A necessary evil? I don't think so.

A necessary evil? I don't think so.
Tags: Advertising / CRM, Retail / Off-Premises
January 9, 2012

I really enjoyed reading the responses to my last post. There was some agreement with my observations, particularly as they applied to the role ATMs play in emerging markets, but less than rousing enthusiasm for the observations applying just as readily in the developed world. Although, one responder did acknowledge that with the arrival of direct deposit of checks via ATMs they was once again a bona fide ATM adherent, if just on the basis of this feature.

Sitting outside of my hotel room in Key West, Florida, last week I did respond to the comments but in the poor light, there were a number of typos, but I trust you let that slide. But as anyone active in the blogosphere can attest to, it's always encouraging to see others prepared to enter the debate – no matter the subject matter. So again, I am keeping my fingers crossed for even more feedback as I continue to pass on my further observations.

And what a good place to start. Yes, in Key West there were ATMs supported by the major banks, and I took advantage of them on a couple of occasions. But more prevalent were the no-label (white-label) ATMs distributed liberally among the many stores fronting Key West's famous Duvall Street. There wasn't a taste in fashion, eatery or entertainment that didn't have someone's ATM readily in view – there was no excuse for not being able to buy that one last beer despite the lateness of the hour. In fact, the adult entertainment club nearby sported one inside – I know since they advertised it on their discretely covered windows.

ATMs – a necessary evil or what? Yes, I was surprised when among the ATMs I came across, one from Wells Fargo, did away with dispensing $20 notes, so typical of the service provided by most banks, and instead dispensed $50 notes. Yes, I have seen some no-label casino ATMs dispensing $100 banknotes, and I fully understand the logic of that as I wonder off to a gaming table to cash it in on chips – but in Key West? Whether a necessary evil or not, there was definitely a considerable asset simply lying within the ATM's cash cartridges and likely drawing additional attention from the bank's asset management solutions.

However, I think that there is more to be considered than thinking about ATMs as a necessary evil - even when their placement may have some among us thinking that their locations are within dens of iniquity. Anytime a business enjoys a dialogue with its customers, there's value—no matter how simple the transaction. After all, for many financial institutions, a laptop and an ATM card are becoming the only points of interaction these days.

So much of what makes up the American economy remains tied to cash. The biggest line inside my local supermarket was in front of Western Union. It was the holiday season, and cash was being forwarded to many family members as best as I could tell. No, cash isn't going to lose its fan base anytime soon, and we are going to be dealing with it for many decades to come. And it's just going to get costlier in the process, of that I have no doubts.

So wherein lays the value? Whenever a customer stands in front of an ATM pulling out cash, we have a captive audience, so do we perceive our network of ATMs as just another channel providing basic services, or do we consider every access of an ATM by any customer as an opportunity to capture "customer insight"? By the very location, are we not only seeing patterns pertaining to an individual but also to a local community? If everyone is taking $50 out every Tuesday night, shouldn't we be aware that the local church bingo game is about to start, and shouldn't we complement the cash being provided with potential product offerings tailored to a community happily playing bingo?

At a time when we are paying so much for just the basic market intelligence, isn't there far more that we can deduce from each and every transaction? Just how well integrated with the rest of our business operations is the fact that someone withdrew $50, as did several others within a fixed (and predictable) window in time?

The example above may be a poor one, but patterns and the intelligence that they can provide are extremely important, and the more I talk to users, the less assured I am that FIs are taking as much information from every ATM transaction as they could.

No, ATMs are not a necessary evil, but rather another very critical set of eyes watching over our community of users. And let's appreciate the investments we have made in our ATM networks accordingly. Who knows, we just may be the first to seize on an opportunity that is walking past our competition every day.