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As banking technology and strategy evolve, ATMs can provide consumers with all the conveniences of branch banking.

Relationship Builders

The financial services industry has long talked about using ATMs to enhance consumers' relationships with their banks. Although nothing can replace a person-to-person interaction, the idea of providing a customized experience at the ATM is gaining steam.

Silva says this will be one of the biggest changes to come along in the ATM world. There finally will be true targeted marketing at the ATM, he contends. "This is going to be one-to-one marketing where, if the bank knows your CD is coming due in a month, it will give you hints as to other places for you to put that money," he says.

Personalization will be another big area of interest, Silva adds. "Call me by name, remember the language I speak, my favorite amount of money to withdraw - it may sound trivial, but it does make a difference," he asserts.

"There's a real opportunity for banks to use their ATM networks as better communications vehicles with their customers by connecting with CRM tools and the data warehouses on the back end," says Diebold's Merrell. "This will offer nicer, more-personalized screens. The technology is there and banks are starting to do this."

Of course, none of this is possible without first lining up the data from the various channels within a financial institution. That is why ATMs increasingly will factor more into banks' cross-channel strategies. The goal is to provide the user at the ATM with access to the same data one would find at the branch, the call center and on the Internet.

All those who spoke with BS&T agree that consistency is vital to a quality offering. "It's always important to keep channels in alignment in real time," Wells Fargo's Velline says. "What's also important is consistency within the same channel - all our ATMs should provide the same six languages, access to the same 22 financial accounts, the same colorful touch-screen interface, etc. It should be an experience you can count on no matter which Wells Fargo ATM you go to."

Another feature that fits in well with an integrated channel strategy is a personal alert system. According to TowerGroup's Silva, such a feature can enhance the customer experience from many angles. "Alerts have a more significant implication for banks because you want to do this across channels," he says. "If a bank sees fraud on a card or that the customer is awaiting approval on a loan, an all-points bulletin will go out saying, 'Hello, So and So. Your loan has been approved. Please come down to the branch.'"

These alerts could be little pop-up reminders that appear on the "please wait" screen. But this must be coordinated across delivery channels, emphasizes Silva, otherwise the customer will become annoyed if this same message continues to appear in other areas after it was broadcast already.

Perhaps the greatest challenge to the consistency philosophy is cultural in nature. Some banks, or some departments within banks, simply have different perspectives when it comes to how to treat customers. "This is not difficult to implement technologically," asserts Diebold's Merrell of the consistent customer experience. "But organizations within financial institutions sometimes have different goals and views of the customers."

Image Will Be Everything

One point with which financial institutions do appear to agree relates to the coming revolution in check processing. With the advent of Check 21, banks are scrambling to compose strategies with regard to digitizing the check clearing process. It is no surprise that ATMs are being targeted as the perfect outlet for this very automated self-service function. The consensus from those interviewed for this article is that imaging at ATMs will benefit banks and consumers at many levels.

For banks, the constant worry of envelope fraud, in which fraudsters deposit an empty envelope and lie about the money they allegedly deposited, becomes a nonissue. Since no envelopes will be involved with digitized deposits, the bank always knows how much money it is receiving.

Furthermore, the cost-savings potential - $2 billion a year, according to TowerGroup's Silva - of eliminating paper with this technology is impressive. And paper is not the only dinosaur waiting to be wiped out. The manpower required to process checks deposited at ATMs is something banks would be happy to eliminate. "It costs banks more to process an ATM deposit than one at the teller because you have to send an armored carrier to the machine to pick up the currency daily," explains Silva. "They take the deposits to a processing site where people need to open the envelopes. This adds up."

For consumers, imaging at ATMs means that funds deposited at the machines are available immediately and they are there at the screen to correct any errors as they occur. "I see this as part of an attempted shift of routine payment transactions from the branch," says Forrester's Ensor. "ATMs are fantastic for this."

"Our goal is to image enable all of our ATMs that accept deposits," says Susan Symons, ATM general manager with Charlotte, N.C.-based Wachovia ($506 billion in assets). "This provides huge benefits for customers because they get real-time credit for the transaction, and it's just more secure."

Symons says Wachovia is replacing ATMs in its network so that they can accommodate imaging equipment. Though she admits this will not be an easy process, "It will be well worth it," she stresses.

Wells Fargo already is putting its ATMs on the imaging bandwagon. According to Velline, the bank has been piloting such technology for the past couple of years. "Ninety-eight percent of our customers who use the imaging technology say it's easy at the ATMs," he relates.

Diebold's Merrell says his company definitely has seen an increase in requests for imaging technology since Check 21 was enacted. "Some banks will purchase ATMs with imaging devices even if they aren't rolling out the technology immediately," he notes.

Perhaps the biggest drawback to installing imaging technology at ATMs is the cost of the equipment and the infrastructure upgrade. Even Merrell admits that the cost of check imaging technology throughout the ATM industry "is not inexpensive." However, most industry experts agree that the overall savings that will be realized outweigh any negatives associated with the cost of implementing ATM check imaging.

Forrester's Ensor does offer a word of caution, however, about increasing self-service functions such as check imaging at ATMs. North American banks "should think carefully about how they deploy this technology," he says. "If you look at the U.S., Canada and the U.K., check volume is plummeting, so the business case might not be there soon" for investing in imaging technology.

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