STRATEGIC PARTNERS
Software developed by AutoBranch Technologies can put multiple bank brands on a single ATM, thus allowing banks to expand their geographic reach and add advanced transactions without investing in expensive hardware.
January 15, 2002
ATM users typically save their more sophisticated transactions – such as account transfers, balance inquiries and deposits – for machines at their bank branches, using off-site machines for cash withdrawals only.
But software company AutoBranch Technologies, based in Toronto and Charlotte, N.C., hopes to change that with a new patent-pending technology it calls Dynamic Branding.
The concept is to allow multiple financial institutions to share a single network of ATMs. When a customer of a participating institution inserts his or her card into an ATM outfitted with AutoBranch software, the machine will read the Bank Identification Number, identify the card issuer and create an experience identical to what the customer can experience at a branch ATM.
Customers will see the same screens and same menu of services that are available at branch locations or on Web sites.
"Financial institutions can present a look, feel and brand that is consistent with their Web site and branch environment," said John Sinton, AutoBranch president and CEO. "Many customers today only use off-site ATMs. No one wants a two-tier system where if you go to a retail location, you get a second-class experience compared to what you get at the branch."
Customers of participating institutions also won't pay a convenience fee. While ATM deployers will likely lose some surcharge revenue, Sinton said they will benefit from added traffic to the machine. More traffic means more interchange income. AutoBranch encourages institutions to take an active role in boosting transaction volumes by promoting the availability of the ATMs to its customers.
Several industry surveys indicate that consumers will be willing to pay fees for more advanced options such as bill payment, Sinton added. "We think we'll be able to deliver incremental transactions that will more than offset the cannibalization of the surcharge."
Laser Cash, an ISO that manages about 600 machines, installed the first six ATMs, or ABMs as they are commonly referred to in Canada, at Rogers Video stores. The ISO owns the machines, which carry the Laser Cash brand along with an AutoBranch logo. Bank brands appear only onscreen when a customer's card is inserted.
Laser Cash President Matthew McIver said that Dynamic Branding will allow financial institutions to offer a wider variety of products and services to their customers without investing in the high-end hardware required to run advanced applications. "They don't have to own the ATM; they can own the transaction," he said.
Sinton said that online banks with no ATMs and small banks and credit unions with relatively few ATMs will likely be among the first to join the AutoBranch network. The first financial institution to sign on is All Trans Credit Union Limited, a Canadian institution with 20 off-site and three branch ATMs.
"The best choice is always to have our own machines with our own insignia, but this is second best I think. At least we get our own screens, which is what people focus on," said Mike Alexander, the credit union's president. "We don't have the financial reach to put in 2,000 ABMs."
All Trans pays an annual subscription fee to AutoBranch based on its number of cardholders and a small per-transaction fee as well. "It's an awful lot less than deploying more machines," Alexander said.
Yet Sinton believes there is a market for larger banks as well. Noting that just six banks dominate the Canadian market, while no U.S. bank has coast-to-coast coverage, he said, "I think the large U.S. financial institutions all dream of being the equivalent of one of the 'Big Six' in the U.S., and they aren't blind to the advantages of participating as an issuer as well as an acquirer to fill in the gaps in their network."
The AutoBranch software was certified last summer and was tested at several beta sites before going live in April at the six Rogers Video stores, a large Canadian video rental chain.
"It's real, and it's here," Sinton said. "It's not just another interesting promise."
According to Laser Cash's McIver, ATMs in Canada are more likely to have the color screens and NT-based platform required to run AutoBranch's software. While there are relatively few machines with that kind of technology in the U.S. – particularly in off-site locations --Sinton said his company's software may help change that.
"Financial institutions have a business case to upgrade on-premises ATMs, but they do not have a business case in off-premises locations. The majority of our discussions in the U.S. are with customers looking for that business case," Sinton said.
"Banks need a reason to switch from a little box to a big box," agreed Russ Green, executive vice president of sales for Mosaic Software, which is providing its Postilion product to enable AutoBranch to connect to multiple transaction processing systems. "When this concept starts to catch on, I think we'll see far fewer functionally-challenged ATMs."
Banks owning ATMs would, in essence, have to give other banks free access to their machines. But, Sinton said, "They'd also be having their competitors effectively pay for them to upgrade their network of ATMs."
The newest addition to the AutoBranch software, called "My Preferences," will let ATM users customize transactions by pre-selecting their usual language, withdrawal amount, withdrawal account and receipt printing preferences. Several large U.S. banks experimenting with Web-enabled ATMs, including Wells Fargo and Bank of America, have expressed interest in this type of consumer-friendly customization.
