Article

Getting personal at the ATM

While the ATM is a highly efficient and convenient delivery channel, it doesn't elicit a lot of warm-and-fuzzy reactions from users. But that could change. ATM users enjoy more personalized transactions, according to a consumer research firm and several FIs offering them.

July 5, 2004

A recent survey conducted by Synergistics Research asked consumers the primary reason they don't use ATMs. The top reason, cited by 64 percent of respondents, was that they preferred to use tellers.

That preference is at least partially driven by a "desire for a more personal interaction," said William McCracken, chief executive of Atlanta-based Synergistics.  In the quest for convenience, financial institutions often overlook  an important human need, he said.

That fact may become increasingly important as debit card usage continues to displace ATM transactions.

Slowing the debit displacement

Noting that debit volumes grew 271 percent between 1997 and 2003 while ATM volumes dropped 1.5 percent during the same period, McCracken said, "ATMs are not going to win back debit users with cash withdrawal. It's going to be an issue of what services the ATM can offer that debit cannot."

More than 40 percent liked the idea of an automatic list of the previous five transactions and a pre-selected withdrawal amount. More than 30 percent expressed interest in alerts of CDs about to expire and loan payments due.

"People want to feel like individuals," McCracken said. "Debit cannot address that, but ATMs can."

Taking it personally

At least a few large financial institutions, including Bank of America and Wells Fargo, are experimenting with offering their customers a more personalized ATM experience.

BofA has offered the option of selecting a preferred withdrawal amount since 2002. The feature is currently offered at 2,700 of its Windows-based, "advanced technology" ATMs and the number continues to grow, said company spokesperson Angela Ashley. Some 400,000 BofA customers use the feature.

Wells Fargo has given its customers the options of selecting a "fast cash" or preferred withdrawal amount, as well as whether or not they want a receipt, for about a year. "Customers are finding the feature and using it. We're pleased with the result," said Jonathan Velline, the bank's senior vice president of ATM Banking, though he did not say how many customers used the option.

Usage has increased despite the fact that Wells Fargo has not yet begun promoting the feature much; customers find it by selecting an option called "more choices," Velline said.

"Our customers use our ATMs as much as our tellers, so we try to make it the best possible experience for them," Velline said, noting that the two personalization options currently offered help speed cash withdrawals, which account for some 60 percent of all Wells Fargo transactions.

The feature, which Wells Fargo calls MyATM preferences, is available on more than 5,300 Wells Fargo machines and will be added to the remainder of the bank's network as it continues to roll out Windows-based machines, which it calls WebATMs, Velline said.

Personalization options are stored at the host and updated in real time if an ATM user opts to make changes, Velline said. ATMs are connected to the host via a TCP/IP network.

Velline said the more flexible Windows platform makes it easier for ATM operators to trial personalization and other new services. "It's easier to test concepts. You don't need to make a huge upfront investment in time or money."

Platform for personalization

Personalization will become more common as more FIs move to Windows-based ATMs and TCP/IP communications, predicted Steve Risto, director of NCR's APTRA Software Center of Expertise. To facilitate the process, NCR and other vendors are offering remote content management capabilities in their latest versions of ATM software.

"Many of the major financial institutions are showing interest in bringing personalization to a channel that has been dry and impersonal up until now," Risto said.

The next step, Risto said, is to make the entire transaction process more targeted, "so you're not just storing information, but you're having the ATM make more intelligent decisions."

Ultimately, Risto said, some FIs will integrate their ATMs and make them part of an overall enterprise management strategy. "With the Windows infrastructure, the fundamental capability is there to migrate information from one channel to another. That's where the more progressive financial institutions are trying to get to."

Star Systems, which is owned by First Data Corporation, in April introduced a remote content management service, which it said facilitates offering personalized ATM transactions.

Kevin Carroll, director of ATM Product Management for First Data's Debit Services group, said the new service also allows ATM operators to customize other content and graphics, install software upgrades or patches, distribute audio files and re-boot or shut down machines remotely.

It's all done via a central server that Star clients can access via an interface called Star Station, Carroll said.

According to Star research, based on an average dispatch cost of $250, annual costs currently total nearly $6,500, per ATM, to dispatch technicians on a semi-monthly basis for such services as loading graphics and security patches.

"With numbers like that, you can obviously save a lot of money by minimizing trips to the ATM. No one can make a blanket statement that you'll never have to visit an ATM again, but you won't have to do it nearly as often," Carroll said.

Carroll said there is a growing need for such remote management services as Windows-based ATMs become more prevalent. The Star service, which incorporates software from Computer Associates International (CA), is designed for compatibility with Windows-based machines made by any ATM manufacturer.

PNC Bank beta tested the new service for Star at some 200 of its ATMs in Thornton's and Wawa convenience stores. "(It) has allowed us to make much better use of our ATMs as tools to communicate with customers," said James Walker, PNC's senior vice president of Self-Service Banking. "Being able to change messages on-demand gives us incredible flexibility to make them as valuable as possible."

Carroll said the service will be ready for delivery in August.

ATM operators that drive their own machines may want to experiment with the content management systems they are using for other channels, Carroll said. "If you use CA, try CA. If you use Tivoli, try Tivoli," he said, mentioning two well-known vendors. "You're not just limited to proprietary software anymore."

The move to Windows will allow all FIs to enhance their ATM offerings, through personalization and other new services, said Wells Fargo's Velline. "I think now you're going to see more activity around all of these ideas we've been talking about. I think customers will begin to demand more services from their financial institutions, and the service offerings will improve."