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Widening the Web at ATMs
Wells Fargo generated lots of press reaction when it ran full-motion video clips of Dreamworks movies and live news feeds from MSNBC.com on several of its new Web-enabled ATMs in September of 2000. But what kind of reaction has Wells gotten from its own customers? .
February 10, 2002
Wells Fargo generated lots of press reaction when it ran full-motion video clips of Dreamworks movies and live news feeds from MSNBC.com on several of its new Web-enabled ATMs in September of 2000.
But what kind of reaction has Wells gotten from its own customers? While the San Francisco-based bank isn't saying, it has stepped up its deployment of Web-enabled machines. Wells now has about 1,000 of them, at both branch and off-site locations. Eventually the bank plans to enable its entire network of 6,500 ATMs.
"Web ATM machines are another distribution channel for reaching our goal of providing anytime, anywhere service to our customers to help them succeed financially," said Bob Chlebowski, Wells Fargo's executive vice president of distribution strategies.
Bank of America, another early adopter of Internet technology at the ATM, intends to expand the number of what it calls "advanced technology ATMs" from 400 to 2,000 this year. BofA's Web-enabled machines are currently located in Dallas/Fort Worth, Atlanta, Charlotte, N.C. and Florida.
Future is now
Ian Rubin, an IDC analyst and author of a study entitled "Web-Enabled ATMs: Implications for Online Banking and Multichannel Delivery," believes that more financial institutions will join Wells and BofA soon.
On the road to Web ATMs |
Rubin's report features a case study of New York-based JPMorgan Chase, which is in the midst of a Web ATM pilot with fewer than 20 machines. According to the report, other institutions that are currently experimenting with Internet technology at the ATM include Spain's Caja Madrid, France's Credit Mutuel and the UK's Alliance & Leicester.
The earliest experiment with Web technology at the ATM was a seven-machine pilot in Toronto conducted by CIBC in 1996. Although that project did not advance to a wider rollout, Rubin said several key changes have occurred since then.
More banks now have the broadband connectivity necessary to support the machines. More banks offer online banking programs. Development teams are more familiar with HTML, Java and other programming languages. And, perhaps most important, both bankers and consumers are more familiar with the Web.
One of the key drivers of banks' move toward Web-based ATM technology, Rubin said, is the realization that they must begin to link their different channels, including branch, ATMs, call center and the Internet, to offer better customer service and reduce costs.
"For the first time in a few years, banks are really talking about multi-channel delivery," he said. "They're realizing they can't keep rolling out these separate channels without eventually bringing them together. And the longer they wait, the harder it's going to be."
Rubin said most banks also are re-evaluating their networks in light of pending modifications to the Americans with Disabilities Act that will likely require ATMs to offer voice guidance, as well as stricter encryption standards being pushed by Visa and MasterCard.
Fleet jumping in
Nandita Bakhshi, Fleet Bank's executive vice president of self-service/ATM banking, agreed that it makes sense for Boston-based Fleet to introduce Internet technology after upgrading approximately half of its 3,800 machines with Pentium processors and more memory in order to offer voice guidance.
Currently in the midst of a rollout of more than 1,400 "talking" ATMs, Fleet plans to pilot Web-based technology at 200 of its machines in Boston and New York in the first half of 2002.
Like BofA, Fleet will call its machines "advanced ATMs." Bakhshi explained, "People don't understand what Web-enabled means. They picture standing in front of an ATM and surfing."
Following the lead of Wells Fargo and BofA, one of the first Web-enabled functions Fleet intends to offer to its customers is the ability to customize their ATM transactions by pre-selecting a preferred language, fast-cash amount and whether or not they want a receipt.
According to Bakhshi, some of the other functions Fleet is considering for its customers include 30-day account histories, access to their Quick and Reilly brokerage accounts and bill payment capability.
Vendor independence
Fleet will use NCR's APTRA Edge software on its 200 pilot ATMs, half of which are NCR Personas 75s and half Diebold 1064ixs. Bakhshi said the test is a first step toward vendor independence, an important consideration for her institution, which has a highly heterogeneous network after several years of acquisition activity.
