Article

It's complicated: New ATM services raise complexity along with opportunity

As operators add new services at the ATM, transaction monitoring can help them continue to meet high customer expectations.

March 23, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

This is a true story: One evening not long ago, a woman in Battle Creek, Mich., was depositing cash at a drive-through ATM. The machine was being finicky about accepting the bills, so the transaction was taking some time. A man waiting to use the ATM began to honk his horn and curse at the woman. Words ensued. The incident ended with the man punching the woman in the face and speeding away.

It is an extreme example, but it's an example no less of what can happen when there's a slowdown at the ATM.

While there's not a great deal of research in the financial industry about customer response to ATM transaction delays, there's quite a bit of study data in the retail world about wait times for both POS and e-commerce transactions. According to Marc Borbas, vice president of marketing for private software developer INETCO, just a few seconds' delay can move a customer's perception of a wait from "normal" to "intolerable".

"One of the things that we're starting to see in the e-commerce space is how correlated the response time of an e-commerce website is with the customer's likelihood to purchase. You can actually see differences in conversion rates the faster the website gets," Borbas said.

Impatience is the obvious reaction to a wait. A more subtle reaction is angst. "There's a difference between four seconds and seven seconds," Borbas said. "When [the wait] hits seven seconds, you start to get that 'declined card' anxiety: 'Okay, this isn't going to turn out well — I've done something wrong.' And you know, it's an intangible part of the consumer experience but it's important."

A history of time-trimming

Much of the delay time in ATM transactions has been trimmed out of machine processes over the years as mechanisms and software have become increasingly fine-tuned. The results, said NCR Corp. marketing director for ATM software Robert Johnston, are reduced downtime and wait time. Uptime for some U.S. networks today averages between 98 and 99 percent, he said, and transaction times can run less than 30 seconds.

These numbers have been driven largely by remote management agents, Johnston said. A number of years ago, NCR introduced its Gasper Vantage agent, a sort of "incident management tool," as Johnston called it. "It can tell you if something's broken; it will automatically diagnose the fault, tell you what to do to get it fixed, and where possible, it will fix it remotely or you will have to dispatch an engineer to fix it." An RMA can even take care of tech dispatch.

The next step after remote management was remote management analytics, a tool that compiles the RMA data and in effect turns it into a story about what's happening in a network at the machine level. This type of information has proven highly useful in helping operators anticipate and circumvent maintenance cash servicing issues, improving uptime and machine performance.

And it's kept ATM users very happy, said Ed O’Brien, director of the banking channels advisory service at Mercator Advisory Group Inc. "We've seen in our customer monitoring surveys that customer satisfaction with the ATM channel is running at about 90 percent or so. I think a lot of credit goes to machines doing what's expected and doing it flawlessly and being very reliable."

As the financial industry has worked to move customer traffic from the teller to the terminal, RMAs have been useful in maintaining machine uptime and customer satisfaction, O'Brien said. "Now they're being used for envelopeless deposits … and also other capabilities. Because of this, uptime is critical and downtime can be a killer. And knowing the condition of an ATM prior to its failure, or knowing its condition of whether it has the right assortment of notes and bills prior to peak time is also critical."

New challenges to efficiency

To further increase their revenues and differentiate their services, operators are starting to add more communications network-reliant services such as bill pay, mobile transaction staging, machine-to-machine transfers, mobile top-offs, prepaid card sales and more.

The upside of this, said O'Brien, is that "with the new technology and new processes, it's kind of the staid old boring channel no longer. It provides opportunities for financial institutions that they haven't seen in 40 years." That's good news for an industry that's struggled to find itself in recent times.

But as always, there is a downside to the upside, and in this case it is the fact that the remote monitoring agents that have done such a bang-up job keeping customers happy up to now are not much use when it comes to monitoring the communications network side of things. And as the level of complexity at the network increases operators are finding that, just as at the machine level, performance must be monitored and managed.

"What they're finding is that they need an extra layer of management tool … that allows them to track what's happening at the transaction level, because they know the hardware's working 98, 99 percent of the time — it's not such a big issue as it was," Johnston said. "Now it's about real fine-tuning, really getting to the detail of what's being carried through these machines as opposed to what the machines are actually performing."

This type of management is important for continued customer satisfaction because there's a lot going on at the network level that can jam up the works. To illustrate, Johnston uses the example of an ATM operator who offers billpay service for utilities. To do that the operator must connect his ATM to a server that’s provided within the electricity provider's network, basically a third-party service that assists with the transaction. "So that then makes the network more complicated," said Johnston. "Somewhere there's going to be a handover of that transaction from the bank's ATM network into the electricity utility provider's network — and back again."

Finding slowdowns quickly

As efficient and reliable as these networks are, they are still subject to transmission errors and hang-ups. Borbas likens the sensitivity of the interconnected process to flying 30 planes in formation. "If any one of those planes gets out of sync then things start to break down quickly," he said. "And that's really where we have response time issues — it's that somebody's flying out of formation."

Finding out who that "somebody" is can involve a great deal of data sorting and finger pointing. And that, said Johnston, is why NCR formed an agreement with Inetco to be a reseller of the software developer's transaction monitoring system. Though other high-end providers such as IBM and Accenture also have network analysis tools, these are generic systems for desktop PC monitoring.

These may bear similarities to an ATM transaction monitoring system, but they lack the ATM focus that's needed to truly understand what's going on in the network, Johnston said. "The Inetco system is much more focused towards our environment in terms of ATMs, payments and financial networks…it's got the specialist interface tools in it." he said. "It's not just auditing the network and that's a job done but it's actually analyzing the network and giving you financial transaction-relevant information back."

Transaction monitoring can act with amazing speed and accuracy to find what amounts to a needle in a haystack. "It's just almost impossible to say for sure where the fault is and you end up getting into a debate with two or three different IT and network monitors, followed by trial and error and several hours later you might have found the problem," said Johnston. "Whereas the Inetco solution can tell you exactly — it was this transaction on that server at that time of day. So it won't solve a problem but it will tell you where the problem is."

The transaction monitoring solution deploys without changes to an FI's applications and without the addition of agents. It simply takes advantage of the fact that every transaction goes across the network by tapping into the network in a non-invasive way. The system captures a copy of the network traffic and conducts a highly sophisticated analysis on that data to turn it back into transaction information. With this information, the user can see how various applications are working together in a shared environment.

This can be especially valuable when changes are made to the network, which is in a constant state of renewal. When any aspect of the network is altered — with new hardware, new servers or new processes — transaction monitoring allows the user to ensure that post-implementation performance achieves a desired level.

Smooth operations, satisfied customers

Transaction monitoring ultimately works as an extension of the other remote management services that have raised customer satisfaction with the ATM to an amazingly high level over the years — 99 percent.

"If you think about the core financial transaction we do at an ATM — that's been happening for 30 or 40 years and that's extremely well optimized," Borbas said. "But when you think about things like concert tickets and mobile top-ups that are relatively new services on the ATMs — they haven't gone through that same bullet-proofing process that the core financial transactions have. In a lot of cases, not only is there more opportunity to monitor and optimize those, but also because they're new services, you really kind of want it to work right the first time for the customer who tries it."

For more on this topic, visit our networking/connectivityresearch center.

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.