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ATM innovation: Give the people what they want

Sounds simple enough, but what do people want?

November 14, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Last week at BAI Retail Delivery in Denver, ATM Marketplace had the opportunity to sit down with an industry provider whose job is to figure out what consumers really want from financial services — and then figure out how to deliver it.

In a conversation that touched on nine of the industry's most-talked-about topics du jour, Diebold Inc. Executive Vice President and Chief Innovation Officer Frank Natoli spoke at length about the consumer (and FI) expectations and pain points that inform the development of customer-facing technologies at Diebold. Following are excerpts from that conversation.

Consumer power

Over the past couple of years we've really done some in-depth consumer research. Not just about self-service, but we've asked, "What do you want in banking? What do you like? What do you dislike? What do you want to have that experience be like? …

And while it was answered in a lot of ways, what it distills back down to is this thought of control. People want to be in control of their finances, they want to be in control of their financial life.

Friction

Any system, any process that stands on its own, that requires you to transfer information you know, or get it from another channel — all those things are friction. Additional steps are friction, memorizing things are friction, having to carry additional items — all of those are friction.

As we try to innovate, we have to be conscious of the fact that we're dealing with people's secure financial information. This is so important that our industry has, at times, been slower to adopt innovation than the broader retail markets.

And that gives us a lag between what consumers experience in other facets of their life and what we're able to provide in the financial sector.

Big data

It's one thing if my web browser knows what I've been doing … but if I'm on a financial network with sensitive data, and now it feels like it knows a little too much about me, it can feel a little intrusive.

At the same time in the bank environment, one of the reasons smaller community banks and so forth still thrive so well is you walk in and they say hi, they greet you by name, [ask you] what's going on ...

So now we start to think about how we get perceptive that way in self-service. It can start out with very simple things. Very simple algorithms that are smart enough to understand what you normally do.

The future of the ATM

If you're talking about a traditionally deployed ATM, a branch solution, a kiosk — I think we're going to see, first of all, the number of transactions you can do grow; I think you're going to see two-way video to bring experts to you grow; I think we're going to see the use of that channel to generate revenue, and bring additional products and services to people grow …

[C]ash in circulation and the percentage of transactions conducted in cash — we're not going to see a total number of cash transactions decline. What we're going to see is more and more micro-transactions that are digital.

So while we might see — and estimates vary — flat to five, six, seven percent growth in cash transactions, we're seeing electronic transactions growing from 10 to 30 to 40 percent over the next five years or so.

Branch transformation

When you look at some of the larger banks that have massive branch footprints — and especially when they have them in expensive areas — you're going to see some downsizing, you're going to see some emphasis on cost to serve their customers …

I do think it's also correct — and in emerging markets for sure — that where you see banks that do not currently have a widely distributed footprint, [they're] absolutely going to go after this as a way to put in a very small-footprint, very low-cost physical presence to serve people.

Millennials

[W]e're seeing some Millennials actually prefer to go outside the bank for their financial services. They know that they're going to pay so much per transaction but that's better than having a floating balance that's maybe $50 maybe $100 or whatever, and then getting hit with a surprise fee for an overdraft.

It's this idea again of control, or being able to give them a transparent set of services … so that you're informing them of what a fee may be.

Then we start being perceptive: "We've looked at your financial transactions, this particular account or service might be better for you."

I think this idea of allowing people [control], but informing them what their use of the transactions and services may mean in terms of the best choices for them, then helping to guide them to an informed choice — this may be the strongest trend of all and may be the least met.

Biometrics

If you look at what Apple has done now with the fingerprint to the device, to me that starts off a pattern. I'm first going to be most comfortable with authenticating myself to my private device that I own.

The next phase might be that I'm going to use [a fingerprint] to unlock my device to interact proactively with the broader network.

At some point that may be prevalent enough where people are now willing to say, "OK, I'll use a community-based device." That last hurdle will more than likely be the largest one.

EMV vs. QR

EMV has the benefit of having been deployed and having had a lot of success in Europe. There's known infrastructure, known technology, known standards and there is a developed, published and agreed-upon timeline. I don't see that being derailed.

It's the balance of what is theoretically the best way to do something and what is efficiently executable. How much advantage do we get by that which we know how to execute vs. that which would be theoretically better?

And if [EMV is] going to cut fraud — which it's been proven to do by a major percentage — and it gets the alignment and the onus on the right parties in making sure that the right security measures are in place, and it's executable, that's going to happen.

Pace of innovation

It does feel slow … There's a lot of reasons for that, I understand. If I'm a bank, I'm spending 40 percent or more of my IT budget on compliance, and with new regulations coming out, I'm really going to have to pick and choose.

And then there are the infrastructure-wide standards. To me, ultimately, that's going to be the reason for another technology moving very slowly or not being adopted — which is NFC.

There's so many different ways to deploy it. There's so many different encryption methodologies.

I think that's why we've seen the popularity of the QR code, because every smartphone has a display, every self-service device has a display, every smartphone has a camera. Without changing much of the infrastructure at all you can deploy that technology like that [snaps fingers].

Read more about ATM innovation.

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.

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Diebold Nixdorf

As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.

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