Article
ATMs plug into the Internet
ATMs seem destined to become part of a "Post-PC Movement" chronicled in a recent Newsweek cover story. In the Post-PC world, everything from cell phones to household appliances will connect to the Internet. by Ann All, editor
July 8, 1999
What do you get when you cross an ATM with the Internet? Sounds like the preface to a bad punchline, but ATM manufacturers are taking a long and serious look at what they can do with Internet technology. Interest in online banking and e-commerce activities is growing, while market research indicates that consumers want to conduct new and different types of transactions at the ATM. Sensing a new niche to fill, several major manufacturers are piloting Internet-enabled ATMs. Houston-based Tidel will be the first to market with an Internet-enabled product when it starts shipping its Chameleon this month. Tidel just signed a two-year contract with Cash Technologies to provide up to 2,000 of the machines. Los Angeles-based Cash Tech is using the Chameleon to launch its new EMMA software (see related story in the Information Center). Tidel bills the Chameleon as "the first multimedia kiosk that combines support for the e-commerce options of the Internet with traditional ATM functionality." It may be the first, but others are sure to follow. Japanese manufacturer Omron is preparing to ship an ATM that was jointly developed with Microsoft. The company is talking to several large convenience store chains and banks. The machines initially will be sold only in Japan, but that could change if demand for Internet capabilities grows. "In the future, we are ready to go with this Web line in other markets," said Yukata Fujiwara, Omron president and CEO. Other companies experimenting with Internet-enabled machines include Diebold, NCR, IBM and Fujitsu/ICL. For the past year and a half, a handful of NCR ATMs have been running Web-based applications at Canadian Imperial Bank of Commerce branches. In addition to conducting normal financial transactions, ATM users can browse movie schedules and purchase tickets from the Cineplex Odeon theater chain. The tickets are printed and dispensed at the machine, and the cost is automatically debited from a user's account. Slow but sure One U.S. financial institution is using NCR's Web-enabled ATM, but at a site available only to bank employees. While U.S. banks are holding the bottle, they seem a little apprehensive about releasing the genie. "Everybody's not going blazing guns, even though we know the platform works and the technology works," said Rob Evans, NCR's director of marketing for self-service solutions. "Our customer base is trying to be very deliberate and thoughtful about how they want to use it." Jack Kucler, executive vice president of Key Electronic Services, would like to see a compelling business case before Cleveland-based KeyBank signs on for Internet enabled ATMs. "The technology we can deploy -- that's not the issue. The issue is how best in the context of our delivery system do we utilize it," he said. ICL's financial services division next month will launch a 30-day pilot of Internet technology on 10 Fujitsu ATMs at a major U.S. financial institution. The three-stage pilot is expected to lead to a rollout of 175 Web-enabled ATMs, said Alexis Parker, director of product marketing. The pilot's first stage will ensure that all standard financial transactions work with a new Windows NT operating system. ATM screens will be converted to HTML content in the second stage and, finally, Web-enabled applications will be added. All 175 Web-enabled ATMs will run on Pentium processors. "June can not come soon enough," Parker said, noting that ICL, Fujitsu and the financial institution are all excited about building what she called "the first NT ATM network in the U.S." Agent XFS Web technology is "coming down the track like a locomotive," said Stephen Risto, IBM's product manager of Web ATM software. "We're totally breaking down the paradigms of existing ATMs." The key to delivering open Web-enabled applications is WOSA/XFS, or Windows Open Services Architecture/Extension for Financial Services, a standard that offers flexibility in the heretofore highly proprietary ATM world. That's a mixed blessing for manufacturers; while it clears the way for new and exciting applications, customers will be able to freely mix and match their hardware. "In theory, a bank could have three, four or five ATM vendors," said ICL's Parker. "If all of their machines were WOSA/XFS compliant, they could put one application across the network." One IBM client, the U.K.'s National Westminster Bank, runs the same application on its network of NCR and Diebold machines. "From our point of view, it makes no sense whatsoever to be proprietary to one machine at this stage in the game," Risto said. Developed in Europe, WOSA has been popular there for years. Acceptance in the U.S. has been slow but is about to get a jumpstart with the advent of Internet applications. WOSA will allow banks to leverage the investments they've already made in their online banking programs. "You can take HTML-based development that's already been done, modify it slightly and just plunk it down on an ATM," said NCR's Evans. "Financial institutions have invested so much in making the Web an integral part of their delivery strategy. It only makes sense to integrate it." That appeals to Key's Kucler. "That's an effective use of development dollars," he said. "Instead of developing it twice, we develop it once." In the WOSA world, new features and functions can be added with an ease not possible with proprietary systems. "Once a component is delivered, all of its inherent attributes are protected," ICL's Parker said. "New components are simply added later." Also, Parker said, clients can continue to use OS/2 machines along with newer NT machines in the same network. "We preserve all of the core transactions and everything financial institutions did on their OS/2-based machines. When they upgrade, it's simply a regression test to make sure everything that was working before works on NT." Up close and personal Financial institutions, particularly those with data warehouses, seem intrigued by the opportunities for one-to-one marketing. "The ATM is one of the primary access points for consumers. It's kind of where the rubber meets the road," IBM's Risto said. "It's the perfect place to use data from a warehouse to differentiate and market to consumers." Evans envisions an application that would allow bank customers to pre-define their preferences. So, for example, a customer could access certain stock reports during the "please wait" portion of a transaction. Personalized profiles could give banks a new way to sell ATM services, beyond promising not to surcharge their customers. "Customers might go to a particular bank's ATM because they can get good information there, not because they won't get whacked for a buck and a half," he said. ATM users will notice little difference in their Web-enabled transactions. "The experience the consumer is going to have with it is going to be more akin to an ATM cash withdrawal experience than a Web surfing experience," Risto said. "Instead of getting cash, they'll be buying a ticket or whatever." In fact, Risto added, ATM users may connect to a replica server rather than an actual Web site. And they won't be able to surf freely; they'll only see sites selected by an ATM owner. One challenge lies in figuring out what applications are appropriate for what machines. "This is clearly not something for every single site on the planet," Evans said, noting that a customer who just wants $20 may not appreciate standing in line behind someone checking movie schedules. "This is not a mass distribution item; it's a selected distribution item," Kucler agreed. "I could lose a lot of business with people 'browsing' at the ATM." Beyond the bank While all of the initial pilots involve financial institutions, Internet-enabled ATMs seem sure to capture the attention of forward-minded retailers and ISOs as well. "As soon as they figure out what they can do with all of the Internet companies that are out there, the independents are going to jump in and go," Parker said. "The banks will find themselves going head to head with these guys, trying to get services out there as fast as they can." Risto believes any company with an Internet presence could expand its marketing reach, possibly by forming an alliance with a bank. "If they're already doing business on the 'Net, they could put it on an ATM kiosk and sell their product on a street corner.They expand their access points by making it convenient to anyone using an ATM," he said. "This technology is really an extension of e-business to the self-service ATM/kiosk delivery channel, by dramatically enhancing the thousands of existing customer access points already served by this channel."
Included In This Story
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.
