Interactive Teller Machines & Their Future In India

In order to stay up with the rapidly evolving digital environment and the ever-insatiable demand for a more streamlined member experience, local credit unions and banks are increasingly searching for new alternatives, and Interactive Teller Machines are surfacing as the sure-shot solution. There are constraints on how many branches a bank can open. These devices, which are essentially evolved ATMs, offer a unique way for financial institutions to service consumers in highly remote or urban regions. You can use an interactive teller machine to do practically everything that would typically require you to visit a bank branch and speak to a teller. For banks, these machines now provide a new corridor to improve productivity and save expenses and, at the same time, provide an excellent approach to streamline the user experience and increase overall member satisfaction for the customers. More banks and credit unions are looking more closely at ITMs as a way to improve client convenience and expand their physical presence, and here is why.

Evolution of ITMs

The introduction of ATMs in the 1960s drastically changed the banking industry. ATMs made withdrawing, depositing cash, checking account balances, and many other services more convenient and accessible. ATMs have therefore made managing finances remotely possible and improved the efficiency of the whole process. Also, since they have been in use for over 50 years, ATMs are a tried-and-true way to get cash and conduct rapid transactions while on the go. You will need your bank card and your personal identification number (PIN) to access your accounts on these standalone devices.

Since then, increased internet and mobile penetration have paved the way for mobile banking. Now, you can perform transactions, get account statements, and more conveniently at home or wherever there is proper connectivity. But the one issue which persisted was the personal touch. The user journey consisting of customer experiences on the smartphone, while convenient, still needs the human interaction and value one receives at their local branch. While mobile banking does provide MCQs and call center services, most users are disappointed with the random person they hear on the phone and still choose to visit their branch where they can raise queries and get them answered at their pace, face to face.

What are ITMs?

An interactive teller machine is a more advanced version of the ATM that combines self-service banking with face-to-face video communication with a live teller. They function similarly to ATMs but offer a greater variety of services and additional features including remote video staff support, which allows customers to request a live interaction with a bank teller who may help them with using the teller machine or with any other service.

The ease of self-service machines and personalized assistance of live tellers are now combined with ITMs. ITMs are, therefore, a combination of all the best in each access channel. They help in making the in-bank experience available to a more significant population.

Connecting users with real people who can help them with their transactions, respond to their inquiries, and provide individualized support is one of the fundamental elements of ITMs. It differs from typical ATMs, which can only perform a limited number of automated services because of the live video contact. A camera and a microphone that are integrated into the interactive teller machine will be used by customers to communicate with a live teller. The member can ask the teller any questions they may have, and the teller will walk them through the transaction in real-time. ITMs offer customers a better banking experience than traditional ATMs thanks to their lower wait times, longer service hours, and capacity for more complicated transactions. Customers will receive individualized support from the live teller service, making it simpler to resolve any problems or complaints during the transaction process. The customer can therefore enjoy the feel of an emotional connection while not sacrificing the accessibility compared to the technological brick wall and alienation associated with a teller machine. The evolving needs of customers are fulfilled, hence, bridging the gap between in-branch experience and digital experience.

ITMs are a flexible banking option because they provide a wide range of services, such as deposits, withdrawals, account transfers, loan applications, and cheque cashing. Many ITMs also incorporate mobile banking applications, enabling users to start transactions on their cellphones and finish them at the ITM. ITMs are therefore a very desirable alternative for customers looking for ease and efficiency in their banking experience due to the seamless combination of technology and personal service and shortened wait time.

By lowering the need for staffing and branch overhead and enabling more effective resource usage, ITMs for banks can result in significant cost reductions. In remote or underserved locations where opening a physical branch might not be possible, ITMs can also assist banks increase their reach and accessibility. ITM adoption ultimately has the potential to increase customer satisfaction and loyalty while also enhancing operational effectiveness for financial institutions.

Bank branches vs ITMs

Bank branches and ITMs fulfil distinct customers’ needs and have diverse functions.

Convenience : Since ITMs are frequently open around-the-clock, users can conduct banking transactions at any time. Customers must visit bank branches during specified times due to their defined operating hours, which may be inconvenient.
Service Timings: The services provided by bank branches often include cash deposits and withdrawals, cheque cashing, account opening, loan applications, and financial advising. On the other hand, ITMs offer fundamental banking services, including cash withdrawals, check deposits, and account inquiries. However, they might not provide the complete variety of options offered at a traditional branch.
Personal Interaction: Bank branches give consumers the chance to speak with bank employees face-to-face, which some people prefer for intricate transactions or when looking for individualized guidance. Customers can speak with a remote teller using the video conferencing features offered by ITMs, but there is no in-person interaction.
Efficiency and Speed: ITMs frequently process regular transactions more rapidly than bank branches since consumers can use the self-service interface to finish transactions swiftly. Waiting times at bank branches are possible, particularly during busy times or for more complicated transactions.
Cost: Since physical bank branches need space, personnel, and infrastructure, setting them up and maintaining them can be expensive for financial organizations. ITMs are a technological solution that may eventually result in cost savings.
Accessibility: ITMs can be found in a variety of settings, such as shopping malls or drive-through restaurants, making them simple for customers to find. There might not be as many bank branches, particularly in rural or isolated locations.
Customer Preferences: While some customers may value the personalised service and in-person help offered by bank branches, others may prefer the speed and convenience of ITMs. Individual demands and preferences can influence customer preferences.

