This document summarizes a presentation on verifying that teller labor costs are under control. It discusses how technological advances have reduced teller transaction volumes by 31.3% over 10 years. Case studies show credit unions reducing labor costs by 40% while increasing teller pay and hours by automating transactions. The top ways to control costs are setting productivity goals, understanding transaction patterns, knowing unit labor costs, optimizing hours, and benchmarking productivity against peers. Financial institutions that implement initiatives to manage teller labor costs can achieve significant savings.

1. Top 5 Ways to Verify Teller
Labor Costs are Under Control
With Special Guest From Arizona Federal Credit Union

2. • Welcome and introductions
• What has changed in the last couple of years?
• Review twenty-year trend charts from 2011 FMSI Teller Line
Study
• A closer look — Arizona Federal Credit Union
• What do we learn from these numbers?
• Next steps
• Open discussion including Q&A session

3. • Gordon A. Williams IV, FMSI SVP
• Kathie Sironen, Arizona Federal Credit Union Sr. Director of
Operations
• W. Michael Scott, FMSI President/CEO
• Chad Davis, FMSI Marketing Manager

4. The combined financial impact of both the Durbin
Amendment and Regulation E Section 205, is forcing
banks and credit unions to turn-over every rock in an
effort to do more with less.
• An often overlooked area to decrease overall
expenses is the reduction of processing levels
on the teller-line.

5. FMSI’s annual teller line study indicates that many technological
changes have led to a 31.3% decrease in teller transaction
volumes over the past 10 years.
• A recent Celent (www.celent.com) survey suggests that FIs
expect approximately 25% of branch transactions to migrate
to self-directed technologies over the next five years.

6. • 82% of general retail banking consumers are willing
to use the Interactive Teller system for some transactions
• Current VTM users have a 90% satisfaction rate
• There was a 40% reduction of labor costs while increasing
teller pay (went from 58 to 27 tellers) and increasing available
teller service hours by 44%
• Above metrics based on uGenius Case Study, where 58 VTMs
were utilized in the same time period – over two years
Video Teller Machine

7. Allows for customers to deposit checks (with smart phones)
without having to step a foot in a branch or use an ATM.
• Chase, PNC, US Bank, and USAA currently offer this service,
along with other major financial institutions like Bank of
America that have this feature in development.
Smart Phone

8. Automates low value cash transactions and drives efficiencies at
the teller line.
NCR Cash
Recycler

9. 60% Decrease since 1970
Ratio of Population to Branches
9,340
5,865
4,908
4,347
3,684
1970 1980 1990 2000 2009
Source: US Bureau of Census, FDIC (Celent)

10. 41.9% Decrease
Figure 3.1

11. 15.2% Decrease
Figure 3.4

12. 76.7% Increase
Figure 3.2

13. 107% Increase
Figure 3.3

14. • Where do you think your productivity is today?
– Above 25 transactions per hour (per teller)
– 20-25 transactions per hour (per teller)
– 15-20 transactions per hour (per teller)
– 10-15 transactions per hour (per teller)
– Less than 10 transactions per hour (per teller)

15. The top 10 clients on FMSI’s Peer-to-Peer Ranking Report
have achieved great results, while not sacrificing service.
Fictitious Institution Names Used for Display Purpose

16. Productivity + Efficiency = Cost Savings
Arizona Federal Credit Union Case Study
Kathie Sironen, Sr. Director of Operations
15 branches, $1,300,000,000 in assets, located in: Arizona
Implemented FMSI Staff Scheduling Software in 2003
Utilize Teller Management Online Scheduler and Reports:
•Productivity: Forecasted Schedules, Individual and Branch Transaction Goals, & Monthly Reports

17. Productivity + Efficiency = Cost Savings
•Efficiency
–Staffing Level Decisions and Cross Functional Positions
–Alignment of Branch Hours
–Upload Schedules from OLS to Time and Attendance System

18. Productivity + Efficiency = Cost Savings
Benchmark Comparison
*Based off of June 2011 data
Productivity Cost Per Pay Rate Average
(TPH) Trans Transaction
Volume per Site
Arizona Federal 25.2 $0.64 $16.01 17,951
Credit Union
TMS 2011 Teller 15.6 $1.00 $15.64 6,837
Industry Study
FMSI Top Ten 22.9 $0.72 $16.52 12,883
(Prod)

19. Productivity + Efficiency = Cost Savings
Arizona Federal Comparison
*Based off of June 2011 data
Productivity Cost Pay Rate Transaction
(TPH) Per Volume
Trans
Arizona Federal 23.2 $0.63 $14.73 426,559
Credit Union
June 2008
Arizona Federal 25.2 $0.64 $16.01 269,260
Credit Union
June 2011

21. • Financial institutions that use a Scheduling and
Performance Management Information System achieve
greater workforce optimization results.
– TMS Top 10 Averages:
• 22.8 TPH
• $0.70 cost per transaction

22. • In the recent past, community banks and credit unions have
had the benefit of high margins to mask operating inefficiencies.
• With today’s reduced revenue environment, these organizations
require a methodical tool to balance service and labor needs.

23. • Make more informed personnel, scheduling, and
branch hours of operation decisions.
• Effectively manage towards better service level needs
of members/customers.

24. • It is now more important than ever for bank and credit union
management to pay closer attention to their staffing levels.
• Labor cost savings associated with a focused and dedicated
workforce optimization program for teller-lines has become
too great to ignore.

25. Top 5 Ways to Verify Teller Labor Costs
are Under Control
1. Set/track teller transaction productivity goals (monthly)
2. Understand your day of week environment, and recruit a
workforce that mirrors this environment
3. Know your unit labor cost, and what this cost should be based on
your unique volumes
4. Ensure your hours of operation are appropriate based on your
transaction environment
5. Compare teller productivity with FMSI industry peer-to-peer
ranking (monthly)

26. Financial institutions that implement an initiative that
helps them validate and manage teller labor costs –
will achieve great indefinite cost savings.

27. FMSI has assisted over 600 financial institutions nationwide
in optimizing their branch networks through applying Actionable
business intelligence from the analysis of transaction data.
– Learn more at www.fmsi.com, or call 770.619.3443