Banking sector

Walker (2017) claims that the banking business is becoming obsolete as a result of recent technological advancements in money transfer and other financial services. Today, most clients prefer to perform their banking needs via mobile or the internet, resulting in a drop in demand for the traditional banking system. Furthermore, because most banks increasingly rely on modern technology to provide their customers with a unique banking experience through mobile and internet banking, this paradigm shift in the banking sector has diminished face-to-face connection between bank tellers and consumers.Informa Business Systems Inc. (2014), states that the self-serve coin centers have the potential to deliver convenience to customers since they provide an easy way for them to deposit their bulky silver coins without waiting in the banking hall. As well, Informa Business Systems reveals that 80 % of American households save their loose change from their purchases and rely on the financial institutions to count them which takes both time and effort hence reducing the efficiency of banking processes. However, since the introduction of the self-service centers, customers can easily deposit their loose change at the bank's branches at any time hence improving efficiency and revolutionizing customer experience.
Due to the operational efficiency achieved through the use of coin centers Cummins (2012) states that this has enabled banking institutions to lower the costs of operations and this has played a vital role in increasing their profit margins. As well, Cummins observes that since the customers take do not line up waiting to be served, this technology improves the customer's satisfaction and experience. Another significant contributor to customer's satisfaction regard self-service coin centers is that they can deposit their coins at any time, unlike the traditional banking system where they had to observe banking hours. Though the initial outlay for installing and operationalizing this proposal would be significant, the benefits reaped from the self-service coin machines would surpass the costs and hence boost the company's competitiveness in the financial services industry.

Introduction

According to United States Mint website, it is practically impossible for customers to avoid loose change since every time they conduct a purchase, they get some loose change, and with time, it builds up into massive coin collections prompting the customers to explore ways to get rid of them (2017). Besides, many people accumulate loose change in fear that they may be stranded at shopping malls and retail stores as they wait for change which is usually scarce. Hence it is not unlikely to find a person who has accumulated coins that are sufficient to fill a jar, and they would be very guarded against converting them into higher denominations. However, as time goes by, the loose change turn into a nuisance since it is challenging for customers to move around with it as they conduct their daily activities. Besides, the irritating silvery smell of loose change is not appealing to many and therefore prefer depositing them in a bank.
In an attempt to solve the problems highlighted above, Weaks (2013) proposed that using coin centers would automate separation and counting of loose change hence reduce the time customers spend at the banking halls as well as save them m energy of carrying the bulky metallic load. In his suggestion, Weaks goes ahead to argue that this would attract more customers due an improved user experience and therefore translate into real benefits for the banking institution such as increased share value and improved credit rating due to high-profit margins. Besides, coin centers are likely to have a speedy adoption by the market segment since they are used to modern banking technologies such as internet banking.