Rubin, of IDC, said that vendors like NCR realize they need to abandon their proprietary protocols and offer open alternatives if they want to compete in an increasingly saturated market.
"People ask why the number-one proprietary vendor would develop a vendor-independent solution," agreed Jim Piggot, general manager of software and services for NCR's Financial Solutions Division. "But you have to look at history. Every proprietary business that hasn't adapted to the marketplace has failed."
Linking disparate hardware is one of Fleet's three goals for its advanced ATM program, Bakhshi said. The other two are improving the customer experience and leveraging the development resources used for its HomeLink online banking program.
Hitting the target
Migrating to an open architecture will also allow Fleet to tap into "a pretty robust data warehouse" and utilize the data for one-to-one marketing efforts, Bakhshi said. "Cross selling is really the name of the game."
During its advanced ATM pilot, Fleet plans to show an offer for a credit card to 300,000 pre-approved customers during the "please wait" portion of their transactions. Customers will choose from three options: "ask me later," which will result in a follow-up phone call from a sales representative; "don't show me this offer again," which will block future promotional messages; or "yes," which will allow the customer to accept the offer after viewing the required disclosures.
Those who accept will be mailed a card within five to seven business days, Bakhshi said. In its follow-up research, Fleet will not only determine how many customers signed up for a card but also the cost of acquiring those customers.
Wells Fargo conducted a similar test in the first quarter of 2001, running a targeted marketing campaign at 300 of its Web-enabled ATMs in California. An ad that appeared while a customer's transaction was processing invited them to visit Wells Fargo's Web site to enroll in its online banking program.
The ad was shown to Wells customers without an online banking account. While Wells did not release specific data about the number of customers enrolled, the bank said that the rate of enrollment for customers who saw the ads was "significantly higher" than that of those who didn't see the ads.
Wells is currently running a campaign to encourage its inactive online bill payment customers to activate their accounts.
"We are able to serve our customers' financial needs by providing targeted messages that make the most sense for the specific customer," Chlebowski said. "Web ATM machines allow us to send targeted messages based on a customer's profile or the kind of transaction he or she is conducting. We can now target messages, products and services to customers that make the most sense to them specifically."
Rubin, of IDC, said banks cannot afford to overlook the ATM as a key piece of their CRM (customer relationship management) efforts because it's the most heavily used consumer banking channel. Noting that many banks collect data about non-customers' ATM usage, he said that a Web ATM would give them the ability to use the information to launch a recruitment effort.
"If a non-customer routinely came to your machine a few times a week, maybe you'd want to send them a message inviting them to open an account at your bank rather than paying user fees," he said.
Making a case
Although not as far along as Fleet or Wells Fargo in its Web ATM strategy, Baltimore-based Allfirst Financial recently purchased about 80 Fujitsu 8015s with an eye toward offering the technology. Allfirst, which has a fleet of about 600 machines, is currently experimenting with Web technology in its lab, and plans to conduct a customer pilot early this year.
Heather Briganti, Allfirst's senior vice president of electronic banking, said, "Web capability was part of our consideration when we were considering RFPs (request for proposals). Now we're a little farther along in making this a reality."
Like Chlebowski and Bakhshi, Briganti identified enhanced customer interaction as a key goal. "We want to take advantage of any opportunity where we can make a customer's experience more personal," she said, mentioning that the ATM would be a logical place to send customers "meaningful reminders and messages" such as maturation dates of certificates of deposit.
Yet Briganti said it's still tough to make a business case for investing in Web ATM technology.
"A majority of people, including members of executive management, still think these guys should just give out cash," she said. "Right now it's a challenge just keeping the old machines running."
Because "all of the bells and whistles can potentially generate cost," Briganti said she has focused on the ways Web technology can help save money, such as making it possible to automate software distribution rather than dispatching technicians to do so via sneakernet.
"Just getting out of the gate is the hardest part," agreed the IDC's Rubin.
While not downplaying the difficulty of launching a Web ATM program, Fleet's Bakhshi sees "the diffusion of technology" as a greater challenge. "You can always put the technology out there," she said. "But when you get the customer to use it again and again, that is where you are really successful."
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