Benefits and Challenges of Self-Service Kiosks in Financial Institutions

Author: Source Technologies

Self-service kiosks

As you work to sustain your financial institution with today’s consumers, you should consider self-service kiosks.

There are two things that characterize today’s consumers: they are tech-savvy and they are in a hurry. To meet their needs, your financial institution should consider deploying self-service kiosks to provide them with the modern, customer-centric experience they expect. By broadening your technology suite, your institution can deliver an up-to-date, streamlined customer experience.

If you fail to deliver the speed and convenience that self-service kiosks offer, you will see your customers and members close their accounts and move to institutions that offer better customer service and a faster, more convenient user experience.

But before you start your search for a self-service kiosk vendor, you should consider the benefits and challenges of self-service kiosks for financial institutions.

Self-service Banking Kiosks Defined: What is a Self-Service Kiosk?

When we talk about self-service kiosks for financial institutions, we’re talking about the freestanding devices that let customers initiate and complete 90% of transactions that typically require the help of a teller.

These devices feature an interactive, touchscreen display, leading cash handling devices, and core integrations to conduct transactions or perform a task. Also known as Personal Teller Machines, self-service kiosks are the financial services equivalent of the kiosks at airports that let travelers check-in and print boarding passes, the kiosks at fast-food restaurants that let guests order their meals without speaking with anyone behind the counter, and the self-checkout stations at grocery stores.

Unlike traditional ATMs, self-service banking kiosks integrate directly with your institution’s core system. This independence from the ATM rails allows consumers to enjoy a richer, more value-added transaction set.

Self-service kiosks at banks and credit unions perform a number of functions that give consumers the modern retail experience they have come to expect from other retail institutions. 

What Should Today’s Kiosks Do?

  • Accept cash deposits
  • Dispense cash and coins
  • Accept checks
  • Print official checks
  • Print receipts
  • Transfer money
  • Print statements

Two Benefits of Self-Service Kiosks for Retail Customers

Self-service retail kiosks offer two significant improvements to physical branch locations. 

  1. Speed: Consider the common occurrence of a customer walking into a branch and requesting an official check from a teller. When branches provide self-service kiosks for their customers, this time drops from 9 minutes to 40 seconds. Customers get their checks 13.5 times faster with self-service kiosks.
  2. Convenience: According to Mercator Advisory Group’s Customer Insight Report, consumers who don’t like using mobile and online banking prefer to use self-service kiosks at physical branch locations rather than dealing with a teller. Millennials prefer to conduct routine financial transactions on their own and prefer using self-service kiosks whenever possible.

Nine Benefits of Self-Service Kiosks for Financial Institutions

The good news for financial institutions is that the benefits of self-service kiosks are not just being enjoyed by retail customers. Branches of all sizes are benefiting from giving their customers modern ways to transact their business.

  1. More Meaningful Face to Face Interactions: One benefit, of course, is that self-service kiosks offload the need for face-to-face contact with tellers for simple and minor transactions. This not only reduces wait times, it also gives customers control over their day-to-day transactions.
  2.  Increased Higher-Value Transactions: When the burden of mundane transactions is removed from your teller staff, they can focus on more complex transactions, such as mortgages, car loans, financial planning, and investments. A bank in Connecticut, for example, used self-service kiosks to handle 40% of their customer transactions. This gave employees more time to work on more valuable tasks.
  3. Transition to Universal Banker Model: Self-service kiosks allow financial institutions to transition from the teller model to the universal banker model. The universal banker model, of course, is one in which employees are trained to handle a wide range of tasks related to banking. Universal bankers are capable of being a teller one minute, a financial consultant the next, and a loan officer the next.
  4. Increased Sales: Kiosks transform your business to be customer-centric by meeting client needs and increasing quality face-to-face time for transactions that matter. When your tellers are freed up to deliver higher-value services, they increase sales. Thanks to self-service kiosks, tellers are free to cross-sell, up-sell, and promote other products and services.
  5.  Improved Internal Efficiencies: If you are like most financial institutions, you are continually faced with inefficiencies from an operational standpoint. Self-service kiosks at banks and credit unions streamline internal work processes and make branches more efficient. 
  6. Reduced Expenses: Installing a self-service kiosk at a branch reduces teller expenses. A credit union in North Carolina decreased bank teller costs by 40% when it began offering its customers self-service options with a kiosk.
  7. Increased Foot Traffic: Because consumers find it easier and faster to use a kiosk than to wait in line for a teller, they are more likely to visit a branch to conduct simple transactions. They are no longer deterred by long lines at the counter. 
  8. Improved Customer Satisfaction: Serving customers more quickly and offering them more convenient ways to make transactions will lead to happier customers. Personal teller machines empower staff to deliver high-touch, personal interactions.
  9.  Better-Informed Customers: Self-service kiosks let you keep your customers up to date on your latest products and services. They let your customers browse entire ranges of products and services at their convenience. 

