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The future is now

While the biggest banks tend to introduce new functionality first on their ATMs, RDS attendees learned that at least one smaller player – New Orleans-based Hibernia National Bank – has cranked up its functionality a few notches.

December 18, 2001

But smaller players are sometimes on the cutting edge too, as evidenced by "The Future of Self-Service Delivery: Driving Customer Satisfaction and Profitability," a presentation by William Arnold,Hibernia National Bank'svice president of ATM Delivery Channel Management, and Thomas Swidarski,Diebold'svice president of Strategic Development, at last week's BAI Retail Delivery Show in Anaheim, Calif.

Hibernia, with $16.3 billion in assets and 262 locations in Louisiana, Texas and Mississippi, in the past year launched several initiatives that have yet to make it off the drawing boards of many larger banks.

You put your money in….

One issue Hibernia tackled last March was encouraging customers to make deposits at the ATM. While ATM users are comfortable withdrawing funds from the machine, few of them want to put money in.

Statistics from some of the country's largest EFT networks bear this out. In the NYCE network, only about 1 percent of ATM transactions are deposits, according to NYCE spokesperson Lori Keyes. PULSE spokesperson Cindy Ballard said that about 1 percent of transactions switched through the Money Station network are deposits. The figure is higher for the MAC network, about 10 percent, according to Concord EFS spokesperson Melinda Mercurio.

The first step, Arnold said, was to credit deposits made before 5 p.m. to a customer's account the same business day. Previously, he said, late afternoon deposits were not credited until the next business day. The cutoff times for same-day credit also were not consistent at all Hibernia branches; they varied from noon to 2 p.m.

Enter the ATM, which became a key part of boosting customer awareness of the program. Messages promoting the same-day service appeared on ATM screens and receipts, in banner ads on the bank's Web site and on posters, table tents and fliers at branches.

Also in branches, messages were added to the receipts handed out by tellers. "You've just left the teller window where you've made a deposit. You're the customer we're trying to reach," Arnold said.

The most attention-getting promotion was a three-month sweepstakes in which customers were entered every time they made a deposit at the ATM. Hibernia doubled the amount of two winning deposits a month, up to $500.

The result: ATM deposits now account for 5.6 percent of Hibernia's total number of deposits, up from 3.3 percent in February of 2001.

Promotion was the key to overcoming customers' initial reticence. After that, Arnold said, the rest was gravy. "Once you make that first deposit at the ATM and get it credited to your account, you're going to use it over and over again."

Getting to know you

From January to April, Hibernia conducted a one-to-one marketing test on five of its 400 ATMs. Though a popular topic among financial institutions for years – former Wells Fargo Vice President of Marketing and Business Development Barry McCarthy referred to it as "the holy grail" at a trade show presentation way back in 1999 – few have launched actual pilots.

The bank targeted two categories: non-customers and customers Hibernia thought might apply for a home equity loan, based upon a profile of income, ATM usage and other factors.

Non-customers saw four messages. The first was what Arnold called "a survey question" asking if they knew Hibernia customers could make deposits at ATMs. Their answers helped Arnold craft the deposit program, which was still in its conception stage.

"It wasn't scientific or anything, but it helped me get an idea of how many people knew you could make deposits at ATMs," he said. (About 80 percent responded affirmatively, he estimated.)

The remaining three messages, which included the URL of Hibernia's Web site, asked ATM users if they were tired of paying fees at Hibernia ATMs and invited them to become a Hibernia customer.

Those targeted for home equity loans also saw four messages. The first asked if the customer wanted to apply for a loan, the second asked if the customer knew home equity loans could be tax deductible, the third repeated the original message, and the fourth was the deposit "survey question."

Hibernia didn't take "no" for an answer, Arnold said. The choices were "yes" and "not today."

If the customer answered "yes," the information was relayed to the bank's direct sales center for follow-up. "Not today" respondents saw a screen that read: "Hibernia has home equity loans. If your needs change, visit us atwww.hibernia.com."

In retrospect, Arnold said, he would ask the "teaser" question about tax deductions on the first screen then follow up with the loan offers. He would also relocate the "yes" and "not today" buttons from the bottom right hand corner of the screen.

"They're used to hitting those buttons all the time to accept the surcharge and whatnot," he said. "Next time, I'll move them up to the top and make them think about it a little more."

Fourteen percent of customers responded "yes" to loan offers and were referred to the bank's direct sales force. While Hibernia "sold a few" home equity loans, Arnold said the true purpose was to test the technology.

No more sneakers

Hibernia uses Diebold's iqESD, a centralized, server-based system for remotely managing Diebold ATMs. According to Diebold's Swidarski, iqESD can transmit icons, screens, coupon files and MPEG videos from a computer workstation to ATMs. Using either a TCP/IP or dial-up connection, it can also retrieve information from ATMs (such as Hibernia's survey responses) and transmit it to the workstation.

Using iqESD, deployers can also group ATMs and set up a delivery and activation schedule for ad campaigns, such as Hibernia's home equity promotion.

The iqESD system reduces Hibernia's reliance on "sneakernet," or sending employees (sneaker clad or not) to machines to load and unload disks. Downloading screen content remotely from the iqESD server ensures that ATM ad campaigns are timely.

"What you don't want is a marketing campaign out there that's a year old because somebody forgot to go out and change a disk," Arnold said, noting that Hibernia once ran a loan promotion that mentioned ice cream in December.

Now hear this

Hibernia also became one of the first financial institutions to introduce audio capabilities at the ATM when it rolled out a Diebold 1062ix equipped with voice guidance in mid-October. The bank is adding a second audio-enabled machine this week. Arnold said more will be introduced in Louisiana and Texas next year.

The move "strengthened our relationship with the local community," Arnold said and resulted in a positive two-minute spot on a New Orleans evening newscast (which he showed to those attending the presentation).

Windows of opportunity

Though all of Hibernia's ATMs still run in an OS/2 environment, Diebold's Swidarski emphasized that even more flexibility could be afforded by a Windows-based platform. Noting that most banks offer some form of online banking, Swidarski said that applications developed for the Internet can be easily migrated to the ATM in a Windows world.

Introducing new functionality to the ATM, such as loan payments, bill payments and mini-statements, is quicker and easier in a Windows environment, Swidarski said. And customers may be willing to pay for some new services.

And a Windows-based platform also gives deployers an enhanced ability to experiment. "It's not as if you're going to do 11 things, and they're all going to be right. But this way you can test these new things quickly and alter your plans if you need to," he said.

While Arnold expressed interest in migrating Hibernia's ATM network to Windows, he said that innovation is possible even in an OS/2 environment.

"A lot of people think they have to wait and get Windows-based ATMs before they try anything new," he said. "But you don't have to wait until you upgrade. We're proof of that."

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