Adapt and Thrive as the “New Normal” Evolves

on "November 25, 2020 3:05 pm"

For the past few decades, the retail industry has led the technological revolution. They have done this out of competitive necessity to survive. Either you adjust to the changing consumer demands, or you begin a quick journey into irrelevance. Obviously, the recent COVID outbreak has exposed those that didn’t adjust soon enough.

Imagine a time before cell phones, robotic vacuums, real-time weather alerts, or even our current savior: online shopping. It wasn’t that long ago when none of these existed.

Technology in now engrained in our DNA. We depend on it every day in all aspects of our lives. It improves how we live and work, and enables our daily tasks to become more efficient, convenient, and fulfilling. 

For the past few decades, the retail industry has led the technological revolution. They have done this out of competitive necessity to survive. Either you adjust to the changing consumer demands, or you begin a quick journey into irrelevance. Obviously, the recent COVID outbreak has exposed those that didn’t adjust soon enough.

In the credit union industry, there is a different story, a different member mindset that up until recently didn’t have the same expectations of financial institutions (FIs). It is easy to shop at a different grocery store, clothing retailer or online merchant, however, members generally haven’t changed FIs without a specific reason. COVID has begun shedding a light on the financial industry’s inability to adapt now too.

This is not to say the financial industry has not had many impactful technological advancements—it has. The issue is the disparities between how far along the technological maturity curve different credit unions (CU) are. Beyond all of the economic and regulatory challenges credit unions are facing, they now have to dedicate much more attention and resources to solving the same kind of member-demand dilemma that retailers have been grappling with for years. 
diebold graphic1
It’s an omnichannel world, we’re just living in it. 
To really understand the severity of the problem, Diebold Nixdorf would like to shed light on the issue facing credit unions in the early stages of technological maturity. Many of these CUs have online banking, mobile apps, and possibly ATMs. They can service members digitally but are still driving them into the branch for most transactions. Considering the cost of executing these transactions, you must ask yourself if there is better way. Online and mobile channels are great, but they don’t provide a solution for cash. This is where the ATM can fill a real void, specifically an ATM that accepts deposits (cash and check).

Offering (at minimum) deposit capabilities through your self-service channel can help improve your expenses and ultimately your efficiency ratio. Yet there are still hundreds of CUs around the country that do not provide this. 

diebold graphic2The times, they are a’changin'.
Next we must consider the member and what they want. We already know members are becoming more comfortable with self-service technologies in other industries, and the financial industry is no different. Members have quickly migrated to the self-service channels when their CUs have offered it and their channel preferences are rapidly changing. From 2017 to early 2020, there was a 13% rise in self-service preferred channels, per Diebold Nixdorf proprietary research. This was expected to increase to over 50% in the next two years, and this was prior to COVID! This is a telling factor that members are asking for more ways to conduct transactions. They are asking for more efficient and convenient options to bank on their time, with the transaction sets they need to conduct. By not accepting deposits at the ATM, CUs are essentially forcing members to the most expensive channel. Meanwhile, the early deployers of DA are now seeing a huge opportunity to further reduce costs by recycling cash deposited at the ATM.

 

What’s your migration strategy? 
A third component that CUs often neglect to consider enough is the employee experience. In a branch environment that is transaction heavy, the staff are busy churning through transactions as quickly as possible. They also need to spend time processing checks, handling and balancing cash drawers, completing vault buys and sells, handling discrepancies, and identifying opportunities for referrals or cross-sells. The most successful CUs recognized this issue years ago and their solution was to migrate as many simple transactions as possible out of the branch so their staff can focus on engaging more with members. Ultimately, that leads to better member satisfaction scores and an improved overall employee experience. A major driver of transaction migration is a deposit-accepting ATM.

As technology has improved, so have the capabilities of the ATM. Merely having a deposit-accepting ATM is no longer the most efficient, convenient or fulfilling option. Members and branch employees alike do not enjoy using envelopes to deposit cash and checks. It isn’t a good experience and the cost to the CU for balancing is cumbersome. Deposit Automation technology creates the best overall experience and efficiency for migrating transactions out of the branch.

CUs that do not have ATMs with deposit automation are forcing their members to transact on the bank’s time, not the member’s. And if we have learned anything from the retail industry, this is not an ideal long-term strategy… especially with the acceleration of our dependence on self-service due to COVID.

Are you ready to get started on a customized DA strategy with Diebold Nixdorf? Contact Bob Makahilahila today for support and guidance on automating your self-service channel.

About Diebold Nixdorf

Diebold Nixdorf, Incorporated (NYSE: DBD) is a world leader in enabling connected commerce and a League business partner since 2016. We automate, digitize and transform the way people bank and shop. As a partner to the majority of the world’s top 100 financial institutions and top 25 global retailers, our integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of consumers each day. The company has a presence in more than 100 countries with approximately 22,000 employees worldwide. Visit www.DieboldNixdorf.com for more information.