When it comes to providing services, banks with self-service coin counters stand to gain a lot in terms of customer satisfaction. But these machines are also effective in helping banks cut costs. With the ability to sort coins and convert them into cash, financial institutions reduce the need to perform similar processes behind the teller desk, saving the business a significant amount of time. With the time savings comes a reduction in the cost of labor, since branches don't need as many tellers as they did before. They can even have these employees shift into more of a counseling role.
Both large and small banks are feeling the need to cut costs to maintain decent profit margins. The New York Times reported that one of the major banks, JPMorgan Chase, is now contracting the bank branches it has around the country. It plans to close 300 branches nationwide by the end of 2017. Currently, the bank has 5,682 branches, according to USA Today, making it the second largest bank based on physical presence. Even with this mass closure, amounting to more than 5 percent of its total, its placement would remain the same.
The branch closings are part of a $1.4 billion plan to reduce overall costs at the bank. As many banks are seeing their customers shift from talking to tellers to using their phones or going online, the cost of making a transaction with a teller becomes obviously expensive. In just seven years, the number of people interacting with tellers for deposits dropped from 90 percent to 42 percent. In addition, the cost of a teller deposit increased to 65 cents, which is about eight times the amount needed for an ATM deposit.
Cutting costs remains a constant concern in the minds of banking executives. A recent American Banker survey among chief financial officers at banks found that 48 percent of them saw cost and budget management as becoming more important over the last year. With this in mind, shifting services to the customer side can be a great way to reduce costs, and self-service coin counters can help fill that role. By allowing customers to sort coins, bank tellers become less necessary, bringing down the cost of labor at a branch and helping alleviate the pressures of running a physical brick-and-mortar branch.
June 18, 2015