A Branch Transformation Postcard from the Tropics

Recently, I’ve been working with a financial institution with branches in Guam and other Pacific islands, and my experiences there illuminated a critical factor for successfully migrating transactions to the self-service channel. Even in these island communities, the bank branches, their consumers and their needs are very different across their network — which means FIs should not be searching out a one-size-fits-all automation solution.

This is an extremely important point for retail bankers around the globe, and it’s an issue we see time and time again. FIs eager to show their technology chops discover a product (a new terminal, a piece of software or some kind of mobile technology), order one for every branch, then adopt an ‘if you build it, they will come’ approach to introducing the new tech.

This type of implementation skips the crucial (albeit less exciting) step of methodically working through strategic benefits, developing a strong tactical plan and calculating branch-by-branch ROI metrics to ensure success.

In Guam, like elsewhere, branch transformation is a hot topic. FIs are looking to update their branches and improve the consumer experience, so they’re taking a fresh look at their self-service capabilities and branch infrastructure.

Identify Unique Priorities within Your Network

But here’s the thing: retail bank branches across these islands have different priorities. Some branches may be dealing with a large amount of walk-ins who just want to pay a utility bill, and because of ATM software limitations, they’re not able to do it at a self-service terminal. Other locations may be conducting mostly withdrawals for consumers who come into the branch because they want denominations other than $20s. And other branches have a sizable number of merchants coming inside the branch with large cash deposits that are very time-consuming to process.

In these cases, simply deploying a solution will not get you the ROI you’re looking for. You’ve got to educate your employees and your consumers, and align your internal processes to enable and drive adoption — and even then, the solution will only work if it actually solves a problem for your consumers.

That’s why the first step we take is always to assess branches. During my trips to Guam and two other neighboring islands, we visited eight different branches to better understand the way consumers and staff were conducting transactions. The assessment process helps us build a roadmap that outlines the type of branch transformation solutions and functionality needed at each location.

For example, if we’re seeing that most of the traffic is consumers coming in with odd check amounts, who routinely bypass the ATM because they want a $20, a $5 and two $1s for their $27 check, then we may be able to reconfigure the current terminal to offer a larger selection of denominations.

Or, if it’s a branch serving a remote population who only comes in a couple times a month, maybe most of these consumers want to conduct a series of transactions with one checkdeposit – something they can’t do at the ATM. With the right terminal software, we can enable split deposits, bill pay, deposits with some cash back, transactions that include loan payments, etc. This functionality would enable a consumer to do their transaction on a self-service device when it’s most convenient for them.

Prioritize Consumer Needs

The culture in the islands is cash-centric, with high levels of branch usage. Some retail banks, like in many parts of mainland USA, have reacted by upgrading their terminals to enable more advanced transactions at the ATM, rather than at a teller window. But what we’ve found is that even though many ATMs offer deposit automation, most people hardly ever use that functionality.


Many consumers place a high value on funds availability — and they can get faster access to their cash if they go inside the branch to cash a check. They may be coming to cash a $500 paycheck, and they need that money immediately to pay bills, which they can get from the teller who they know personally.

So although the bank has upgraded its terminals, the upgrade isn’t addressing the consumer’s need, which is prohibiting consumers from adopting the self-service option. In this situation, the bank could implement ATM software that would enable them to get a more comprehensive view of each consumer, and build rules and parameters to make larger sums of money available, faster, for certain consumers — those who have been customers of the bank for a certain period of time, for example, or who have a certain amount of money in their accounts.

Build Relationships with Your Consumers

Once consumers begin to see the benefits available to them at the terminal, we start to see a much more successful migration to self-service. Which is great for the bank, whether you’re in Guam or Green Bay. Transactions are a fraction of the cost when they’re done at an ATM rather than with a teller (it costs, on average, $4 per teller transaction, just $0.61 per ATM transaction), and the bank staff is free to conduct more value-added relationship banking with consumers.

Source: Chris Gill, Diebold