Benefits in ITM Implementation

• A wider range of services, including all basic transactions and more complex transactions such as loan payments, cashing checks, and transferring funds.

• The teller can assist with transactions and respond to any inquiries from the member, providing a humane touch.

• Provides an additional layer of security by allowing the teller to verify the customer’s identity before processing transactions.

• Increased convenience and accessibility even for remote locations

• Customers can use a bank’s services after regular business hours.

• Since a single teller can provide services at several different locations, banks can lower the overall cost of their employees.

• Reduced customer churn, greater customer satisfaction & loyalty

• Socially distanced human interaction can be used even in case of pandemics.

• Significant cost savings in terms of rent, maintenance, and staffing.

• Lower the cost per customer for providing customer service.

• ITMs facilitate remote tellers to handle multiple customer interactions simultaneously, reducing wait times and enhancing operational efficiency.

Challenges in Implementation

ITMs in India

India offers a sizable market with rising digital usage, but the feasibility of ITMs in India depends on a lot of factors. Some of which include technological infrastructure, regulatory framework, customer adoption, and cultural considerations.

• ITMs need a strong technological foundation, which includes a stable power supply and high-speed internet access. While India’s urban areas typically have good infrastructure, access to energy and connectivity in rural areas can be problematic. Increasing internet penetration and mobile usage will help in deployment and usage of ITMs in India, since stable internet connectivity is a must.

• The Reserve Bank of India (RBI) oversees the banking industry and establishes policies for putting innovative technology into use. It is currently promoting ITMs for providing digital banking products and services and for digitally servicing already existing financial products and services. RBI guidelines mention requirements regarding data privacy and information security, which are essential for usage of ITMs. Since attention to data protection & privacy laws is increasing in India, this might not be a roadblock.

• Indian customers are gradually embracing digital banking services, including ATMs and mobile banking. Building client trust and confidence in ITMs through security precautions is crucial, as is defending financial institutions from possible losses brought on by fraud or security breaches.

• India has a diverse cultural landscape, and personal relationships play a significant role in banking interactions. It was not an issue in case of ATMs or Mobile Call centers, but Video support brings its own issues especially in India, with its diverse religions and outlooks.

• Demand for financial inclusion and financial empowerment are driving the need for more accessible and convenient services, and ITMs are perfect for extending banking services to rural and remote areas. A vital part of effective usage of ITMs therefore is educating the customers.

• Implementing ITMs involves significant upfront costs for banks, including the purchase and installation of machines, training of staff, and infrastructure development. Initial investment for ITMs are significant but when long term costs are considered, bringing ITMs seems like a feasible solution to bridging the wealth gap in India.

• ITMs are right now not popular in India, it can also serve as a differentiating factor in the very competitive banking industry. Even while there are difficulties in deploying ITMs in India, the advantages, including enhanced customer support and operational effectiveness, make it an attractive choice for banks aiming to expand their digital offerings.

ITM’s Effectiveness

· 85% of ITM users reported high satisfaction levels due to the convenience and personalized service they received.

· All generations polled indicated that they would feel comfortable working with an ITM. 86% of Millennials, 85% of Gen X, 80% of Gen Z, and 72% of Baby Boomers make up this group, in that order.

· The use of ITMs for bill payment (21%), credit payment (40%), credit application (26%) and deposit or withdrawal (68%) would be comfortable for customers.

· With ITMs, 77% of financial institutions report sale closing rates that are superior to or on par with those of other channels.

· For peer-to-peer (P2P) payments, personalized homepages, photo bill pay, and a variety of other digital services, more than 25% of customers were willing to pay, and 72% of customers stated bank customization was very important to them.

· Non-ITM branch employees spend 60% of their time on routine transactions.

· Following the implementation of ITMs, banks report a 40% reduction in operational costs, mostly as a result of less staffing requirements and branch consolidation.

· Industry statistics show that ITMs have increased transaction volumes by 20%, demonstrating their popularity and adoption among customers.

Conclusion

In conclusion, Interactive Teller Machines have demonstrated their worth by providing a distinctive banking experience that combines the effectiveness of self-service technology with the personalized touch of live tellers, which brings us to our conclusion. In India in particular, staff and branch strategy has a significant role in the choice to use ITMs. Branches are becoming less a location for transactions and more a place for teaching and developing connections with customers with the introduction of ATMs (and now ITMs). Bank staff can engage in more fulfilling activities that call for human engagement thanks to ITMs.

ITMs have a favorable effect on transaction volumes, operational expenses, and consumer satisfaction. ITMs offer a convincing way to improve financial services, increase accessibility, and consider changing client preferences, even though they might not totally replace branches. Embracing ITMs can enable banks to offer improved services while streamlining their processes for a more effective and customer-centric approach as the banking sector continues to develop.

References
https://www.dncu.com/blog/automated-teller-machine-vs-interactive-teller-machine-whats-the-difference/
https://thefinancialbrand.com/news/banking-technology/interactive-teller-machines-crucial-in-the-digital-banking-age-itm-video-118731/
https://www.tidalcommerce.com/learn/interactive-teller-machines
https://www.everybitmatters.com/itms-looking-to-the-future/
https://www.qualitydatasystems.com/atm-or-itm-which-is-right-for-your-institution
https://www.ncr.com/blogs/banking/what-is-an-interactive-teller-machine