Technology is pushing banks and credit unions into new territory, including the use of video teller machines. In a legal opinion, the National Credit Union Administration (NCUA) in August ruled that credit unions aren’t prohibited from using the machines, says Mark Harrington, an attorney with Syracuse–based law firm Mackenzie Hughes, LLP. Like any new technology […]
Technology is pushing banks and credit unions into new territory, including the use of video teller machines.
In a legal opinion, the National Credit Union Administration (NCUA) in August ruled that credit unions aren’t prohibited from using the machines, says Mark Harrington, an attorney with Syracuse–based law firm Mackenzie Hughes, LLP. Like any new technology though, credit unions need to consider all the costs involved before jumping in, he says.
Video teller machines are somewhat similar to ATMs, Harrington explains. The machines themselves look like their older counterparts, but have video-conferencing capabilities so customers can talk with and see tellers as they conduct their business.
“You would be speaking with an actual teller of your institution and be able to transact business in the same way as if you did go into a branch and spoke with the same person,” Harrington explains.
And while ATMs are limited to transactions like deposits, withdrawals, and balance checks, video teller machines could handle business that’s a little more complex because of the presence of an actual human on the other end.
“Certainly there’s an element of convenience,” Harrington says of the potential appeal of the machines. “It’s a relatively new technology.”
The machines also offer a cost-effective way for credit unions to add another service facility where they might not be able to otherwise because of cost or space limitations, Harrington adds. It could be a way for institutions to explore new markets as well.
If a credit union placed a video teller machine in a new community and it proved to be popular, the institution might then follow up with a branch.
“That would be a part of the business plan in determining whether it’s a suitable area and if there’s enough traffic there,” Harrington says.
Finding a good location for one of the machines wouldn’t be any more difficult than setting up an ATM, a task most credit unions have completed numerous times, he adds. The machines do cost more and there are more back-office concerns.
A credit union would have to set up specific times that a teller would staff the machine, Harrington notes. An institution might choose to have a teller in an office dealing with in-person customers while staffing the machine at the same time, for example.
“Offering services that way may take some different coordination,” Harrington says.
He notes that most credit unions are highly sensitive about the level of service they provide to members. They would have to be sure they were not ignoring members who come to branches in person in favor of video customers, he says.
In its August decision, NCUA said it would allow video tellers to count as service facilities and satisfy the requirements of credit unions that would like to expand their membership territory or serve underserved areas, according to an article in the Sept. 26 issue of Credit Union Times magazine.
Contact Tampone at ktampone@cnybj.com
