.
During the height of the pandemic, many brick-and-mortar financial institutions had to embrace self-service solutions in order to continue serving clients and maintain profitability. As a result, their adoption curve became much easier. Now in post-pandemic times, solutions like ATMs, ITMs, and interactive kiosks rank as the most critical technologies to retail branch strategy—and of them—ITMs are growing in demand.
With 25 years of expertise in banking equipment, service, and installation, we at DBSI help financial institutions achieve optimal ROI on their equipment and design-build investments, whether it’s building a new branch, upgrading machines, or maintaining existing infrastructure. And with efficiency and growth in mind, we’d like to share the top benefits of adding ITMs to your branch network operations. But first, we’re going to give you a few ITM basics.
The Interactive Teller Machine, Defined
Also known as a Virtual Teller Machine, Video Remote Teller, and “Branch in a Box,” an ITM combines touch screens and video technology to give clients a virtual version of an in-branch banking experience. Considered an upgrade from the well-known ATM machine, an Interactive Teller Machine allows clients to complete a wide variety of transactions independently or connect in real-time with a video teller and receive assistance.
Here are some things a client can do with an ITM’s video service options:
- Complete cash withdrawals
- Deposit cash and checks
- Make loan payments, including mortgage payments
- Cash checks
- Make credit card payments and advances
- Get loan advances
- Deposit funds to a new account
- Transfer funds between accounts
As far as physical placement, it's essential to be strategic in order to get maximum usage. An ITM can be set up as a standalone banking option or added to a drive-thru to replace or supplement traditional drive-thru service. The Interactive Teller Machine also makes a good addition to a micro branch due to its capabilities and its size. The key to getting the most utility out of your ITM is working with a provider like DBSI who will help you place your equipment strategically.
TOP REASONS ITMs ARE GAINING POPULARITY WITH FINANCIAL INSTITUTIONS
#1. Reduced Labor and Operational Costs
Adding ITMs to branch locations can bring significant cost reductions to a financial institution. Not only can they do the work of several employees, but they also present an opportunity to shrink the branch footprint since they reduce FTE requirements and require less space than traditional teller lines—opening up some options for managing square footage.
Looking more closely at numbers, the price of a standard transaction between a teller and a client is around $4.50 according to research by Cornerstone Advisors whereas a similar transaction between an ITM and client can run as little as $0.50-$0.70. That’s a savings of over 80% per transaction, which over time, will help offset the price of capital equipment and core integration.
#2. Expansion Into New Banking Markets
One of the biggest challenges for any branch network today is expanding physical operations into geographic areas with high commercial value or areas that are underserved or rural. Traditional branch construction alone can easily exceed a million dollars, so building may not be feasible if profits aren’t attainable within a reasonable time frame. The introduction of ITMs can change a scenario, however, and here are a few ideas to consider:
- Deploy an ITM in a modular booth format and place it in a high-traffic urban location such as a grocery store, corporate building, or mall. It can function as a standalone unit without an in-person staff member.
- In an underserved suburban area, build a micro-branch equipped with an ITM and add 1-2 staff members to support clients during regular business hours.
- Add a 24-7 ITM to the drive-thru or exterior lobby of a high-traffic branch location to provide extended service hours and divert clients from teller lines.
#3. Improved Branch Productivity
On average, ITMs can complete 80-90% of the transactions that a traditional teller does today. So besides reducing per-transaction costs, adding an ITM to a branch location will reduce the number of teller transactions that frontline staff need to process in a normal business day, subsequently giving them more time for other high-value tasks like cross-selling and advisory conversations.
Additionally, an ITM can extend banking hours beyond the usual business day, and video tellers can be made available to assist clients around the clock. This means more transactions processed per day and more opportunities to improve customer satisfaction.\
Interactive Teller Machines and Price Considerations
When making decisions about how Interactive Teller Machines will fit into your financial institution’s short- and long-term strategic plans, it’s important to first assess the state of your ATM or ITM fleet and the current level of your core integration. Why? Because replacing outdated machines will likely be more cost effective than updating them, and fully integrating machines with your network’s core will allow clients to use the machines with minimal to no live teller support if desired.
Considering the above points, take note that ITM prices can range from $55,000-$80,000 per machine. If your network also requires a core integration, there’s typically a one-time infrastructure charge of $250,000-$500,000 which is easily recoverable over time—especially when the cost is spread out among larger numbers of ITM.
HYOSUNG - NEW GEN RECYCLING ITM NCR - DRIVE-UP MULTI-FUNCTION ITM
Ready to Get Started with ITMs?
If this information helps create a use case for adding ITMs to your branch network, contact DBSI for a discovery call. We will help you assess infrastructure needs, determine the best strategic locations for your new ITMs, and come up with a feasible budget and timeline for your ITM purchases or upgrades. Our consultations are 100% free, and because we don’t contract with any one equipment provider, you’ll have the opportunity to choose ITM models and price points according to your needs and budget.