NCR Confidential

BRANCH TRANSFORMATIONNCR solutions and services delivering disruptive change to bank revenue models and physical network distribution

Jenny Clawson, Branch Transformation SpecialistJenny.Clawson@ncr.com

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NCR Confidential

Demand for Physical and Digital Channels

Customers now expect multiple ways to interact with you. They want to engage when, how and where it’s easiest for them.

Source: FMSI, NCR, Tower Group

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BranchOnlineContact Center

But branches are not going away

Source: CEB Tower Group 2011

New Account Origination by Channel (2009-2013P)

Most accounts are still opened in the branch.

NCR Confidential

Branch Fundamentals Are Changing Rapidly

• Teller transactions have decreased 31% in the last 10 years (FMSI Annual Teller Line Study)

• Branch transactions are projected to decline another 14% by 2015

• ATMs are projected to grow 6% by 2015

• Branches remain the key sales locations - 90% of all current accounts are opened in the branch (Deloitte)

MAJOR BANKS PURSUING BRANCH TRANSFORMATION AS A RESULT

NCR Confidential

Forces of change: “The New Consumer”

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2012 is a milestone year. Children born in 1994 will turn 18 – becoming the first adults to live their 

entire life in the presence of online retailing.

Omni‐channel}

}Multi‐channel

Singlechannel

46% of all 18‐24 year‐olds would choose access to 

the internet over access  to a car.

While multichannel shoppers  are good for business – they spend  

15‐30% more than single‐channel 

Source: Yahoo Finance, “Eight Products the Facebook Generation will not Buy” – April 2012

Omni‐channel shoppers are better   for business – spending 15‐30% more than 

multi‐channel shoppers

New Consumer 

NCR Confidential

Why Teller?

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Too ComplexDon’t know how

Teller Addict

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

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Branch Trans

Teller TransATM/SSAssisted SS

Teller Transactions Branch Trans 2.0Branch Trans 1.0

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Value of Assisted Service

Leveraging self service to deliver the next generation oftransaction efficiency, consumer experience and sales opportunities

Strategic and economic impetrative to:• Migrating next phase of routine transactions to self service• Simultaneously improve the consumer experience and sales generation

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Full Service

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Staff Consumer

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Assisted Service (In Person and Remote)

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Remote Assistance for Self-Serv

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The travel industry has taken innovative steps to:• Create a seamless

consumer experience that spans multiple channels

• Disruption and automation of the check-in process

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In-Person Assisted Self-Serve

Consumer have embraced self check-out at super-markets and retailers:

• Consumers self select based on convenience, speed and size of ‘basket’

• Retailers deployment strategies vary based on financial objectives

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NCR Interactive Portfolio

InteractiveEXPERTInteractiveEXPERT

InteractiveTELLERInteractiveTELLER

InteractiveBANKERInteractiveBANKER

Facilitation of remote transactional banking

through direct device and self service interaction

Facilitation of in person transactional banking via

banker capable of intervention and over-ride of

self service interaction

Allows remote experts to fulfill product sales through

video and remote device control whether the

customer is in the branch, online or on a mobile device.

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NCR Confidential

“Wells Fargo Reimagines the Bank Branch”WALL STREET JOURNAL – APRIL 13, 2013

• Full service branch banking format delivered in 1,000 sq. ft. or less of space

• Customers will be able to interact with a roving bankers who are available to assist during business hours and then the branch converts after hours to a 24 hour self-service zone.

• The capital and operating costs of the branch are ~50% less than a traditional branch, while offering similar levels of sales, service, and transaction capabilities.

• NCR is the branch design and self/assisted-service technology partner for the project.

