STRATEGIC PARTNERS
Caja Madrid is taking a bold step by moving many of its over-the-counter services to ATMs, a move that could be copied by banks worldwide in the near future.
February 6, 2002
A Spanish bank is taking a bold step by moving many of its over-the-counter services to ATMs, a move that could be copied by banks worldwide in the near future.
Caja Madrid, with 1,750 branches and assets of $48 billion, is the second-largest savings bank in Spain. In June 2000, it began deploying 250 Personas 75 ATMs manufactured by NCR Corp. The customized, Web-enabled units allow users to make real-time credited cash and check deposits and pay bills. The units generate revenue through onscreen advertising and by selling movie and theater tickets.
Caja Madrid expects the machines to transfer 70 percent of the work normally done by bank tellers to ATMs. As more routine functions, like account deposits, are handled by ATMs, Caja Madrid tellers will focus on high value transactions such as loans and mortgages, according to bank officials. The bank has 11,000 employees and four million customers.
So far, 190 units have been installed. Based in Madrid, the bank boasted an inventory of 2,150 ATMs before the Personas installations began.
Implementing the plan
Several pilots were conducted at Caja Madrid branches to determine what services the bank should offer via ATM.
"They wanted to utilize their self-service channel more effectively," said Symon Buckman, director of merchant and deposit solutions for NCR Financial Solutions Group Ltd. in Scotland. "Basically, they wanted a value-based transaction."
To meet the bank's needs, NCR designed the ATMs for an open environment using the Internet for flexible applications.
If you're going offer such rich transactions on an ATM, Buckman said, you have to provide a way for the customer to navigate his or her way through the experience. Caja Madrid redesigned its branches to feature the ATMs prominently as customers enter the bank. The units feature a touchscreen that displays the new floor plan.
"You touch on the screen where you want to do any particular transaction, thus bringing the power of the branch layout onto the ATM," Buckman said.
In a promotional interview for NCR,Javier Celaya Mingot, channels service director with Caja Madrid, said the most difficult part of implementing the plan has been getting customers to accept the concept of banking with a machine instead of a person.
"In the first stage, our customers were clearly reluctant to use the machine," Mingot said. The bank sent employees to Caja Madrid branches to help convince customers to move from the teller window to the ATM.
Gradually, Mingot said, the approach has brought positive results. When customers see other bank visitors using the ATM, their fears of the unfamiliar subside and they are more willing to use the machine.
"Basically, right now, I would say we are at 30 percent of our usage level target, so there's still a lot of work to do," Mingot said.
Mingot believes theInternet will increase ATM's role as a strategic delivery channel for financial institutions. There is an increasing pressure in the industry to move low-cost transactions to low-cost channels such as ATMs, he said, and customers used to having access to their accounts with ATMs depend on this convenience.
Although Caja Madrid customers were reluctant at first to try the new ATMs, banking customers in general are growing accustomed to continuing a relationship with their banks through technology, Mingot said. Making technological advances was a factor in Caja Madrid's decision to adopt Web-enabled ATMs.
"Caja Madrid had a kind of leadership in terms of technological usage in the Spanish market. We lost that leadership, and we thought this project would be a good opportunity to regain that position. We think we are accomplishing it," he said.
Transactions
Many bills in Spain have bar codes. To pay a bill at a Caja Madrid ATM, the customer selects the bill payment feature, enters a PIN number and places the bill under a bar code scanner. The bill will appear on the screen, offering the customer a choice of paying through an existing account or with a check or cash.
"You're taking the transaction off the teller where it was basically a cost to the bank to keep servicing that," Buckman said. "They actually put it into a lower-cost delivery channel."
NCR's advanced imaging technology is designed to encourage customers to feel safe when making deposits at the ATM.
When a check is deposited, the image is displayed on the touchscreen. The amount on the check image is enlarged, and the image of the check is printed on a receipt of the transaction.
"The technology is there to give the customer the confidence that the transaction is going through," Buckman said.
America's watching
Caja Madrid is among the first to realize the power of the Web-enabled ATM, and other institutions are watching with interest.
NCR's product has already won some American admirers, said Marcus Haley, vice president of ATM and self-service solutions for NCR's Financial Solutions Group in London. But Haley won't say which American institutions are considering installing the new machines.
"We got a lot of opportunities that we're actively pursuing right now," Haley said. "There's a genuine interest. We're well beyond the sales presentation stage."
Haley said any buyer would have the full support of NCR's resources.
"We don't want to just provide hardware and watch the customer try to make it work. What we want to do is help them think through exactly how to implement what type of capability they need and where to place it."
