Last week, I mentioned that I recently saw a sign indicating that tellers did not have access to cash at a bank branch in Italy.  While this is most certainly not becoming standard anytime soon, I’m hearing more examples all the time.  One of my previous colleagues, Michael Barrows, pointed out that Pennsylvania State Employees Credit Union (PSECU) also operates a branch in which customers who need cash – whether they’re cashing a check or making a withdrawal – are directed to the ATM by the teller.  Dexia Bank in the Netherlands is in the process of transforming all of their branches to “cashless”.  I talk more specifically about Dexia in a recent BAI Banking Strategies article.

If you haven’t considered the cashless branch before, you may be asking “Why?”, quickly followed by “How?”  I could do entire presentations and research notes on this topic, so I’m probably not going to do these questions justice here.  But let me just hit on some highlights on the “Why” today and the “How” in my next post.

The annual number of transactions processed at a branch remain flat year over year and will probably start decreasing within the next 5 years as check volumes decline and the functions available through online and mobile banking increase.  Even small businesses – a branch transaction mainstay – are moving toward remote deposit capture and better cash management, which will take them out of the branch.  Branches are going to have to become less about the teller line and more about the platform side.  Banks will staff the platform side with experienced sales teams, not good reconcilers.  The more cash you take out of their hands, the more they get to focus on selling.

Another key benefit is the ability to remove the teller counter or any bandit barriers.  Think of anywhere else you shop (and let’s face it, our customers are shopping) where there is a physical barrier between you and the salesperson.  When was the last time you had to stand at a counter to buy a computer?  Or a car?  Or a new pair of shoes?  And why not?  Because the people working at these stores do not have to be protected from someone trying to get to large amounts of cash.

There are lots of reasons for keeping cash in branches – for now.  However that will change in the next 5-7 years.  Are you thinking about it now or will you wait awhile to see what happens?

I have gotten long-winded but I honestly find this topic fascinating.  My next post will address the question of “How”.  In the meantime, I will be speaking at the Fiserv Cash & Logistics Connect Forum this week and welcome any personal discussions about this topic (and many others) if I see you there.