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What is an Interactive Teller Machine: Overview of ITMs

What is an Interactive Teller Machine: Overview of ITMs

In this article, we’ll discuss the interactive teller machine (ITM) and its role in the financial world.

Today, many people rely on mobile apps and their financial instruction’s website to conduct their banking functions. While people still rely on ATMs to withdraw money or deposit checks, many intuitions like credit unions now offer video tellers.

An automated teller is especially helpful for credit unions and online banks because these institutions either serve local communities or have fewer operating costs. Credit unions do not have outside stakeholders like regular banks.

Instead, their members own them. Therefore, credit unions typically offer higher interest rates on checking and savings accounts, along with lower loan rates.

Online banks also offer similar rates because they have no physical location. Now, these intuitions may pass on additional savings with the technology that provides face-to-face communication but with a twist.

Automated Teller Machines Gave Rise to Interactive Teller Machines

The first ATM came into the banking world on June 27, 1967, in North London. In 1969, a US-based bank installed one at a branch in Rockville Centre, N.Y.

Without that invention, we would not have assisted video tellers, which came to prominence in 2013. As ATMs continued to expand their capabilities, the idea formed that a machine could feature the efficiency and flexibility of an ATM, but with the function of a teller.

In that sense, video tellers have become the next iteration of the teller line and the ATM.

Ability to Serve Less Populated Areas

Rural areas were the first to adopt interactive teller machines. These areas continue to use them because they provide a cheaper option when compared to a human teller working from a branch location.

Currently, interactive automated tellers serve smaller towns with fewer people and intuitions that lack the ability to maintain numerous branch locations. Lower-populated areas have less foot traffic, so keeping a branch open does not remain a cost-effective option.

ITMs and ATMs: What’s the Difference?

We would not have the interactive teller machine without the ATM. However, customers should know that an interactive video teller does not solely function as a cash machine, though some features overlap.

Automated bank tellers first dispensed cash. Now, they serve a wider range of banking needs. They provide account balances, allow people to deposit checks into checking or savings accounts, and automated tellers make it possible for people to transfer money between accounts.

Now, some ATMs have more technological advances like touch controls and sound to help the hearing impaired. When an automated teller uses video as a way to connect customers with bank staff, the machine transforms into a personal assistant teller, making the machine a subset of the automatic teller.

Both types of machines let you withdraw cash or deposit money. However, an assisted teller machine connections you with bank staff when needed.

Furthermore, an interactive video teller helps with:

  • If you lost a credit or debit card you get money or perform other banking functions at an ATM. In contrast, a video teller lets you prove your identity by showing some form of identification like a driver’s license or state ID. This allows you to get cash while waiting for your replacement card.
  • ATMs do not always give you bills in the increments you want. That is not a problem for remote teller machines. You may request and receive bills in any increments – just as you would when interacting with a regular teller inside the credit union.
  • Most video tellers have the ability to dispense coins, usually up to $.99.

Benefits and Advantages of the Interactive Teller Machine

Interactive tellers help credit unions and their customers in the following ways:

  • They reduce the need for unnecessary staff, which cuts down on overall operating costs.
  • They provide flexibility because credit unions have the option to staff them from anywhere, even outside of normal banking hours. Financial intuitions no longer have to keep certain branches fully staffed or open.
  • Assisted teller machines streamline staffing. This allows customers to conduct necessary services inside the branch because certain transactions must take place there.
  • In the long run, an intuition may reduce its facility size. This may help banks and credit unions achieve higher profit margins while providing more efficient ways for their customers to bank.
  • Assisted interactive tellers provide customers with more choices – customers decide if they want to use that technology to bank or have a more traditional interaction.
  • The interactive teller machine helps customers that work third shift or nontraditional schedules. They bring banking features to them in a personalized way that better fits their schedules.
  • Remote tellers offer increased security options; they may help reduce the risk of robbery or fraud, especially when placed in the lobby, in central areas or in drive-through locations.
  • They allow for person-to-person transactions as you see an employee’s face on the screen.
  • If you are pressed for time and see long teller lines, an interactive video teller provides faster service.
  • They serve smaller communities that have fewer banking options.
  • Video tellers have the ability to handle up to 80% of bank transactions.
  • They help with brand awareness at a lower price point than a human teller.

