Get smarter – tellers must adapt as Chinese customers embrace digital banking services

3. January 2018.

How do users and tellers cope with the “go smart” banking trend in Shanghai?

For young white-collar worker Ada Shen, it did not take her long to get familiar with the new “intelligent” teller machine at an Industrial and Commercial Bank of China (ICBC) branch in the downtown Jingan district.

The 31-year-old rarely visits bank branches nowadays, and even when she goes, she usually turns to the smart machine first, unless for cash services that must be handled by a human teller.

“It’s really convenient as I can buy foreign currency within minutes by simply following the steps on the machine. There is no need to go to a bank counter to deal with a human teller face-to-face unless I want to take out the money in cash,” she said, noting that there is also a banking staff member around for consulting, including guidance on how to use the machine.

She said the machine has been available since the branch completed a revamp this year, which also trimmed the number of banking counters manned by human tellers to two from three.

“I see less service counters but more machines instead now,” she said.

The branch she visits is one of the Beijing-based bank’s 13,000 branches – more than 80 per cent of its total network in China – that have gone through a go smart revamp.

So far, at least 88.1 million users like Shen have used banking services on the smart machines, which are capable of 200 services, or most non-cash banking needs that span from capital transfers to the purchase of wealth management products.

The machine can save users up to 70 per cent of time spent on average as compared with a human teller, the bank said.

The go smart trend is not limited at ICBC, the country’s largest bank by assets.

In late 2017, China Construction Bank (CCB), the country’s second-largest lender, said it had completed a go smart revamp at all of its 360-plus branches in Shanghai, installing more than 1,600 smart teller machines that boast higher efficiency than human tellers.

The revamp at CCB freed up more than 800 bank tellers in Shanghai. The majority have moved on to new roles such as client relationship managers, which offer more value-added services, the bank said.

China’s big four state-owned banks have not hired more employees since 2016, based on data from their annual reports.

All the big four banks have, in fact, reported a decrease in the total number of employees since last year, although analysts say this could be because of several reasons, including a growing number of retirees, people leaving banks to join internet finance companies and fewer new hires, and not necessarily due to lay-offs.

But one thing is for sure, they said, human tellers have to embark on new roles to generate more value for customers as well as banks at a time when tech-savvy consumers are getting used to being served by machines.

The number of tellers might drop, but there could also be growing demand for client relationship managers to cater to the wealth management need of China’s growing middle class in the coming years
Zhang Xingrong, managing director of BOC Institute of International Finance in Beijing

“Banking employees have to cope with a more challenging time ahead that is triggered by the changing banking behaviour of users and tighter financial regulations,” said He Fei, a senior researcher at the Bank of Communications in Shanghai.

“Those simple redundant roles, especially in big cities where technology is quickly applied, will no doubt be replaced by machines,” he said.

But he also said there would be more vacancies in underdeveloped regions for inclusive financing and those with strong digital capabilities to cope with the shift towards digital.

Zhang Xingrong, managing director of the BOC Institute of International Finance in Beijing, said so far there had not been any large-scale banking lay-offs.

“The number of tellers might drop, but there could also be growing demand for client relationship managers to cater to the wealth management need of China’s growing middle class in the coming years,” he said.

Wendy Hu, a bank teller at a mid-sized lender in Shanghai, has already acted on the changes. The 29-year-old, who used to serve corporate clients only, now also works on weekend shifts and deals with retail and corporate clients as a “comprehensive teller” responding to all types of needs.

“Everyone is talking about the go smart transformation and reform in the industry,” she said. “It’s true that we have to cope with less hands than before. However, it’s unlikely for machines to totally replace humans, at least for now.

“It may happen in a decade’s time and only at banks leading the sector,” said Hu.

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