I recently came across an article that claimed the Church of England may install automated teller machines in its rural parishes. If the United Kingdom is anything like the United States, my guess is that ATMs will find their way into cathedral apses and naves. Here in New York, you can't turn around without hitting a cash machine.
On paper, the spread of ATMs and cash machines into non-bank location should be a net positive for consumers and financial institutions alike-more convenience for the former, better exposure for the latter. Unfortunately, automated teller profusion also casts light on one of the most controversial issues facing banks today-the ATM transaction fee.
Indeed, as soon as I tell someone that I work for a banking magazine, the first question they inevitably ask is why are they charged to access their own money at an ATM machine. I try to explain using all the rationale I have heard-high maintenance costs, the inability to generate supporting revenue through screen advertising and so on. But I don't know if explaining why banks charge ATM fees alleviates their anger because I know the reasons and I'm still miffed.
Don't get me wrong, I don't mind paying the ATM fee, especially if it keeps me from having to stand in line at a teller window. What angers me is the poor business acumen financial institutions have shown thus far in implementing ATM fee strategies. For example, I have been a client with the same bank for 15 years,and not once have I been told the reason behind ATM fees and why they keep rising.
When my rent goes up, I get a letter explaining the increase. When my car has a recall, I'm told what's being changed and why. These industries have learned the hard way that public relations is important, that an informed customer, even if the news is bad, tends to remain a loyal one.
Another issue I have with the ATM fee is that it does nothing to solve the core problem of the technology for banks-the high cost per transaction. Instead of working create internal efficiencies that could reduce ATM costs, most banks simply pass the expense on to the consumer. The downside: until this issue is addressed, the fee will continue to rise.
I know a lot of bankers will respond to this by saying that ATM fees are only a short term solution, that eventually people will use the Web and electronic cash to satisfy many of their transaction needs. But ATMs aren't about to fade into the sunset just yet, and it's time for banks to come up with a real business plan to make them profitable.
2001 CMP Media LLC.7/1/01, Issue # 3807, page 6.