Automated teller machines have become an endemic part of our banking culture. For many people, the only contact they now have with their bank is through an ATM. For bankers, ATMs, along with all of the other customer service channels, have become a necessary cost of serving their customers.
We’re all familiar with the traditional ATM functions: cash withdrawal, transfers, deposits, statements, and the like. These functions automate branch teller activities and are valuable for their speed and the convenience they offer for customers, but to truly unlock the value of an ATM, we must look closer at the user experience and the type of services that could be delivered.
Some strategies to consider include improving customer interaction; integrating ATMs with other customer channels; expanding the ATM transaction set; and taking advantage of location-based services. The industry now has the technology and experience to transform the ATM into a customer-focused channel that offers value-added services, increases customer retention, and improves bank profits.
The Web in general, and online banking specifically, has raised consumer expectations about what is possible when they interact with a bank. For example, virtually any ATM today can read customers’ names off their cards and give the appearance of personalization. However, what today’s consumers expect is actual personalization, as they experience when shopping at Amazon or accessing aggregated banking records online.
The content that an ATM delivers today is usually the same regardless of who is standing in front of the machine. For example, the machine that I normally use has my normal $100 “fast cash” selection three menus deep. In addition, I am always given the option to withdraw from a savings account, even though I have no such account.
This type of noncontextual interaction leads customers to the conclusion that they are neither valued nor understood by their bank. The customer concludes that, since the ATM does not remember the routine transactions that she often uses, every other function must also be generic. The result is lower customer acceptance of customer-specific value-added transactions, even when they are offered.
A small experiment in the United States hints at the potential. A network of ATMs was configured to recognize specific people who fit a credit and demographic profile. When these people used any of the ATMs, they were shown an invitation to apply for a credit card (but only once per person). The response rate was over 20%, far more than the 2% or less typically achieved in direct mail campaigns.
As we can see from this example, it is not the ATM that must change, but the way we think about it and the way we use it. It is an issue of open systems, software, and the interaction of customers not only with an ATM, but also with a bank in general.
Implementation of improved customer interaction initiatives and one-to-one service delivery becomes too expensive if these changes are done on a channel-specific basis. Many banks today are implementing channel integration and customer relationship management strategies around which improved solutions for ATMs and other customer service channels can be built.
Applications used in online banking can have appropriate cross-links into the ATM channel. Electronic bill presentment and payment, account aggregation, and online lending services are commonly configured and utilized in an online environment. In such cases, quick checks or adjustments to the configuration of these services can then be offered at ATMs.
For example, once I have my bill payment sources and schedule established, I might wish to check on the status of payments or adjust the schedule of pending payments at an ATM when I am out of town.
Integration of existing service channels, as well as potential channels such as mobile phones and PDAs, allows a bank to drive content to each appropriate channel and to the customer using that channel in real time. Such integration leads to more opportunities for expanding the transaction set and related revenue streams.
ATMs continue to increase their transaction capabilities. There are increasing options for automating the handling of complex transactions, such as check cashing, bill presentment, money order issuance, ticket printing, and bulk cash recycling. These capabilities expand the suite of services that ATMs can deliver.
The existence of convenience fees for noncustomer use of a bank’s ATMs shows that consumers are more than willing to pay for convenience. They have come to recognize the benefits of having desired transaction capabilities close at hand and are willing to pay for this convenience.
There is a relationship between the increasing capabilities of ATMs to fulfill convenient transactions and the revenue potential of such systems.
