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Are bank tellers an endangered species?

When I recently spoke to a young family acquaintance who had taken a job as a bank teller, it got me thinking about the changing nature of that role, and its future prospects. Particularly as I recalled a couple of news articles on Finextra recently, such as Bank of America tellers petitioning their bosses to cease the roll-out of video teller ATMs and Barclays' plans to axe 1700 branch staff 

We're all familiar with banks' PR efforts in their 'branch of the future' initiatives, and research that shows banks still like branches because they are an effective sales channel and lots of customers prefer them when dealing with complex transactions (or having to deposit cash).

But at the same time we've all seen the stories about small communities being deserted by banks as digital channels prevail and physical channel costs need cutting. So I thought I'd gather some of the latest stats I could find to take snapshot of where bank branches are heading.

As evidenced by the number of bland pub franchises now occupying large former High Street bank buildings, branch closure has been a steady trend in the UK since 1989. Nottingham University, found that nearly 7,500 branches (40%) closed between 1989 and 2012. It says that the rate of closure had been slower since the year 2000. But community campaigners point to recent announcements from the big banks as an indication that branch closures are about to ramp up again.

In Australia, the past 12 months saw the nation's branch network shrink for the first time in 11 years, even though mergers over the past five years have seen greater concentration of ownership by the Big 4 of ANZ, CBA, NAB and Westpac.

In the US, there had been sporadic growth in branch numbers since 2000. But record number of bank closures at the lower tier and cost cutting by the survivors is reversing that.

SNL Financial says US banks and thrifts shut 2,267 branches in 2012. AlixPartners, a New York consulting firm , says that put the bank-branch count at 93,000 -—the lowest tally since 2007. The firm expects the figure to drop to 80,000 over the next decade, putting the total closer in line with 2000 levels.

The US Bureau of Labor statistics tells a similar tale. In 2010 it expected "little or no change" or a rise of 1% on the number of tellers in the country by 2020, up from 560,000.  But by 2012 the number had already fallen slightly to 541,770 

So, with fewer branches and fewer customers lining up in them to conduct basic transactions, what will become of the teller?

The responsibilities entailed have already shifted more from customer service towards sales. Online employment forums abound with talk about branch management not caring about anything else but teller staff meeting credit card and loan sales targets, regardless of how reliable they are at transaction handling, or resolving issues for customers.

This pressure and relatively low wages lead to high staff turnover. So it seems for any young person looking to get into banking via an alternative route than graduate intake programs, branch employment is still an opportunity - but only if they can handle the hard sell. 



Comments: (6)

Brett King
Brett King - Moven - New York 07 December, 2013, 05:24Be the first to give this comment the thumbs up 0 likes

And the answer is... YES

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 December, 2013, 08:45Be the first to give this comment the thumbs up 0 likes

RE-KYC, request for change of postal / email address and release of dormant accounts are examples of new tasks that are regularly entering the banking milieu of late. Much as customers might want to carry out such tasks remotely, they seem to require branch visits universally. As highlighted in this Q&A, bankers have started visiting customers at home or office to collect documents for new account opening, mortgage application, etc. If tellers can be retrained to handle "compliance" and "omnichannel" activities like these, they won't become an endangered species, even if volumes of their traditional tasks decline. 

Brett King
Brett King - Moven - New York 09 December, 2013, 10:00Be the first to give this comment the thumbs up 0 likes

@Ketharaman - the problem is one of regulations and policy. Are you telling me customers would rather go down the branch to change an address, that do that online if they could at all avoid it?

That is what we call a 'false positive'. Saying branches are great because they let customers change their address in person is one thing, forcing customers to do that ONLY through a face-to-face interaction is another thing entirely. 

A Finextra member
A Finextra member 11 December, 2013, 10:58Be the first to give this comment the thumbs up 0 likes

I wonder if any bank tellers read this, and if so, I hope they understand that some of us, as consumers, really value them.

People who understand about, care about, and have time for, people.

Sure, technology means many of us don’t need to bother them with mundane things like ‘how much do I have in my account’. Maybe for large parts of our lives we don’t need to talk to a teller at all.

But that’s not all of us – and I’m talking about people who have been banked all their lives, not just the ‘unbanked’.

Some banks prefer not to service people who can’t, or prefer not to, interact with the banking sector exclusively via technology. That’s their choice – up to a point. If all banks do that, there’s a problem. And it’s a big one.

As the chairmen of the main UK banks said at the BBA conference – ‘we’re granted a licence by the government and with that comes social responsibility’.  Politicians listen hard to the unmass market, precisely because it can get left out; and that sometimes results in regulation; which in turn results in the kind of unintended consequences that hog-tie banks from being able to invest in new technologies such as app-based banking.

‘Banking’ doesn’t just mean ‘banks’. So called ‘non-bank’ providers such as Credit Unions are part of the ‘banking’ ecosystem. They can help more (if the banks help them to).

The role of the bank teller does need to change, to adjust. That’s progress. But it’s not prudent to extrapolate that to ‘in the future all people will interact with their banks exclusively via electronic channels’. Technology can help….


Individual banks quite rightly will choose to deal with certain segments, but ‘banking’ needs to deal with everyone. Or it will be forced to, and that will hurt more.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 11 December, 2013, 12:57Be the first to give this comment the thumbs up 0 likes

@NeilB + 1. Kudos for bringing up this angle, which I'd completely forgotten about. In all these years of banking with several banks, I can recall several occasions when tellers have helped me out e.g. Increase yield by prematurely closing a fixed deposit and reopening it to take advantage of a recent increase in interest rate; Correct the account number I'd written on the pay in slip while trying to deposit a high-value cheque that favored a different a/c #. I'm sure there must've been an equal # of occasions in which branch managers and relationship managers were involved in a similar capacity but, somehow, I'm only able to remember these bankers in connection with RE-KYC, NetBanking activation and other painful tasks that forced me to visit branches. 

Brett King
Brett King - Moven - New York 11 December, 2013, 20:33Be the first to give this comment the thumbs up 0 likes

@Neil Absolutely. While all the metrics in branch usage are going south, whether it is average number of visits per customer per year, revenue, utilization, cross-sell/up-sell conversion rates, etc. the fact is that there is a role in the psychology of customers for a branch when they get into trouble. 

While the branch for most customers won't any longer factor into their day-to-day banking environment, when a customer has an issue, tries to solve it via mobile, web, call centre and can't - they'll go to the branch. At that point, the person who serves them in the branch is the single most important person in the brand relationship and if they can't fix the problem on that one visit - the brand relationship is over. The implications of this are that you need fantastic all rounders, great service people (not product or transaction) and excellent in-branch support systems to make that happen. Not tellers, not financial product advisors.

Oh, and if you are like @Katharaman and you think that Mr. Bank 3.0 has just predicted branches are coming back because we need people in the branch to solve our biggest service problems? You're wrong. We will still only need half the branches we have today to provide this kind of support network, and then they will generally be 1/3rd of the size they are today hovering around 1-2,000 square feet in footprint.