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Impact of Current Trends on Volume

By Kim Edwards, Senior Vice President of Client Services at FMSI

What is impacting transaction volumes and teller efficiencies and driving an even greater need for business intelligence around staffing in financial institutions today?

For the past 24 years, FMSI has conducted a detailed annual study of teller activity volumes for the month of March as a benchmark.  Per the study, branch transaction volumes have declined more than 45% since 1992.  Various factors contribute to the decline in transaction volumes.  Monthly volume continues to trend downward as transactional activity migrates to various E-Delivery channels throughout financial institutions (FI).
For those in-branch transactions being conducted, current industry technology offers solutions in automating teller processes and continued branch transformation, which allows tellers to be more efficient and productive in processing those account holder facing interactions. With transaction volume dropping and staffing levels remaining the same, the inevitable outcome is costly overstaffing in the branch environment.
All of this contributes to the overall desire for FIs to cut costs and decrease overall expenses by reducing staffing levels on the teller line, and also utilizing the tellers they do have in the most efficient manner. It remains more important than ever for bank and credit union management to pay close attention to staffing levels and use a dedicated workforce optimization tool, such as FMSI, to reduce their biggest expense, labor costs.

Impact of Other Channels

The proliferation of electronic ­delivery channels and services has reduced FIs’ dependence on the traditional brick-and-mortar branches. Today’s account holders do not have to enter a physical branch to conduct simple banking transactions because, in many instances, they have access to a plethora of physical, online, and mobile delivery channels. 

As brought out in the FMSI Teller Line Study, an often overlooked area to decrease overall expenses is the reduction of processing levels on the teller line.  As the data in the FMSI study reveals, this cost continues to grow each year.  Paying close attention to teller line workforce optimization and optimizing the staffing mix is one way to realize a decrease in overall expenses. 

Universal Associates

When account holders do choose to visit a physical branch location, the service delivery may look different.  Many FIs are utilizing a universal teller model, which enables a more efficient operation for low volume branches, or just branch performance in general.  Universal tellers are cross trained in multiple products and services delivery providing one-stop-shopping vs. account holders having to move from teller line to platform to complete their requested interaction. These universally trained employees would contribute to a reduction in the staffing need across the branch.

Utilizing Branch Technologies 

More and more FIs are adopting technology solutions that drive the efficiency of doing more with less, including:

  • Teller Cash Recyclers (TCR): promotes efficiency through the delivery and acceptance of cash through a machine and eliminates the need (in many cases) for a teller cash drawer. 
  • Video Teller Machines (VTM) or In Lobby Teller Machines (ITL): allows account holders to perform transactions in an assisted or self-service environment.

Maximizing the staffing investment through a more sophisticated scheduling approach also leads to improving sales and service levels.  Utilizing a retail branch model solution, which forecasts future months traffic patterns accordingly, will provide important information regarding idle time or “excess waiting for work” time when the teller is not needed to process teller transaction volume.

Idle Time in the Branch

FIs experience idle time at some point during the day and often consistently on slower low volume days.  Paying closer attention to idle time allows FIs to focus on sales driven activities during these idle segments. How this idle time is spent can also prove to be a best use of that labor expense (or staff member).

Idle time is not the enemy, but rather an opportunity to assign meaningful and productive tasks for staff to assume when they are not needed to process account holder facing transactions.  What tasks could provide a revenue stream in the branches: 

  • Outbound calling
  • Participate in learning sessions in product proficiency
  • Training in identifying cross sell opportunities

Recognize these trends are not going away. Volume will continue to decrease in branches and technology solutions will continue to grow and evolve across all channels.  In fact, account holders will continue to demand responsiveness, and with these demands comes automation and change!  This will provide opportunities for more efficient use of resources through employee attrition, as well as innovative and productive use of teller idle time.  FIs that better focus business efforts on optimizing staffing to maximize productivity and staff output will be able to take advantage of significant cost savings opportunities.