Previous approaches

It is imperative to delve into the mechanisms and ways in which customers and the banking companies used to handle loose change before the advent of coin centers. Financial institutions would assist their customers who had some currency that they wanted to exchange deposit in the form of loose money. However, not all institutions were open to this approach, and some were very specific about the type of currencies they accepted for exchange hence at times, customers would be left stranded in banking halls. This was because customers were required to roll the coins one by one before they were accepted and the coin wrappers were requisite for this activity, and their absence would lead clients to be turned away. Though some banks were willing to provide wrappers, they would significantly increase the bank's cost of operations. According to Weaks (2013) customers who undergo a negative experience in the banking, halls are unlikely to become loyal customers since they get a perception that the bank does not value them. The banks required the customers to sort out the coins in similar denominations, and this created an ample room for making numerous mathematical mistakes since customers would end up mixing loose change of various denominations. Also, the customers used to experience a lot of physical agonies as they moved through the line waiting to be served. Therefore, banks used to lose customers as a result of the way they treated customers who approached them with the intention of depositing loose change. As well, most staff at the commercial banks were usually demotivated since counting coins used to take a lot of mental energy hence reducing their effectiveness at the workplace. Hence the traditional way of handling loose in banks resulted in a negative experience for both the customers and the employees (Moore & Pennisi, 2016).
Furthermore, the whole process of banking loose change was too procedural, and according to Moore, & Pennisi (2016), customers are dissatisfied with complex procedures. This is because the perceived ease of use determines a person's intention to use a banking system or process and if a customer perceives a banking process to take a lot of mental or physical effort, they are likely to avoid it for as long as they can. In the case of the traditional method of handling coins in banks, any discrepancy during the process caused the teller to start the process all over again hence consuming time and culminating into a disgruntled customer who was not likely to visit the institution any time soon. This would also lead to a negative experience for other customers in the queue since they would be forced to wait longer than they had anticipated. Cummins (2009), noted that financial institutions which run the risk of error allow customers to turn in loose or change. He added that it is easy to miscount or roll the coin twice while handling large amounts. This is a problem that has been resolved with the introduction of self-service centers in the banking sector.
The Coinstar coin self-service center is another similar service available to customers, and it is found in retail and grocery stores in the United States. This mechanism was first introduced to the public in 1992 in San Francisco with only four locations (Advameg, 2017). Customers have the convenience of cashing in their loose change at a fee in a Coinstar kiosk. In a research carried out, by Informa Business Systems in 2017, 10% fee is charged to customers by most Coinstar kiosks while turning their loose change. Besides, the centers give customers the option of converting the loose change into cash vouchers and therefore avoid the fee payable for the conversion. Corporations like Starbucks and Amazon are sometimes included by these retailers to increase the reach and level of usage of this technology. The customer must present a voucher at the store to cash in if the customer chooses to accept the fee and when they are finished with their transaction. Therefore, out of temptation and convenience, customers are more likely to engage in impulse buying (Shah, 2012).

Findings and solutions

From the analysis above, face to face interactions have been outpaced by the recent technological advancements as more people prefer conducting business using online platforms. This has prompted the commercial banks to digitize their products through the provision of online banking services using mobile and internet banking as well as automating processes in the banking halls. These changes have greatly reduced the number of people who visit a bank since customers can perform transactions from remote locations (Informal Business Systems Inc., 2014). The biggest beneficiary of these changes are the customers since they have a wide range of portfolio products and also, the increased competition between banking institutions has lowered bank's charges to the benefit of the customer(Shah,2012). As well, the time taken to transact business has greatly reduced hence yielding positive experience for all the stakeholders involved in the banking services delivery. Besides, banks have also reaped from these developments since they have witnessed a positive growth in their clientele.
Weaks (2009) stresses that customers expect the companies in the financial services industry to be of help when it comes to cashing in loose change. The firms that provide a self-service coin kiosk experience improved relationship with customers and foot traffic. The introduction of the self-service coin centers is convenient because it relieves customers the hassle of rolling their coins. This happens because the customers would be depositing their loose change with their banker. Weaks further states that a 64% of people who can save coins change them for cash in a bank or firm which offers positive experience during this process (2009).
The banks reap several benefits from adding self-service coin centers in their service delivery system which include increasing foot traffic, promoting efficiency of the teller and fostering customer relationships (Informa Business Systems Inc., 2014). Customers will prefer using their approved commercial bank if presented with option of using the free self-service kiosk. According to Shah (2012), commercial banks that provide free self-service coin centers report that 90% of their customers redeem their spare change on a frequent basis. With the tool, customers are relieved from waiting in long lines waiting to unload the heavy buckets of rolled coins. The device culminates to a better overall banking experience for customers because even the time is spared with the use of this technology, unlike the long lines. With the use of self-service coin centers, new customers are attracted since it doesn't involve paying large amounts of money. The coin-counting kiosks are capable of attracting more customers while also creating meaningful opportunities for the existing customers (Cummins, 2017).

