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Self Service in Retail Banking: Developing and Implementing a Successful Self-service Strategy

By: David Cavell, FCIB

Published: June 2007

  • self serviceThis report provides a practical guide to implementing strategies for self service in retail banking.

Find out how to: achieve effective implementation (including training and incentivising staff and the case for outsourcing), develop your brand using self service, understand the wants and needs of self-service customers (and how different segments respond), discover how self service can influence the overall customer-bank relationship, and identify key compliance and 'access issues'


The current overall situation in self-service banking can be summarised by the following statements:

  • The range of hardware and related functionality exists to take over any routine branch teller transaction, offer extensive service facilities and support increasingly-effective personalised sales tactics.
  • There is much experience and evidence to show that self service can be effective in any retail segment, including small business.
  • This means that it is acceptable to the majority of customers when they are introduced to it with sufficient professionalism, and receive support in accessing the new medium.
  • Much of the development and management of any self-service estate can be outsourced to a growing body of increasingly-competent service companies.
  • Smart suppliers now typically carry more knowledge of self service than most of their clients.
  • Most players in the banking sector should now be making greater use of self service to increase the profitability of their businesses – through both cost and income benefits.
  • Most organisations have neither sufficient understanding nor a well-rounded strategy through which to maximise the benefits of self service.

There are few sources that enable the strategist to build up a composite picture of the state of developments in self service and the opportunities they offer. One objective of this report is to provide an overview of self service and how it can be leveraged to greatest advantage in retail banking.

The other objective is to offer practical advice on how to approach the development of a self-service strategy. This latter objective is met through the framework represented by the proposed ‘ten-point plan’, and the ideas, tools and techniques referred to later in the report.

About the Author

David Cavell FCIB was formerly a member of the General Management team of the highly successful UK Cooperative Bank. David has led or supported a range of strategy and implementation projects, encompassing branch network development, direct banking operations and payment card programme.
He has worked for clients in the UK, Europe, US, the Middle East, Africa and Asia-Pacific regions, including banks, mutuals, finance companies, new entrants and key industry suppliers. He has gained international recognition for his work, including an award for innovation in self service.



Section A: Overview

After a formal overview of the issues, the report proposes a ten-point approach to the development of a well-rounded self-service strategy, aimed at taking maximum advantage of its cost-saving and income-generating functionality. This executive summary starts with the headlines of the ten-point plan.

Self-service refers to any customer-activated terminal in retail banking space.

Strategy development – a practical guide

Section B: The case studies

Large-scale branch-based self service

The German Sparkassen are among the world leaders in the breadth of self-service equipment that they operate. This group of case studies provides valuable insights into their approach to branch design, teller elimination, customer development, self-service offices and other issues.

Self service and the branch – over time

The chapter discussing Barclays Bank illustrates its long-standing commitment to both self service and the development of branch formats. Shinsei Bank has taken full advantage of its recent 21st century launch to build branches that deploy examples of all forms of the latest customer-activated terminals. BT’s Agile Bank research and development commitment is also a recent venture, exploring the value of new and emerging branch-based technologies.

Heavy focus on the ATM

The continuing predominant role of the ATM in North America has been further strengthened by the migration to cheque imaging technology of the US-based banks. The report looks at the developing functionality of CIBC, Bank of America and Wells Fargo, and together they provide a good view of regional best practice.

The Indian market is also placing heavy emphasis on the role of the ATM. The extensive functionality of ICICI Bank underpins a multichannel approach which includes the ATM. Citibank Microfinance is deploying ATMs to provide greater reach, with an emphasis on developing biometric functionality that improves access for the lower market segments it is targeting. A further contrast exists with ING Vysya Bank, which is deploying the machines within a new style of outlet.

The need to reach out to new, unbanked clients within the mass market is a political imperative in South Africa where Absa (the Amalgamated Banks of South Africa) and First National Bank are demonstrating creative and innovative approaches.

The case study covering Nordea, Sampo and First Data International illustrates how – having decided to enter new markets using the ATM as the principal channel – all aspects of purchase, development and operation can be laid off to a service bureau.

Other issues

The integration of the ATM with the payphone booth is reviewed through the approaches taken by ANZ and HSBC, the latest players to trial this form of outlet. The case study covering SpareBank 1 provides a valuable illustration of the effectiveness with which automated depositories can assume the role of the teller and integrate within the branch. The LINK organisation study shows how it has moved beyond its original and core activities as an ATM sharing body to provide valuable support at branch level, among other things.

Section C: The customer

This section concerns itself with a number of issues impacting the availability and accessibility of self-service banking.

Section D: Automating the teller

Research has confirmed that it is now possible to automate every transaction undertaken by the teller. The first chapters in this part of the report provide an overview of the equipment and functionality that makes the foregoing statement possible.

Both the core tasks carried out by tellers and the softer elements of their work are illustrated along with the type of equipment that delivers the required functionality.

Section E: Fraud

The growing menace of self-service fraud – currently largely drawn to the ATM – is discussed in this, the final part of the report. An explanation of the different types of fraud is accompanied by a review of available tactics. A final chapter looks at the growing effectiveness of analytics and scoring as a means of protection and loss reduction.




Chapter 1. A review of self service
Chapter 2. Self-service strategy development – why now?


Chapter 3. Barclays Bank Group, UK
Chapter 4. BT, UK
Chapter 5. The German sparkassen
Chapter 6. Sparkasse sorchheim, Germany
Chapter7. Sparkasse serford, Germany
Chapter 8. KreissparkasseWiedenbrück, Germany
Chapter 9. HSBC, UK
Chapter 10. The Indian market
Chapter 11. ICICI bank, India
Chapter 12. ING Vysya Bank, India
Chapter 13. The LINK group, UK
Chapter 14. Nordea, Sampo and First Data International, Scandinavia
Chapter 15. North America
Chapter 16. North America – three studies in ATM innovation
Chapter 17. Shinsei Bank, Japan
Chapter 18. The South African market
Chapter 19. Absa Bank, South Africa
Chapter 20. First national bank, South Africa
Chapter 21. SpareBank 1, Jevnaker, Norway
Chapter 22. Examples of key self-service developments since the 1990s


Chapter 23.Migration to self service and access for all
Chapter 24. Self-service marketing
Chapter 25. Self service and the prepaid card
Chapter 26. Beyond the branch


Chapter 27. Introduction and the future of cash
28. The core teller transactions
Chapter 29. Teller transactions – added value and relationship development
Chapter 30. The analysis and migration of teller transactions
Chapter 31. The automated depository – the business case
Chapter 32. Outsourced self-service management



Chapter 33. ATM fraud techniques
Chapter 34. Key issues and opportunities
Chapter 35. Analytics and scoring in ATM fraud prevention

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