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Credit unions spending big for drive-thru technology upgrades

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Credit unions spending big for drive-thru technology upgrades

Credit unions are increasingly willing to spend big money for upgrades to their drive-thrus, which enable members to bank "face-to-face" with a live teller from the comfort of their cars.

Interactive teller-enabled ATMs, or ITMs, allow credit unions to offer access to teller services from a drive-thru during nontraditional banking hours and ultimately to build smaller branches. And their use seems to be increasing.

NCR Corp., which works with credit unions and banks on solutions including interactive teller software, estimates that more than 90% of all branch transactions can be completed using the technology. Aaron Gould, communications manager at NCR, said in an email that on a year-over-year basis, the company has seen double-digit growth in the demand for interactive teller-based drive-up ITMs at credit unions.

One of those credit unions that has recently implemented the technology is Tucson FCU. In addition to two in-store branches, Tucson FCU operates 5 stand-alone branches, and four of them feature interactive teller machines at drive-thrus that connect members to a centralized call center.

Krystal Adams, vice president of member experience at the credit union, said in an interview that Tucson FCU believes the drive-thru was the best place to start introducing video technology because of the separation that exists between members and tellers there. She called drive-thru a "heavy" channel where Tucson's members do a lot of their business.

The credit union has seen a small drop in lobby traffic, although many members still come into the branches. "But I'm hoping that we can start to move some of that traffic out of the lobby and into the ITM drive-thrus," she said.

But the technology is not cheap. One industry source said each ITM costs between $80,000 and $100,000, and there may be additional costs for software that allows the machines to interact with the credit union's core processing system. That could add another $15,000 to $25,000 per machine, or more.

Tucson FCU spent two years looking at options and visiting other credit unions around the country. It wanted to be sure it was offering technology that was relevant and that its members would actually use. "Because it's such a huge expense, there's a lot that goes into that," Adams said.

Veridian CU has looked into using interactive teller machines and similar technology in its drive-thrus. But in the meantime, the Waterloo, Iowa-based credit union has installed video feeds at some drive-thrus to connect members with a service representative inside the branch they are visiting.

Mark Koppedryer, senior vice president of retail for Veridian, said in an interview that it is important for members to be able to interact face-to-face with tellers — even if it is through a video screen. In the past, it was hard for drivers in the third and fourth drive-thru lanes from the branch to see the teller window due to the distance. Video technology has bridged that gap.

Veridian operates 30 branches throughout Iowa and eastern Nebraska. At seven of those branches, video technology called Tel-R-View is used to connect members in the drive-thru with a service representative inside. All the current drive-thru video units were installed within the last four years, Koppedryer said. They were included in the initial construction of four branches and added as part of a renovation for another three.

Two Veridian branches under construction and scheduled to open in 2018 will include the same technology, he said.

The decision to implement the technology has been dependent on each branch's layout, Koppedryer said. "At these nine branches, we've found that video technology allows us to increase the stacking of our drive-up lanes and still keep the adjacency of the drive-up staff and interior teller area," he said.

While there is a bit of a learning curve, many members have mentioned that they prefer the video interaction, Koppedryer said.

Tucson FCU's Adams said it takes on average three uses for a member who might initially be hesitant to try the technology to get comfortable with it.

Adams said preparations for such a big change need to be started both internally and externally well before the technology is installed. About 18 months before Tucson FCU went live with ITMs, it starting getting its employees up to speed. "I think the employee buy-in is critical," Adams said.

The credit union also started communicating with members who used the drive-thrus well ahead of implementation to prepare them for the coming changes.

Then, during the initial roll-out, Tucson FCU branch managers and other executives stood in the drive-thru areas every day for the first full week after each branch went live to help members learn to use them. Adams said such a commitment was critical to the program's success.