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Industry experts see connection between ATMs and mobile phones

ATMs and mobile phones shouldn't be two ships passing in the night.

November 30, 2010

ATMs and mobile phones shouldn't be two ships passing in the night. In fact, if ATMs and mobile phones connect, they could create another channel for banks to reach customers, said Nick Hames, executive vice president of business development and client services at Phoenix Interactive Design Inc., which is based in London, Ontario, Canada.

Financial institutions can use their network of ATMs to make offers, such as low-interest home and auto loans, to qualified cardholders, Hames said. 

If the cardholder expresses interest in the offer at the ATM, the financial institution would send an email to the cardholder's mobile phone. Banks store in their databases cardholders' cell phone numbers and email addresses, he added. The financial institutions routinely store the data for customers who bank online.

The email would direct the cardholder to the nearest bank branch so he or she could meet with a bank officer, Hames told participants during a recent ATMmarketplace.com webinar. "The details could be a branch location or a call to action at the branch or any other channel that the customer prefers," he said.

By sending the details to the person's mobile phone, the cardholder does not stand in front of the ATM for several minutes, inconveniencing other cardholders waiting to use the machine. Banks want cardholders to quickly complete their business at an ATM and move out of the way.

Linking ATMs to mobile phones would help financial institutions accomplish another goal, said George Peabody, director of Emerging Technologies at Mercator Advisory Group, Inc. in Maynard, Mass.

Banks want ATMs to do more work as long as the additional tasks don't interfere with the ATM's primary role of dispensing cash, Peabody said. "Using ATMs as an up-sell touch point is a very logical extension in getting ATMs to do more work," he added.

An ATM sending an SMS-text message or a URL conveying an offer to a cardholder's mobile phone also can be measured, he said. "If the mobile phone owner clicks on the URL or the text message, the bank can count the click-through rate. The click-through rate would determine if the program is successful or not," Peabody said.

He predicts that with the growth of Near Field Communication (NFC), bank customers could tap their mobile phones at an ATM to authenticate their identity. Near Field Communication is a short-range wireless communication which enables the exchange of data between devices up to four inches apart.

The cell phone would eliminate the need for a customer to swipe his card at the ATM. Bank customers, however, would still have to type in their four-digit personal identification number as a second form of identification, Peabody said.