Article

Four top trends in self-service for banks

Major transformations are changing the face of the self-service channel, giving banks the opportunity to better engage the increasingly techno-savvy customer.

June 19, 2011

This story is excerpted from “Four Top Trends in Self-Service for Banks,” a white paper available for free download after registration.

In addition to performing account-related functions, ATMs serve as a communication channel, providing information on the latest products the bank has to offer. As a result, financial institutions are seeking ways to maximize their investment in self-service and tie the self-service channel into the other channels in which they operate, including the branch, online and via mobile devices.

Those efforts, combined with developments in both hardware and software, are driving a series of transformations in the self-service channel.

Intelligent customer communication

Self-service devices are communicating with customers on a variety of levels, including by demographic grouping, device location and branding, device configuration and device capabilities. That information allows banks to engage with customers on a one-to-one level, personalizing the transaction.

“Today’s customers expect more, not only from the ATM, but from all channels,” said Nick Hames, executive vice president, business development and client services for Phoenix Interactive. Phoenix Interactive, based in London, Ontario, Canada, is a provider of Windows-based multivendor ATM software.

A bank’s communication effort needs to be geared toward a tech-savvy market that includes young savers, small business clients, older demographic clients, people with visual impairments and everyone in between. Each of those consumers requires targeted communication, Hames said.

“Consider the example of 10-year-old Samantha, whose mother has just opened a savings account for her at the local bank,” he said. “Samantha’s goal is to save $200 to buy a new bicycle. If we look at the message that is displayed at the ATM when Samantha inserts her card, she is shown the balance of her account, the cost of the bike and a tracking thermometer that shows how far along she is in her goal. Plus, she would see a more simplified lead-through than what her mother would get.”

Customers also need to be presented with offers that are relevant to their needs. It makes little sense, for example, to offer a home equity line of credit to Samantha, while it would be equally nonsensical to encourage a small business owner to save for that new bike.

It also should be possible for a customer to initiate a transaction on one channel and complete it on another, such as responding to a credit card offer at the ATM and completing the application online.

Streamlined workflow

It’s no longer feasible to spend thousands of dollars and weeks of precious time developing a marketing campaign. In today’s market, content must be developed and deployed rapidly and at a reduced cost.

“The bank brand that everyone has had for years is no longer a static concept,” Hames said. “It is now affected by time of day, location, the device that it is presented on, capabilities, the type of place that it is in and so on. So, if we look next at streamlining our workflow, we need to manage what is becoming an increasingly technical and complex world.”

Thanks to mergers and acquisitions, nearly every large bank in the world operates a multivendor ATM fleet. In addition, banks are engaging in an increasing number of retail partnerships, and in many cases an independent ATM deployer actually owns the machine.

Banks need to be able to manage and deliver content across the network themselves, Hames said, rather than having to wait for a third party to handle those functions.

“It is not a world anymore where you can wait three months to deploy a new marketing campaign,” he said.

The solution is an architecture that delivers rich one-to-one interactions that support all of the following: being location aware, brand aware, device aware, time aware and capability aware, while at the same time doing all of those but reducing complexity for the operations people and the network management people at the bank.

On-demand metrics

Not only can banks deliver targeted information to specific customers, they can gather information about the relative success of the messages they deliver.

“When looking for the return on investment, a bank has to be able to report how successful each one of these campaigns has been, which customers have used it and what success ratio it has had in order to spend for the next one or improve the campaign the next time around,” Hames said.

In addition, banks need desktop reporting tools that can provide information about troubleshooting, management of the network, maintenance of the network or even the levels of cash in each machine.

“Banks need to have the ability to do a real-time site audit that gives them 360-degree information on the desktop, and the ability to drill down to a single ATM or a single device on that ATM,” Hames said. “All of those tools give each one of those stakeholders more strength to manage the network with and measure their business.”

The emerging role of social media in the self-service, banking channels

When discussing social media tools, such as Facebook, Twitter, YouTube or countless others, it is fair to say whatever those applications may be adding to peoples’ lifestyles, the use of social media is growing exponentially.

Cincinnati-based Fifth Third Bancorp., for example, launched a campaign on the video site YouTube to connect with a new audience, increase awareness of its products, increase user interaction with the bank and continue to create brand loyalty. The campaign used humorous videos to target college students.

The results were surprising, said Larry McClanahan, vice president and director of alternative delivery with Fifth Third.

“Initially we reached more than 600,000 viewers,” he said. “While we were targeting the 18- to 24-year-old crowd, we also found we were hitting a different crowd,” he said. “We were hitting people in the 45- to 50-year-old ranges as well. We believe we were hitting that crowd for two reasons: One, the college kids were pushing the videos over to their parents, and two, the parents were pushing the videos to their friends. It’s worked very well for us so far.”

To deliver the benefits which these four trends demand, banks need to understand how to separate hardware and servicing from software selection. In addition, it is critical to find software partners with the products and experience to deliver accurate, timely information with flexibility and scalability.