Challenges of Self-Service Kiosks

Just because self-service kiosks offer multiple benefits to customers and institutions alike doesn’t mean their deployment is easy or simple. There are challenges to installing and operating kiosks at any financial institution. You may even be concerned about the impact kiosks will have on your current customers and members.

Challenge #1: A Dehumanized Experience

Ironically, one of the benefits of self-service kiosks is also one of their challenges. Yes, kiosks have the advantage of letting customers conduct their banking without talking with a human. Many customers prefer kiosks because the process is faster and more convenient. But plenty of retail banking customers prefer to do their banking at the counter. They prefer talking with a teller and transacting their business with a human being.

If you operate a branch in a busy, urban setting, this may not be a challenge for you. But if you are located in a rural area, and if your clientele consists largely of seniors or individuals who are less tech-savvy, you may experience plenty of pushback from your customers. The rule of thumb is pretty simple—if your tellers know your customers by name, and if your customers know your tellers by name, installing a self-service kiosk at your branch may be a challenge.

Challenge #2: High Upfront Cost

Installing a self-service kiosk that does the work of a teller isn’t like hiring and training a teller. It’s more complex, more technical—and more expensive.

Although there is a high upfront cost to purchasing self-service kiosks, your business will see a greater return in the long-run by implementing them into your everyday operations. The cost of hiring a teller long-term will cost more than purchasing kiosks to manage the regular, simple financial transactions.

All in all, the high upfront cost shouldn’t be a deterrent as long as you take two vital steps. First, calculate your total cost of ownership. Look beyond the initial, upfront numbers and calculate the cost of the entire system over time. Then, calculate the return on investment you anticipate generating with each kiosk you deploy. A high upfront cost doesn’t have to scare you if that investment stands to generate a satisfactory return.

Challenge #3: Technical malfunctions

Which is more frustrating? 

  1. Walking into a branch that has many teller stations behind the counter but only one teller on duty? 
  2. Walking into a branch to discover that the self-service kiosk is out of order?

For many of today’s consumers, the more frustrating scenario is number 2. Broken, vandalized, and out-of-service kiosks are a major inconvenience for retail bank customers. This means part of your due diligence in choosing a kiosk vendor is reviewing their record for preventive maintenance, their average service response times, and their reputation for offering hardware and software that has above-average scores for uptime and reliability

Should Your Financial Institution Switch to Kiosks?

Once you’ve studied the benefits and challenges of self-service kiosks for financial institutions, you have a decision to make. Should your financial institution switch to kiosks? To help you decide, here are four things you should consider:

  • Consider Your Institution’s Self-Services Vision and Goals

You are best positioned to switch to self-serve kiosks when you start your journey by describing your self-service vision and goals. Only when you have a clear vision and goals can you have success in selecting the right hardware and software to bring your vision to life. Nailing down your vision and goals helps you choose a vendor who will build the modern client experience that your customers demand—and that your business requires. 

  • Consider Your Hardware Configurations

You are highly unlikely to find a hardware vendor that delivers a kiosk that performs all the functions you need right out of the box. Installing a kiosk at your branch with no customization can lead to reduced functionality, poor client adoption, and failure to meet program expectations. 

To avoid these shortfalls, look for a hardware vendor that lets you create a custom kiosk configuration, one that facilitates your specific transaction set and use cases. As you evaluate your hardware options and draw up your shortlist of vendors, make sure your preferred provider can support custom configurations and integrate peripheral devices to drive a successful deployment.

  • Consider Your Sour Software Options 

In the self-service kiosk market, vendors typically bundle the hardware and software. If you buy the one, you must also buy the other. But a few hardware vendors are “software agnostic.” They give financial institutions the flexibility to select from one of many industry-leading software providers (or to develop their own client-facing experience). Hardware vendors who are software agnostic ensure that your self-service strategy accomplishes your goals, meets your customer and member expectations, and can adapt to today’s rapidly changing marketplace. 

  • Consider the benefits for your clients, your employees, and your institution

Finding, interviewing, screening, and choosing a kiosk vendor is a lot of work. But finding a vendor who delivers individually configured hardware and best-in-class software gives you the best chance of achieving your institution’s self-service banking vision. It should also lead to:

  • reduced operational costs
  • enhanced internal efficiencies
  • improved employee morale
  • higher client satisfaction

As you evaluate your in-branch kiosk needs, be certain the vendor you choose will help you define your overall vision and objectives, configure your hardware, and select software to exceed your program goals. A good kiosk vendor makes sure your self service strategy drives your larger institutional goals.

Is Self-Service Kiosks Right for Your Business?

The good news about deploying self-service kiosks at your financial institution is you’re your decision doesn’t have to be either/or. While your financial institution may not be ready to make the switch to a full universal banker model, you can instead adopt a hybrid approach that uses both kiosks and some teller employees. That’s a good starting point to begin your transition.

Get Started with Self-Service Kiosks

Are you ready to transform your business to be more efficient and customer-centric? Talk to one of our financial transaction specialists. Book your free consultation to find out more about our self-service kiosks.

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