Banks redefine role of teller in move toward technology
As mobile and automated technology changes, reducing the need for bank branches and changing the way customers interact with their banks, the industry is being forced to change with the times.
It's also making it much less likely that a customer will interact with a human when they do come into a branch.
Just this week, JPMorgan Chase announced plans to close 5 percent of its branches over the next two years. The 300 branch closures are part of a $1.4 billion cost-cutting plan for JPMorgan, the company said during its investor day presentation Tuesday.
As with other banks, teller jobs have been one of the main targets at Chase Bank.
JPMorgan said said tellers handled only 42 percent of all bank deposits last year, down from 90 percent in 2007. Even visits to ATMs have become less necessary as the industry introduced online and mobile banking.
It's a similar story across the industry.
When Ashley Dennis first started working for PNC Bank, she came in as a part-time teller at a branch in Troy. Three years later, her job description has completely changed.
Dennis is now a "universal sales consultant," which means she handles transactions, assists customers with online transactions, advises on different products and helps customers use automated machines for deposits. She soon will become a notary. Across the industry, multiple jobs are being consolidated into one position.
In the past, the teller was the first face you'd see when coming into a bank. The job typically paid good money while not requiring a college degree. Now, the role of teller is being redefined.
"The job is changing. But that's the only thing necessary in life is change," said Dennis. "They train us to handle it, so it's not a big shock.
Banks have seen an accelerating decline in branch traffic over the last five years, says Bob Hedges, a consultant with AlixPartners. In just two years, as banks have rolled out more options for mobile, app-based and online banking, the number of people coming in to banks has dropped 25 percent.
"There's still as many people opening new accounts, and just as many people changing banks," said Hedges. "It's just that an increasing number of those transactions are being done online."
Because operating costs for branches eat a large chunk of the budget, banks have been moving toward automated kiosks offering a wide array of functions, and in-store tablets to assist with information and processing.
The traditional teller job, in which an employee processes transactions behind a counter, soon will be a thing of the past, says Hedges.
A changing role
Branches and their tellers will still play a role in serving the poor or elderly, who may not have access to the new technologies, said Mac Brantley, spokesman for the Michigan Bankers Association.
"Banks are required by federal regulations to provide assistance to the elderly and to serve folks who are in poverty," he said. "While there may be a virtual teller or ATM machine, there will still be folks at the bank."
Branches are an essential part of the banking routine for some.
Sterling Heights resident Jerry Baran is tech-savvy and knows how to check his accounts and transfer money online. But the 68-year-old said he would never feel comfortable depositing a check via smartphone photo. He prefers a teller.
"I either go in or go through the drive-thru. I like to go in to talk to people," he said. "I don't feel comfortable with a machine."
Baran said the staff at his usual Bank of America and Huntington Bank branches have changed in recent years.
"I feel bad when I see people disappearing," he said.
In May 2013, there were 527,680 bank tellers employed in the United States, according to the most recent information available from the Bureau of Labor Statistics.
In Michigan, 15,560 people were employed as bank teller that month, according to the Bureau. That's compared to 17,740 in May 2009. As the number of positions drop and the responsibilities increase, the average annual salary has increased slightly, from $24,750 to $25,490, during that same time period.
It also marks a change in priorities for banks, says Dennis Koons, president and CEO of the Michigan Bankers Association.
"Each bank will be making individual choices in what they invest in. There's so much competition in the industry," said Koons. "But those tellers are still available to help customers."
From the banks' perspective, the transition to more automated technology is good for business.
Bobbi Jo Lucas, Fifth Third Bank's senior vice president and head of their retail banking in Eastern Michigan, says the bank has begun transitioning into a new model for branches with more automated kiosks in an open environment. Those desks at the front are gone. Instead, if customers want privacy, they can go into one of several offices to speak directly with a banker. The number of employees at a branch can be reduced to three or four down from the current standard of five.
"Once the customer opens an account the likelihood of them coming back in is pretty slim," said Lucas. "Once people sign on through their phone, they don't even use their computers."
At Chase Bank, the company is moving toward the branch of the future, which will be smaller and have automated kiosks. It also is flipping the staff makeup at branches, so now there will be more financial advisory jobs and fewer transactional jobs.
Teller transactions are now among the most expensive for banks to process. It costs JPMorgan roughly 65 cents each time a deposit is made through a teller, more than eight times the cost to process an ATM deposit. Deposits through a smartphone costs the bank three cents.
A spokesman for Chase Bank said it was too early to know which bank branches will close. JPMorgan had 5,602 branches in 2014 and employed roughly 46,000 people at those locations, not including branch managers.
At PNC, about 250 branches in 19 states and Washington D.C. have been consolidated, leaving about 2,700 open.
Over the course of 15 months between 2013 and 2014, Fifth Third cut 1,000 jobs, mostly tellers, at many of its branches. About 200 of those jobs were shifted to other positions. It marked an overall 10 percent cut in banking center staff since the end of 2012.
It's the same story for most big banks, but the push for new technologies isn't as strong among smaller community banks and credit unions, said John Dolan, a Wayne State University law professor and expert in bank and consumer relations. As a result, the traditional role of teller might last longer at small financial institutions.
"It may be there are some opportunities there for tellers who face a dead end at one of the larger banks," said Dolan.
At the much smaller Bank of Ann Arbor, replacing people with technology is not part of the plan. The bank grows every year and part-time teller positions have been converted to full-time, said Patti Judson, executive vice president and chief operating officer.
"When they want a service, they want to know the person, to have that name and a face," said Judson. "You can't replace that."
Part of the banks' strategy for change is providing retraining opportunities for existing employees.
"It's become a developmental role to have that teller become a personal banker," said Fifth Third's Lucas. "Many of these people move into banker roles in the future."
For now branches aren't dead. While consolidation and closures will continue, it's not something that will happen over night, says Hedges. And adaptation will be the key to survival for banks and their employees.
"You're going to see a retraining of the pool to equip them with more technological capabilities; you're going to see more expertise in branches," he said. "You've still got to give consumers a reason to come."