The Quest for Video Teller ROI


Are interactive teller machines the branch savior, or are they just prolonging branch extinction?



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In a recent study, Cornerstone Advisors looked at whether banks and credit unions developed ROI estimates before investing in ITMs and the value these institutions realized from those estimates. In the study Cornerstone uncovered the business cases and rationale that went into the thinking of financial institutions that have deployed ITMs, and the operational performance, deployment issues and challenges the FIs experienced as a result of the technology.

The study data is from a sample of 11 banks and credit unions averaging $1.5 billion in assets.

Key study findings include:

  • Overwhelmingly, productivity improvement was the primary business rationale for investing in ITMs, followed by improved sales and account opening effectiveness.
  • FIs that have committed to going tellerless in their branches demonstrate greater utilization of the machines.
  • Institutions with ITMs wrestle with a range of operational challenges including privacy issues, network connections, core integration and training.
  • For FIs that deploy ITMs, the productivity business case is the most compelling business case to pursue, as increased sales volume has not been demonstrated.

Performance metrics included in the report:

  • Capacity ratios – including metrics like branch penetration, ITMs per branch, and ITM FTEs per ITM
  • Cost ratios – include ITM cost per transaction, ITM cost per ITM, and ITM cost per ITM FTE
  • Transaction ratios – including ITM percentage of teller transactions, ITM transactions per customer, ITM transactions per ITM, and ITM transactions per ITM FTE