New TowerGroup Research Director in Retail Banking Practice Examines the Evolution of the Bank Teller

8 July 2008

Financial services institutions will soon be forced to redefine the “classic” role of the bank teller, thanks to the decreasing number of teller transactions per year, advances in bank teller automation technology, and the rapid expansion of online and contact center channels. New research from TowerGroup finds that to meet customer demand while still achieving overall cost reductions, the teller role must evolve: Retail banks must add skills in sales and service to tellers' current transaction processing responsibilities.

TowerGroup estimates that the number of teller transactions per year in the United States will decline from 10.1 billion in 2006 to 9.8 billion by 2010 while the number of sales and service transactions will increase. Although customer demand for teller transaction processing services remains high, many retail banks have already implemented tools to streamline transaction processing, enabling tellers to step out from “behind the glass” and become more active in sales and services programs.

The author of the research is Tom Brogan, a research director and the newest member of the TowerGroup Retail Banking research practice. “In comprehensively changing the role of the teller in branch banking, retail banks should ultimately look to create a ‘universal teller,’ one who will be best positioned to handle all customer requests for transactions, service, and sales,” said Brogan. “To ensure a successful evolution of the teller role, financial institutions must overhaul their thinking about this job to bring it up the ‘food chain.’ They must upgrade teller compensation programs, enhance the teller automation desktop, adapt recruiting practices, and redesign training programs.”

Highlights of the research include:

• TowerGroup predicts that the number of service transactions performed by all branch staff will decline as customers take advantage of other delivery channels to fulfill their service needs. Sales transactions will increase substantially, in essence replacing teller volume.

Despite banks’ efforts to improve efficiency and simplify the job of the teller, an overriding concern remains the historically high turnover rate for tellers, particularly in urban areas. TowerGroup estimates that the turnover rate for full-time tellers is 33 percent, while the turnover rate for part-time tellers is much higher at 53 percent.

• Technologies such as teller image capture devices, card readers, cash recyclers and dispensers, and integrated teller application software will continue to be key elements that drive tellers’ productivity.

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