How to Use a Video Teller: The Quick Guide

Below you will find a quick, step-by-guide to using an automated teller machine. In this example, we will focus on a withdrawal. Because you do not have your debit card, you cannot use an ATM.

Follow the below steps:

  1. Pull up to the screen and touch the screen to connect with a live teller.
  2. When the teller appears on the screen, announce the purpose of your visit. In this example, you want to withdraw $100.
  3. Enter your account number on the screen or touchpad.
  4. After you finished entering the number, press enter.
  5. The teller will likely verify the banking function for accuracy.
  6. After confirming the function, put a form of ID into the scanner.
  7. The image of your ID will pop up on the screen for verification purposes.
  8. At this point, you may need to reiterate the purpose for this visit – in this example; you want to withdraw $100.
  9. The teller will then verify the account (if you have more than one) you want to withdraw the money from. You will have the option to watch the screen to follow the actions of the teller.
  10. An acknowledgment will pop up on the screen – in this example, a withdrawal one.
  11. Press the acknowledgment button.
  12. Click the submit button – this takes the place of a signature.
  13. The money will then dispense (similar to using an ATM).
  14. Take the money out of the dispenser.
  15. Take your receipt and close out the interaction.

Please note: To make the transaction private, use the chat or phone handset. No one but the teller has the ability to hear you. In this case, your transaction becomes more private than banking through the traditional teller line.

Furthermore, this type of automation means the teller focuses only on you because the teller may only interact with one customer at a time via the two-way screen. This provides further personalization that credit unions have become known for.

Spatial Considerations and Costs of ITMs

Credit unions and banks report that traditional teller transactions continue to decline. At the same time, these intuitions need to grow and evolve to stay in business.

Because interactive tellers offer so many functions, you actually get a machine that has the ability to handle the tasks of two kinds of staff members – tellers and bankers.

Additionally, a video teller takes up less space than a teller line. Most average between 800 square feet to 2,500 square feet. Some studies suggest that using interactive tellers may reduce the size of branch staff in half.

Typically, a branch manager may staff a location with three or four staff members. The basic guidelines to follow when using an interactive teller comes out to two bankers for every ten locations.

You can see that drastically cuts down on staff; however, it frees up time for bankers to focus on the tasks that can only take place inside the institution. This also gives them time to cross-sell products and upsell current ones.

While remote video tellers require some upfront costs, intuitions should have the ability to break even as long as they correctly train staff and customers. A basic ATM costs around $35,000 to $65,000.

In contrast, the median price for a video teller comes out to $85,000. It also takes around $200,000 to run the software for the personal teller machine.

Decision-makers may initially view the costs as too high. However, all financial intuitions must remember that they need to adopt new and innovative solutions that reach more people.

Taking no action may put a branch out of commission while leaving people in low-traffic areas with virtually no way to bank.

The Need for Training in ITMs

Training holds one of the keys to the success of video tellers and the intuitions that install them. Managers will need to train staff and ensure they remain well versed on the ever-changing needs of mobile banking.

Video tellers will need to know how to efficiently process transactions in a more expedient manner versus in-person ones.

Additionally, these machines provide an ideal way to replace the pneumatic tube system. However, people typically use the option they feel the most comfortable with. Therefore, the location of these machines matter.

Putting one of them next to a pneumatic tube lane provides a way to test how the machine will perform.

The Need for Advertising ITMs

While remote teller machines will not replace ATMs, they have a place in the market as a niche solution. However, at this time, financial intuitions need to train customers on the advantages of using them.

Furthermore, credit unions and banks need advertising campaigns. Once these intuitions get their customers to use video tellers, they have the option of using the machines for personalized advertising.

For example, when a customer uses the machine, the automated video teller can display a personalized ad based on the type of transaction the customer conducts. Additionally, the machine can educate the customer on all of its different functions.

Urban Areas and the Future of the Interactive Teller Machine

The urban market will play a role in the future of automated video tellers. As banks continue to consolidate branches or merge with one another, video tellers have the opportunity to take the place of closed branches.

This will give people in the affected areas the same access to banking functions. Furthermore, these machines have the ability to serve urban areas on a 24/7 basis.

However, the future of the interactive teller machine also depends on brand awareness. More people need to know about them and how and why to use them.

Currently, 70% of their usage takes place when intuitions remain closed, especially in the morning hours. Placing these machines in high-commuter areas will help automated video tellers thrive.