Banking on Fewer Tellers

As more of their customers migrate to mobile devices and the web, banks are rolling out branches with fewer teller stations and introducing ATMs with video tellers built in.

Banks say they’re giving customers the convenience they want, but some advocates for the elderly and disabled fear it means a decline in access.

The shift also means fewer of the banking industry’s traditional entry-level jobs in new branches.

“That’s probably one of the unintended consequences of the reshaping of how the consumer banks,” said David Barksdale, chief strategist for NewBridge Bank.

Banks are planning new branches that will be more high-tech – employees might be equipped with tablet computers, for example – and house more lenders.

But noticeably absent from the branches, the officials say, will be the long – and familiar – teller counters.

In some cases, a new branch might have just one teller.

“You’re not going to be walking into branches where there are six tellers lined up,” said Weston Andress, PNC Bank president for western North Carolina. “What you don’t want to do, obviously, is have lines of tellers, or whoever it might be, sitting there waiting for the customer that’s really never going to show up.”

That means it will be less likely that someone with just a high school education will find work in new branches. While banks are boosting other types of jobs, like lenders and other specialists, in the new branches, officials say those will go to people who hold the proper licenses, like that for a financial-solutions adviser.

Across the banking industry, the shrinking teller positions are being attributed to new technology, which enables consumers to do on their smartphones and computers much of what they once did at branches. That, bankers say, is leading to fewer customers going to teller lines, which creates less need for tellers.

“Over half our deposits are made at ATMs, not at branches,” said Robert Aulebach, an executive for Bank of America in charge of branch and ATM placement. “The better your apps are, the better your ATMs are, the better your online banking is, the more people use it. Convenience is still the No. 1 factor that people use in choosing a bank.”

At a growing number of banks, customers can deposit checks using their smartphones. Even before customers had that ability, they could pay bills online, depending on their banks.

But the changes have critics.

The trend toward more digital banking concerns advocates for the elderly. They point to a lack of access to high-speed internet connections for that age group, which the advocates see as worrisome as more banks, even small ones, are increasingly putting services online.

Elizabeth Costle, director of consumer and state affairs for the AARP’s Public Policy Institute, said adults over 60 are not as comfortable with online business transactions as younger age groups.

“They’re not digital-native,” she said. “There’s no question that they like dealing with people in person. So I think tellers and branches are very important” to them.

As banks introduce new technology, they should be careful about making sure they continue to meet the needs of older customers, she said.

“Older people actually have higher net worth. This is a big market for banks.”

In May, NewBridge Bank opened a retail branch in Charlotte. The 6,000-square-foot branch has one teller, who sits at a desk instead of standing behind a counter.

The pressure to go high-tech keeps increasing across the industry, fueled each time another bank launches a mobile or online tool.

Even small banks, which are typically slower to adopt online and mobile options, are beginning to catch up.

Raleigh, N.C.-based Paragon Bank, which caters to commercial clients and has only two branches, plans to launch its mobile platform in the first quarter, said Phillip Jurney, president of the bank’s Charlotte region.

“I definitely think you see less people behind the teller line than you did even 10 years ago,” Jurney said.

The reduction in teller lines is happening as branches are becoming smaller, a move being made as banks try to cut real estate-related expenses amid increased federal regulations.

In April, Wells Fargo unveiled a test branch in Washington, D.C. that’s 1,000 square feet, one-third the size of the bank’s typical branches. On a second-quarter earnings call with analysts, CEO John Stumpf said the pilot branch costs 40 percent less to operate.

With the hiring of more specialists, banks are making a push to close more loans and increase sales. From a design standpoint, banks are aiming to give branches “more of a retail feel,” said Nancy Everhart, a partner at Charlotte-based Little Diversified Architectural Consulting.

Everhart, who has done design work for financial institutions, said banks want branches to have a more open layout. “It’s no longer the banker sitting behind the desk peering down. It is definitely more of a friendlier-relationship kind of atmosphere that they’re trying to build.”

As soon as a customer walks into these newer branches, there might be a counter nearby where they can be helped, she said. Throughout the branch, there might be meeting areas that offer varying degrees of privacy. Tellers might be on the sales floor, rather than behind a counter.

“They can almost get out of their desks … and meet with the customer right there,” she said. “That’s where the really trendy banks are going.”

Banks are being laid out so that the focus is no longer on the teller counter, she said.

“We’re not really necessarily seeing a decrease in the number of people at the branch,” said Everhart. “We just finished a round of helping one client add not tellers, but banker loan people, in several of their branches across their footprint.”

Banks are putting, on average, three to five teller stations in each branch, down from as many as eight stations in the past, she said.

While tellers are disappearing from branches, they are popping up someplace new: in ATMs.

Bank of America this year started putting new ATMs in Atlanta and Boston. The machines have a screen that allows customers to interact with tellers in call centers in Florida or Delaware. The real-time access to tellers is available until 10 p.m. weekdays and 5 p.m. Saturdays and Sundays, the bank said.

Despite the ongoing decrease in foot traffic to teller lines, bankers say they continue to see a need for branches.

“People transact with us through a lot of these electronic channels. But when they come to buy something … they almost always buy in person,” said Aulebach. “The consumer psyche has not changed on that.”

Will there come a day when branches won’t have tellers?

“You may have fewer,” Aulebach said. “I don’t know that you’re ever going to get down to none.”

TELLER JOBS GROWTH:

Nationally, some financial-sector jobs are expected to increase from 2010 to 2020, but teller job growth is projected to lag parts of the sector.

During the decade, teller positions are expected to increase by 1 percent, or 7,300 jobs, which is “little or no change,” according to the U.S. Bureau of Labor Statistics. By 2020, teller employment is projected to be 567,300.

By comparison, the number of loan officers will increase by 14 percent, the average growth pace for all U.S. occupations during the decade.

The median annual pay for tellers was $24,100 in 2010, the latest year for which BLS data is available. Loan officers were paid $56,490.