News

Bringing the ATM out of the silo

October 11, 2005

The ATM channel is one of the financial industry's most valuable consumer touchpoints because, away from teller and online-banking channels, the ATM is the only touchpoint most banks and credit unions have left.

Imagine how much more valuable this touchpoint would be if it could communicate with a financial institution's (FI) other channels.

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"Integration across channels is something that all financial institutions are trying to achieve," said Madhavi Mantha, a senior analyst for Boston-based financial services consultancy Celent Communications LLC. "A lot of FIs have a switching (channel) infrastructure to have a common server," but that switching doesn't allow for the reusability of code from the ATM to the online banking channel, for instance. "You don't have any quick and easy way to use (and translate) that code," she added.

That makes integration a problem.

"You've got these separate customer-facing applications, and if you want to have a cross-channel relationship with customers, you have to have it all integrated," Mantha said. "It's a side effect of how banks have evolved over time."

Many FIs are still working within the confines of those restrictive systems for a number of reasons, including mergers and acquisitions. Middleware has helped alleviate the problem, but it has limitations.

The European connection

John Watkins, who oversees self-service-system portal solutions for Germany-based Landesbank Baden-Württemberg, agreed, adding that LBBW has spent the last four years working toward a solution.

LBBW (U.S. $415 billion) has a dynamic infrastructure that includes 200 bank branches as well as a network of 240 ATMs and about 300 account-service kiosks. The bank also completed two significant mergers over the last three years, which only added to its system complexity.

"We had various teams that only knew their environment," Watkins said. "And we wanted synergy between the channels."

Mantha said that's a common problem. "There's no question that this is a priority for FIs. You should have knowledge between banking channels."

But LBBW has discovered a solution, Watkins said. "Our channels are no longer separate," he said. "They're all running on the same operating platform, the same infrastructure."

For the last year, LBBW has been using enterprise software from Wincor Nixdorf International. Since launching the system, the bank has spread its maintenance costs across one platform, subsequently reducing its annual support costs by 40 percent.

Mike Engel, the head of business development at Wincor Nixdorf's ProClassic/Enterprise solution, said it is unique. "We are focusing on what we know, and we are developing a Java- and browser-based smart client solution for the self-service channel," Engel said. "But the solution can be kept on a central server and can be used on other channels, as well as exchange information between the other channels."

Engel added that the system provides a homogeneous environment, "so, as an example, you're not writing a new customer campaign for each channel."

"It really sounds likes they're trying to promote a new architecture," Mantha said, "and running everything on one server, that's something that will resonate with FIs."