News

FIs give low-tech ATMs a dose of Internet technology

March 16, 2005

New York Times: Wells Fargo, Bank of America and other financial institutions are giving their low-tech ATMs a dose of Internet technology aimed at speeding transactions, reducing paperwork and exposing customers to a wider range of transactions.

Behind these upgrades is a broader effort to attract more online customers, all spurred by recognition within the industry that Internet customers are more profitable than the unwired masses. Analysts said the cost per transaction is considerably lower for online banking than offline, but more important for financial institutions is that those who bank online are simply more desirable customers.

According to Sanjay Gupta, e-commerce executive at Bank of America, the company's 12.6 million online banking customers are 27 percent more profitable than their offline counterparts. "They carry higher balances, their attrition rate is lower," Gupta said. "The loyalty effect far exceeds the cost required to serve those customers."

ATMs that replicate services offered on a bank's Internet site could encourage offline customers to convert to online banking, analysts said. (Free registration required)