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Evaluating Universal Teller: What do the numbers tell us?

June 25, 2013

By Philippe Asselin, VP of FMSI

The Teller Line Study has shared how branch volumes continue to decline over the years as new technologies enable account holders to do many of the things they used to do at thebranch through other mediums.  This change has attributed to the labor cost per tellertransaction to increase by 45% over the past ten years, and has challenged the leaders in the financial institution industry to come up with solutions to stop or reverse the labor cost increase trend.

One of the strategies many financial institution leaders have turned to is the use of universal tellers. A universal teller is typically defined as an employee that can do anything on the teller or sales side, including account maintenance, new accounts, loans, etc.  Some financial institutions use them in dialogue type branches, or pods, or others as non-traditional means.  Typically, higher volume branches do not use universal tellers, as they are able to have the volume to allow for the roles to remain separated.

The migration to universal tellers can be more successful when institutions utilize sophisticated scheduling and reporting methods to better meet customer need on the teller line, which results in improved service and reduced costs.  These sophisticated methods enhance the universal teller approach, because, if the operating expenses increase, management will need to have the data to help understand why.

Universal Teller: Adjusting your Approach When Needed

Jenee Rawlings, Senior Vice President of Operations at Yolo Federal Credit Union (Yolo FCU), recently shared with me that her team decided to pursue a universal teller approach some time ago.  With the assistance of sophisticated reporting methods, they determined they were not reaching the goals and ROI anticipated by the universal teller move.  Also, morale was less than desirable at times, as not everyone wants to be extroverted and sell.  Similarly, not everyone good at sales wanted to perform accounting or teller type skills.

Despite not achieving their initial goals, Yolo FCU still uses universal tellers, but only two of them instead of 20.  With the help of detailed reporting from FMSI, Yolo FCU has made the necessary adjustments to the program, which has led to better aligned competencies, improved productivity, reduced expenses, improved service/morale, and reduced turnover.  Jenee still monitors her universal tellers’ performance and results regularly, and utilizes them for informed business decisions.

Universal Teller: Customer Perception

The idea of having one employee that can handle all things sounds like the best possible scenario for the customer.  Why then did traditional banking models have the two skill sets separated over the last century?  The simple answer is service is at risk when wait times can quickly get out of hand.  For example, every account holder that walks in the door can represent complex transactions or simple transactions, and if multiple complex transactions happen to take place at the same time, the next person to walk in the branch will have to wait longer.  The possibility greatly increases of an account holder being in a situation where they have to wait an undesirable amount of time, if there is not a division of labor between simple and complex transactions.  Educating your account holders to carry out their simpler transactions either online or over the phone can help them avoid this situation.

Universal Teller: HR Perspective

Some company’s HR departments have had great success attracting and retaining top talent.  Others seem to struggle in certain areas, or altogether.  One concern with universal tellers is the difficulty finding employees with the entire competency levels required to be successful in that role—which some may say are similar to what would typically be found in a supervisory role.  If the candidates are difficult to find, it can lengthen the talent acquisition timeline, and therefore increase the cost per hire.

Universal Teller: Salary

Due to the increased qualifications, universal tellers typically have a much higher salary.  Management teams need to be ready to collect the transaction data required to determine the performance of universal tellers.  With this valuable ongoing information they need to fully understand the cost implications of a universal teller approach.  What additional revenues and service improvements will be needed to cover the incremental cost of a universal teller approach?  While it can be difficult to quantify some of these metrics, sophisticated reporting methodologies should be employed for due diligence purposes.

Universal Teller: Marketing Perspective

The marketing perspective for any type of branch makeover is an interesting one to consider.  Have you ever been to a location for a business and then went to another location from that business, and had a completely different experience?  Did you feel excited, confused, or concerned?  Many financial institutions have branches that differ from one location to another, and the account holders may wonder what to expect when they go to a different location.  Where do I get in line?  Where are the people and employees?  Consistent branding is a daunting issue, as changing from one business model to another, or adding new technologies can impress or possibly alienate the customer.  Be sure to carefully consider these factors when rolling out a universal teller approach.  Advanced communications about the universal teller approach, or signs at the branches can be helpful to account holders during the transition.

Gauging the success of a universal teller model can be a challenging task, but understanding your performance management information is the key to its success.  Understand your goals and how long it will take to get there.  Carefully track your results and make adjustments, like YOLO FCU, as needed.  Remember not all approaches work for every institution.  Universal tellers or traditional teller models have had measured successes, and some have had measured failures.  Know your performance and make sure you can clearly answer the question, ‘what do your numbers tell you?’

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