News

Using real-time ATMs for improved customer relationships, profitability

Even though ATMs have been around a long time, FIs are still leery of using them as marketing tools ... at least to their full marketing potential.

March 5, 2006

Though ATMs have been around more than 35 years, financial institutions today are hesitant to utilize the technology to its full potential. Consumers have more banking options than ever before, and banks face intense competition. To meet consumer needs and truly compete, more banks are now operating in real-time as a way to enhance their customer relationships.

Bob Usner

When a customer makes a withdrawal, shouldn't they be able to go online and see the effect on their balance by the time they get home?

Banks can generate additional fee-based revenue, improve customer relationships and increase retention by delivering personalized, location-based content. The ability to integrate customer activity across all of the bank's channels creates an intimate profile that results in greater opportunities to sell targeted financial services. ATMs hold the key to the evolution, and the technologies, products and services are here to enable the transformation.

In their book, "The One to One Future," Don Peppers and Martha Rogers point out that the key to growing any consumer business is to offer and deliver products and services specifically designed for that customer.

Those products and services must be based on an increasingly precise understanding of the customer's relationships and interactions with a firm, Peppers and Rogers note. Banks and financial services firms are in a particularly powerful position to take advantage of that learning process because of the financial account information they hold and the transactions and services that can be derived from such knowledge.

The experience of the Web in general and online banking specifically has raised the expectations of consumers. Today's consumers expect actual personalization like they experience when shopping at Amazon.com or accessing aggregated banking records online.

However, the services an ATM delivers today are usually the same, regardless of who is standing in front of the machine.

That sterile, non-contextual interaction leads customers to the conclusion that they are neither valued nor understood by their bank. The customer thinks that since the ATM does not remember the routine transactions that she uses often, every other function must also be generic. The result is lower customer acceptance of customer-specific value-added transactions, even when they are offered.

Traditional ATM functions automate branch teller activities and have a value in speed and convenience for customers. ATMs continue to increase their transaction capabilities. To truly unlock the value of an ATM, we must look closer at the user experience and the type of services that could be delivered.

Strategies to consider include: improving customer interaction; integrating ATMs with the bank's other customer channels; expanding the ATM transaction set; and maximizing location-based services. There are increasing options available for automating the handling of more complex transactions, such as check cashing, bill presentment, money order issuance, ticket printing and bulk cash recycling.

Those capabilities expand the suite of services that ATMs can deliver. ATM technology has reached a maturity level that can transform the ATM into a customer-focused channel with middleware for value added services, greater customer retention and improved bank profits.

With a customer-focused approach, the simple ATM morphs into a wealth of useful services, some chargeable, some free, that are determined by the customer's identity and relationship with the bank; the ATM's capabilities and location; and the bank's strategies and other relationships. The various characteristics are encompassed into profiles that, in combination, determine the content that the customer sees when interacting with such an ATM.

Such an approach can be broadened to other channels allowing true integration of content delivery across the entire bank. The customer-focused bank - and the customer-focused ATM that is a component of it - is a concept ready for first-mover adoption today.