Two commercial banks located in Germany were lauded in December 2016 for setting up their first self-service coin centers. The two companies have a high customer turnover since they are located on military installations. Therefore, the area experiences constant movement of military families every three to four years and they usually find this technology time saving and convenient. These households collect both U.S and Euro loose change, and before the advent of the coin centers, they used to queue for long hours waiting for bank tellers to count their money. This would result in a negative experience for both the customer and the service attendant. The two-self-service loose change centers that were provided at the branches do not provide free service, so both account holding and non-account holding customers are each charged 5%. The customers are comfortable and prefer the charge rather than enduring the pain of carrying the heavy load while moving along a slow queue in a banking hall. One of the Germany banks has reduced operational costs by avoiding expenses related to purchasing the U.S and Euro coin wrappers. Through this, the bank has seen a tremendous increase in customer satisfaction and the accuracy of tellers since they are more motivated and experience less mental fatigue (Cummins Allison, 2012). The daily usage of the coin centers is high as an illustration that customers have welcomed the move.
Apart from the Germany banks, there are other institutions have received credit for the use of the self-service loose change centers. For instance, Maps Credit Union decided to invest in the Cummins Allison Money Machine 2 to reduce customer's waiting time. The company started by pacing three of these machines in three of their branches to ease work. The company was able to get more tellers to assist in matching up the human resource requirement for optimal operations of the coin kiosks. "When the company invested the Cummins Allison coin machines, technology, and other processes were improved in the three branches that they invested the tools. The company achieved their goal of the reducing waiting times and improved customer satisfaction" (Cummins Allison, 2017). This illustrates that adoption of this new technology in the banking sector leads to numerous benefits for all the stakeholders in the banking sector including the community. An example of how the community benefited was when one of the local schools hosted a penny drive to improve a children's hospital. With the speed of the coin center, students conveniently dumped loose change that went straight into the machine and quickly receiving their totals compared to the previous way of dropping the coins and waiting on the teller's response after counting (Moore, & Pennisi, 2016).
The initial outlay for acquiring and operationalizing the self-service coin kiosk is significantly high but the long-term benefits of increasing company's revenues and revolutionizing customer experience are worth the investment. Besides, it gives commercial banks operational flexibility since they can decide whether to charge customers a fee or not or only to non-account holders. The only way to make up for initial cost is if the financial institutions charge fees or increase the number of customers using the service hence increase the profit margins. Financial institutions should place the self-service coin kiosks in strategic locations make its accessibility by customers easy and convenient. One such location is next to the banking hall so that customers carrying their coins for deposit can easily identify them n. Shah (2012) suggests the placing of the kiosks in the lobby or at the entrance since when it is within the customer's vicinity, they are more likely to be interested in understanding how it operates.

Conclusion

Credit unions and Commercial banks are increasingly becoming outdated in today's advancing society. Therefore, there is a need for them to devise strategies of increasing available customer service operations. With the rising number of customers looking for techniques to increase their savings, the use of the self-service coin machine is helpful, fast and convenient for both the banker and the customer. For customers to increase their savings, they need to make more use of the self-service coin machines by frequently cashing in their coins. On their side, commercial banks should reduce the customer's waiting time and improve convenience hence give their customer's unrivaled user experience.

References

Advameg, Inc. (2017). Coinstar Inc. - Company Profile, Information, Business Description, History, Background Information on Coinstar, Inc. Retrieved from http://www.referenceforbusiness.com/history2/2/Coinstar-Inc.html
Cummins Allison. (2012). Maximize Teller Efficiency. Retrieved June 21, 2017 from http://www.cumminsallison.com/us/en/case-study-testimonials/self-service-coin-counters
Informa Business Systems Inc. (2014). White Paper, you can count a penny earned when you hold on to it. Retrieved June 26, 2017, from http://www.informabusiness.com/wp-content/uploads/2015/11/SelfServiceCoin-Counter.pdf
Moore, C. &Pennisi, A. (2016). Maps Credit Union Adds Cummins Allison Self-Service Coin Machine to Reduce Wait Times. Retrieved June 26, 2017, from http://www.businesswire.com/news/home/20160601006278/en/Maps-Credit-Union-Adds-Cummins-Allison-Self-Service
Shah, R. (2012). How Coinstar gets away with not charging a transaction fee. Retrieved June 26, 2017, from http://www.gettingmoreawesome.com/2012/03/06/how-coinstar-gets-away-with-not-charging-a-transaction-fee/
United States Mint. (2017) Coin Production. Retrieved June 21, 2017, from https://www.usmint.gov/learn/history/coin-production
Walker, G. (2017). Financial Technology Law - A New Beginning and a New Future. International Lawyer, 50(1), 137-215.
Weaks, J. (2013). Making the case for self-service coin counters. Retrieved June 26, 2017, from https://www.kioskmarketplace.com/articles/making-the-case-for-self-service-coin-counters/