By Neil K. Kool
Vice President of Sales
DEI Incorporated
Phone #: 513.825.5800
Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Web: www.dei-corp.com

 

 

 (May 08)

While banks continue to compete with each other for retail deposits and market share, there is a new delivery system that should be considered when analyzing your next de novo branch or renovation.  The concept is called dialog banking and in the last three years it has gone from a bleeding edge idea to a leading edge opportunity to differentiate your bank and provide the outstanding customer service your institution promises to customers.

First, what is it?
Dialog banking uses a teller pod, which is typically a round workstation that incorporates a cash recycler, where two cross-trained banking representatives can handle everything from basic transactions to loans.  In keeping with the basic principles of retail design, the pods are located in the back to bring customers through the space where a traditional teller line would have been.  This allows the bank representatives to greet the customers upon entering, engage in conversation, and assess their needs.  The dialog set up removes the barrier of the traditional teller line and creates an environment that is more customer friendly and inviting. 

For those who immediately think of the security aspect, the teller pods are actually safer than the traditional teller line because the recyclers have a robbery mode, which dispenses small bills very slowly.  Because there is no deal drawer, a teller has no free access to cash, thus deterring a robber from casing the bank.

How does it work?
The biggest benefit to the dialog concept is that the actual banking transaction becomes secondary.  The transaction becomes mostly automated due to the cash recycler, allowing the teller to interface with the client rather than spending time counting cash.  The automation frees up the teller to discuss other products/services, build a relationship with the customer, and cross-sell. 

When it comes to privacy and confidentiality, the dialog concept actually creates more space between two customers than if they were standing side by side at the teller line.   Privacy panels help shield personal information on the computer screen.  As one looks around the retail landscape, whether it is a restaurant, coffee shop, home center, or electronics store, the idea is to create an environment that encourages and fosters great customer service; dialog banking does that by allowing more customer-client interaction versus less.

Does it cost more to have dialog pods?
The good news is the cost of construction and materials for building pods versus a teller line is virtually the same.  However, there is an investment to purchase a cash recycler.  The financial upside to the recycler is the efficiency and automation of the dialog concept - one teller can do the work of one and a half.  Another benefit is that unbalanced cash drawers and internal theft become a thing of the past due to the automation and security of the cash recycler.  Therefore, the initial increased cost in the dialog concept certainly has its return on investment relatively quickly.

Is it difficult for my staff to use?
Certainly some training is involved to convert existing tellers to the dialog concept.  Some will embrace its automation and the ability to interact more freely with customers.  Other tellers will need time to get used to a new way of doing a transaction that they have done the same way for many years.  However, once the tellers see how the customers respond favorably to this delivery mechanism the transition becomes relatively easy.  A benefit of the automation also becomes the fact that your hiring practices for a traditional teller can change.  Now the waiter or waitress who has exceptional customer service skills can become a teller at the bank with much less training than would have been required of a traditional teller.  Your bank can look for sales people and customer service representatives to fill teller roles.

Where is the dialog banking concept being used?
The dialog banking concept is being used by both banks in small communities and those in metro markets.  Both large and small banks that are looking to highlight customer service and create a better banking experience are looking at this concept to set themselves apart from the competition.  You might think that it sounds somewhat “techie” and would better suit the Gen X and Gen Y demographic.  It is appealing to those groups, but is equally attractive to the baby boomers because every generation desires greater customer service.  Every generation of customers wants to feel that they are an important client of the bank.  The dialog banking environment lifts the barriers between teller and client and allows for relationships to be built.

I can continue detailing the dialog banking concept and explain how it makes a customer feel good about the bank and solidify a client relationship, but at the end of the day there needs to be long term positive financial impact to change the course of your existing business practices.  I can share with you stories of bankers experiencing an increase in deposits with the advent of the dialog stations but one particularly powerful example comes to mind.  A bank in the Northeast holds a new checking account campaign from Memorial Day to Labor Day each year.  With their new facility, which incorporates dialog stations, the branch saw a 437% increase in new accounts in 2007 compared to the same period in 2006.

While dialog banking has a huge upside, it is not for every market and every bank.  What is certain is that it should be considered by bank management for the next new facility or remodel.  Most banks are selling the same products and services; one way to differentiate is through people and delivery mechanisms.  One thing we know is for most of the banks’ clients, big and small, the most common transaction is that which occurs at the teller line.  You must analyze if you are maximizing that brief opportunity to provide top level customer service, generate new fee income, and cross-sell loans and investments. If done right, dialog banking can assist in all of those aspects and enhance your brand. 

About the Author

 

Neil K. Kool is the Vice President of Sales at DEI Incorporated.  He has 14 years of banking experience.  He can be contacted at 513.825.5800 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

 

 

  

 

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