Estimating that 50% to 66% of retail branch transactions involve checks, Alenka Grealish of Boston-based Celent notes two trends that could significantly reduce branch traffic in the near future: the ability to remotely deposit checks and the overall decline in check usage. Grealish’s “Branch Boom: Folly or Forethought" projects the total number of checks handled by the average branch to drop by more than half—from an average of 364 per branch to 178 by 2010.

It’s a theme that’s also been cited by Jerry Chambers, interim CEO of Viewpointe, the check image archive, retrieval, and exchange provider in Charlotte, N.C. “As you start to think about moving capture out to the point of capture, out to merchants, out to remote locations, guess what? That takes checks out of the branches…it’s the commercial deposit that carries a lot of the cost that’s going into the branch network right now. So,” Chambers said at BAI’s TransPay in May, “my concern is that you need to be careful about this direct capture because it’s going to have an economic impact on the branch network. I don’t know if that will be next year or the year after that, but it’s coming pretty soon.”

But reduced reliance on the branch for check-handling may not be a negative, says Paul Citarella, executive vice president, Sales & Marketing for Alogent Corporation, Atlanta-based provider of remote deposit capture and other solutions. “Take a look at who’s coming to your branch with those 200 checks as close as possible to the cutoff time,” Citarella says. “It’s not the business owner, it’s the receptionist, it’s not somebody you can upsell or cross-sell to.” Moving to self-service for check deposits should free branch employees up to concentrate on improving the customer experience, Citarella says.

How popular is the trend to capture checks remotely? In the period from October 2004 and August 2005, Alogent counts 28 remote deposit announcements by the top 100 banks. Watch for “seats installed” to be used by solutions providers as a consistent measure of their deployments of their check capture deployments in branches, ATMs and remote sites.

Celent’s analysis also suggests that there’s a slowing of household deposits into banks. Taken all together, “the fact that check-related transactions will dwindle is not a sufficient basis to pronounce the branch dead, however,” Celent says. “The teller yes, but not the branch.”

Grealish expects tellers to “continue to be needed over the next five years, but says banks must be prepared to transform their role and support it accordingly. Today, she says, “tellers need systems built for user-friendliness and transaction speed.” Celent estimates that teller transactions per US$100 (1998 $) of deposits have fallen by nearly 50% in the past five years, dropping from 45 to 25 transactions. A transition away from transactions and toward customer support and cross-selling is inevitable and will require “more sophisticated” systems, she says.

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