SOURCE: Articles and press in the public domain 12

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Employee

Interactive Teller

Interactive TellerInteractive Teller

NCR

Framework

Consumers

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See & speak with a LIVE teller

Transaction types:95% 

• Cash Deposit

• Check Deposit

• Check Cashing

• Cash & Coin Withdrawal

• Account Transfer/Payments

• Customer Service Inquiries 

• Bulk Note and Check Accepter

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NCR Interactive Teller

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+138%Teller Referrals

+15%Asset Growth

-50%Reduced cost per transaction

-41%Teller line cost reduction

NCR Interactive Services Update Customer case study results on key operating metrics of retail distribution

+86%Service hours expansion

+70%Same store product sales

Acceptance Among Demographics

Current User

Potential User

>65 64-55 54-45 44-35 34-25 24-18

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50%

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NAV

AIL

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LE

Source: Consumer Research White Paper 2010

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> 132 FI’s 500 Units 41 States 10 Countries

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Branch of the FutureW

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Express Branch

NCR Confidential 21© 2013 NCR Filename.pptx v. 0.1 YYYY-MM-DD Author Document ID [Edit via Insert > Header & Footer]

Micro Branch

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Louisiana Style

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Structuring higher profitability ‘points of presence’ around the consumer

• New branch assets annual operating costs down 51% compared to traditional branch

• Annual sales up 76% ($792k) through service expansion

Points of presence: 4 Points of presence: 9

Branch

ATM

Iconic

Express

Micro

Self Service

ATM

Today Tomorrow

Target segment/micro market

Deliver alternative distribution network for ~42% of traditional branch costs

NCR Confidential

US Bank at NC State University

Solution Business Drivers achieved:•Expanding service delivery footprint to new markets•Eliminating traditional building and staffing costs•Increasing brand penetration to non-traditional locations•Offering extended banking hours as a competitive differentiator

Brand Bank

• Early deployments at mortgage offices –terminals present at locations without a previous teller presence

• First units deployed at a mortgage office saw $700k+ in new deposits in the first week

• Offering of new account openings to be serviced over the Interactive Teller

Expanding Network Distribution and Enhancing Service

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Business Case Study: American Heritage

American Heritage CUGrocery Store Branch

Welcome Station, 2 PTMs, offices

Focus on Sales and Service

1400 New accounts 1st Year1100 New accounts 2nd Year$7M in Assets migrated

GECU

• 400% improved FTE utilisation• Average teller wait time cut to 20 seconds

• Average session time of 2.5 minutes• 89% of GECU members say they prefer the Interactive Teller because of expedited service

• GECU is now achieving 50% of lending sign‐ups over interactive solutions

Enhancing Consumer Experience and Growing Existing Market

NCR Confidential

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Time Convenience- Dollar Bank

Prior to ITM, No Branch Hours after 7Now 23.4 % of activity is after 7

26% of Mon-Friday activity is after 7

Busiest TimesSaturday 3 p.m.-7 p.m.Mon-Fri 5 p.m.-8 p.m.

Saturday ExperiencePrior to ITM, hours were 9 a.m. 3 p.m. (volume was light)

First Capital Bank of Texas24 x 5 • Catering to a customer base heavily concentrated in the manufacturing, medical, and oil industries

• Combine Cash Recyclers in Branch and Interactive Teller in Vestibule and Drive‐up

• Solve Teller Turnover Issues

Expanding Service Hours

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Business Case Study: MHV

22 PTMs in ten branches

2 Drive-Up units

24/7 teller services

65% visits outside branch hrs*

28% visits on weekends*

Mid-Hudson Valley FCU

United Bank<iframe width="560" height="315" src="//www.youtube.com/embed/BH_vLaUXqCQ" frameborder="0" allowfullscreen></iframe>

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NCR Presentation Template23/10/2014 32

NCR Confidential

63 PTMs, 6 38AIT in 16 branches

40 centralized Tellers

87% increase in teller service hours

Two pay grades increase

40% reduction in teller labor costs

Sales-focused branches

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Business Case Study: CFCU

Coastal Federal CU

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69%SALES / FTE / DAY*

• 15 branches• 2.8 Products Per FTE per DAY

Sales & Service Focused Branch- Coastal FCU

NCR Confidential

How Does Interactive Teller Change the Branch?

Extend reach into new locations

Extend Hours

Pneumatic Tube Replacement

More Efficient Staff Deployment

Create a Sales-Focused Branch

NCR Confidential