Although it's only been two years since NCUA approved virtual teller machines as service facilities, the interactive machines have gained a foothold in lobbies and micro-branches.

Now, VTMs, also known as interactive teller machines, are popping up in credit union drive-thrus and over the past two years, a growing number of them are making the shift.

The $1.68 billion Ascend Federal Credit Union in Tullahoma, Tenn., announced the grand opening of three new branches in the Nashville area equipped with virtual drive-thrus from such companies as the Atlanta-based NCR and Diebold in Hamilton, Ohio. One of the virtual teller locations is shown above.

“Research has indicated traditional teller transactions are down, so we wanted a cost-effective way to deliver teller services without impacting the member's personal experience with Ascend,” Kim York, SVP and chief marketing officer of Ascend, said. “The VTMs help us deliver the expected level of service while enhancing the convenience of busy members,”

Each branch is equipped with two NCR VTMs. Members can conduct automated transactions while interacting with member service representatives via video. Touchscreen features allow users to withdraw cash, make deposits, cash checks, and make account payments, transfers and inquiries.

Ascend branded the innovative new service as its Personal Assistance Service System trained four employees to be on-camera representatives and created a PASSport Service Center to house them at its corporate office, York said.

Personality was an important part of selecting the employees to serve as PASSport service representatives, she noted.

Ascend FCU recently unveiled virtual drive-thrus at three new branches in the Nashville area.

“Our goal was to staff the department with individuals whose personalities translate across the channel. And, I believe we achieved that goal because our members have responded so positively,” York explained.

The new VTMs will help the credit union maintain its operational efficiency, ensure new branches become profitable more quickly, and deliver exceptional member service consistently, she added.

“With a growing branch structure, it's often difficult to provide the same level of service regardless of where the member is transacting business,” York said. “Structuring a service center from a corporate location allows better control of the member experience. Centralized staffing presents many opportunities, including expanded service hours. We are considering many options to gain a competitive advantage in the market.”

The architectural design of Ascend's virtual drive-thru experience was overseen by NewGround, a design, build and retail services firm with 100 years of global projects under its belt, according to the St. Louis-based company.

Traditional drive-thrus that rely on pneumatic tubes, which were patented in the 1940s, can create an impersonal member experience, but VTMs can enable credit unions to connect with members and automate cumbersome, time-consuming processes, Kevin Blair, president/CEO of NewGround said.

“VTMs are more expensive than ATMs, but it's a much better experience for the customer,” Blair added.

Read more: How much do VTMs cost?

VTMs range from $50,000 to $80,000 per machine, compared to full-service ATMs that average $30,000 to $50,000 each, he said. When budgeting for pricey new technology such as VTMs, Blair advised cooperatives to plan strategically. Credit unions should take into consideration that future breakthroughs may cause existing channels, equipment and delivery methods to become obsolete, he suggested.

“With technology, there's always the possibility of a leap frog effect, where something new hops in front of everything else,” Blair said. “One of the best examples of this can be seen in the airline industry. Delta invested millions to install self-serve kiosks several years ago only to be leap frogged by mobile check-in, thus, eliminating the need to use the kiosks.”

Despite stiff competition from other channels, ATM usage is expected to increase by 2015, according to the 2014 ATM Market Benchmark Report from Mercator Advisory Group, a Maynard, Mass.-based research firm.

With the increasing popularity of remote banking, VTM usage may decline in coming years, but the current demand for the machines is high enough to warrant consideration, Blair said.

Grow Financial virtual drive-thru The $2 billion Grow Financial Federal Credit Union in Tampa, Fla., recently transformed the drive-thru experience at its main office and eight branches in Florida by installing NCR's APTRA Interactive Teller Machines, shown in the photo at left.

The credit union planned to have 22 ITMs in13 locations in Florida and South Carolina by the end of this year, said Adrienne Drew, marketing communication specialist for Grow Financial.

“With Interactive Teller, we're putting personal service back in our drive through lanes,” Bob Fisher, president/CEO of Grow Financial, said in a press release when the machines launched. “We're replacing decades-old technology with something new, yet familiar, to our members.”

Drew said Grow Financial took the machines for a test drive last fall in select locations.

Through Interactive Teller, Grow Financial members do not need a bank card because they can scan their driver's license, according to the credit union.

Since installing the machines, Grow Financial has utilized the ability to centralize tellers to expand service hours beyond traditional branch hours, Drew said.

“Interactive Teller has enabled the credit union to extend the branch experience in one easy solution by combining video collaboration and remote transaction processing technology embedded within the machine,” she said.

The new technology also will let Grow Financial experiment with smaller footprint branches in select locations, the credit union said.

“Interactive Teller does more than automate bank transactions; the new software-based technology creates a personal touch to banking,” Brian Bailey, vice president of marketing for NCR Financial Services, wrote in an email to CU Times. “It connects people and empowers face-to-face transactions through technology rather than replacing them.”

NCR has Interactive Teller customers around the world, including more than 110 clients, including many credit unions, across North America, according to the company.

Other vendors are also competing in the space. In 2013, the $3.9 billion Mountain America Credit Union in West Jordan, Utah, conducted pilot testing with Diebold machines in drive-thrus. The VTMs can utilize Diebold's Agilis Campaign Office software, to reach out to credit union members with special promotions, the company said.

However, in a Sept. 10 email to CU Times, a Mountain America spokesperson wrote, “We spoke with our branch administration team and they said we're not using any of the Diebold virtual drive-up ATM's or drive-up machines at this time. We have discussed this with Diebold, but have no plans to implement them at this time.”

Instant Insights /

Credit Unions Rev Up Drive-Thrus with Virtual Tellers

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