How do financial institutions maintain their footprint without opening or operating potentially unsustainable branches? This is the question that many FIs are asking themselves as branch closures are up 38% since the start of 2022.1
Like the rest of the marketplace, FIs must deal with rising costs, staff shortages and a potential economic slowdown. To cut costs, FIs face the unwelcome prospect that they, too, might have to shutter some of their retail operations. To stay connected with their customers, in addition to providing digital banking services, many FIs are considering ways to maintain a lighter footprint, especially as demand for cash continues and the impact that branch closers have on rural and lower-income communities remain top of mind.
Brick and Mortar to Digital Tellers
Branch transformation efforts in recent years have shown the value that smarter technologies, including better equipped ATMs and ITMs, provide. But successfully putting these ‘digital tellers’ into the marketplace, without a branch in support, will be the true test of their mettle.
According to RBR, a research firm, the U.S. recently saw an increase in the number of ATMs, reversing declines made in previous years.2 What is more, RBR also found that over one-third of the ATMs installed today now accept automatic note deposits.3
These data points, plus new economic pressures, signal a shift towards a more remote deposit-friendly environment. But the need to protect remote deposits from fraud, for example, will be increasingly important.
Protecting Remote Channels From Fraud
At the frontline, staff are equipped with the experience and the tools that help mitigate deposit risk. Remote channels will need the same intelligence.
For example, FIs will need a deposit fraud mitigation system applied to remote channels that can detect counterfeit, non-sufficient funds, closed account, duplicate and other fraudulent items in real time. To effectively achieve this, their fraud detection system will need to have access to quality, up-to-date fraud data.
Deposit Fraud Mitigation Tools
To more easily integrate a deposit fraud mitigation tool into an ATM or ITM, financial institutions will also likely need to rely on their hardware provider and/or software reseller. These providers are likely to have an existing relationship with a fraud mitigation service, making integration fast and easy. FIs should not discount the value that these services provide.
As FIs increase their reliance on remote deposit channels, strengthening protections will be key. And with better, more capable teller machines, FIs will be able to more confidently balance operating costs, risk and, importantly, relationships.
By Lawrence Reaves, CEO at Advanced Fraud Solutions
Citations:
- S&P Global Market Intelligence, “US bank branch closures increase 38% to new record high in 2021,” Jan. 20, 2022. URL Reference: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-bank-branch-closures-increase-38-to-new-record-high-in-2021-68483121
- RBR London Press Release, May 30, 2022. URL Reference: https://www.rbrlondon.com/wp-content/uploads/2022/05/GA27_Press_Release_300522.pdf
- RBR London Press Release, Oct. 8, 2021. URL Reference: https://www.rbrlondon.com/wp-content/uploads/2021/10/GA26_press_release_081021.pdf
