In 2012, Northwest Bank was changing and changing quickly. Two branches were being completely remodeled and another branch was closing its doors. The bank had also just agreed to purchase an additional seven branches from Bank of America and Liberty Bank. All in all, 2012 was definitely a year of change and the perfect time to review bank processes.
A brief corporate snapshot: Founded in 1984, Northwest Bank is a family-owned community bank with over twenty locations scattered throughout Iowa and Nebraska. It maintains a close connection to the community and are committed to supporting customers by exceeding expectations. Northwest Bank believes in making investments in the farmers, business owners, workers, professionals, students, homeowners and retirees that are its customers.
Provide a Better Customer Experience While Saving the Branch Money.
Late in 2012, Dan Hassman, EVP and Regional President at Northwest Bank, approached Arca with questions about cash automation at the branch level. He was primarily concerned with understanding the state of the existing branch system and identifying areas where cash automation would enhance the customer experience while generating cost savings.
“We were looking for efficiency gains and the ability to incorporate more of a sales culture in our banks,” Hassman said. “Cash automation offered both, resulting in our ability to hire and train more sales-oriented customer service representatives (CSRs), who could concentrate more on client interaction and less on the technical side of teller work.”
“I had five or six tellers doing two to three vault trips per day. It was insane.”
Danielle Doran, Head Teller
Shortly after the initial conversation with Hassman, an Arca project director visited two Northwest Bank locations to take an in-depth look at branch operations. The project director’s follow-up report found that by adding cash automation technology to the branches, Hassman would be able to decrease teller trips to the vault, increase cross-selling opportunities, and reduce staffing expenditures.
In May 2013, Northwest Bank moved forward and installed a total of four Arca CM18 cash recyclers at two locations.
Using Cash Automation to Achieve Goals.
One year after the original consultation with Hassman, a team from Arca visited rural Iowa to check in on Northwest Bank. This follow up wasn’t purely a social visit. There were four main goals:
- Quantify the impact of cash recycler implementation on branch operations at the Spencer and Arnolds Park branches.
- Compare and measure changes in branch efficiency.
- Document results for internal analysis and assessment.
- Provide specific recommendations and suggestions to increase branch efficiency and operational effectiveness.
One Happy Executive, a Bunch of Smiling Tellers and Two Profitable, Efficient Branches
After spending the day interviewing bank employees at all levels, a theme emerged: everyone was happy. The executives had seen an increase in revenue and profitability, while the tellers were finding their work easier and less stressful. The branches saw improvements in staffing efficiency and increases in cross-selling revenue opportunities. Although less quantifiable, there was ample anecdotal evidence from bank staff members that the customer base was happier.
In automating cash processes and installing cash recyclers, management sought to increase branch efficiency and reduce labor costs. At the Spencer branch location, we saw a 21% reduction in staffing expenditures while experiencing a 20% increase in customer volume. The Arnold’s Park location had similar results and was able to reduce labor costs by 25%.
Installing cash recyclers was only the first step. Northwest Bank also worked hard to change conventional banking processes. Cash drawers were removed. The recycler made the traditional teller drawer system obsolete. This new system reduced the time and stress of opening, closing and balancing a teller station.
Additionally, tellers had to change behaviors that had once been standard practice. No longer did they spend time double- or triple- counting cash, facing and orienting bills, or making trips to the vault. The machine handled it. Tellers were now able to spend more time talking with customers. There was a dramatic decrease in vault activity (80%) and tellers were no longer disrupting daily work to do buy and sells. The decrease in vault activity directly affected Northwest Bank’s head teller Danielle Doran.
“I was constantly back at a little station counting money, because [the tellers] had to count it when it came out of their drawer, strap it, stamp, initial, then give it to me,” said Doran. “Then I would have to re-count that before I put it in the vault. So it was very inefficient. I spent a lot of time back at the counter re-counting and re-verifying their money, and also getting their cash.”
“The machines have helped create the atmosphere for deepening our customer relationships by allowing the CSRs more time to have those conversations.”
Danielle Doran, Head Teller
By eliminating multiple vault trips and no longer double-counting money to the customer, tellers were now able to try to increase the number of value conversations with customers.
“The machines allow the CSRs more time to talk to the customers because we don’t have to take the time to count the cash,” Doran said. “The time we would have spent counting a deposit or withdrawal is now our time to have a valuable conversation with the customer.”
Since installing the Arca cash recyclers, Northwest Bank has reached many of its original goals. The bank has reduced staffing requirements, improved the customer branch experience, and is seeing improvements on cross-selling efforts.
Bottom line: For Dan Hassman, Danielle Doran and the rest of Northwest Bank’s staff, Arca helps them live true to their motto, a “commitment you can bank on.”