For the first few decades of the ATM industry, the ATM environment was well defined. Financial institutions would buy ATMs from a limited number of manufacturers; these ATMs would run software provided by the hardware vendor; and, in most cases, the ATMs would also be serviced by these same providers. The result was a stable operating environment that helped support the emergence of this important banking delivery channel.

Based on the 2006 ATM Deployer Study, the most comprehensive study of the U.S. ATM industry with data covering over 134,000 ATMs, 26% of U.S. ATMs are currently running Windows. However, ATMs are poised to change significantly as deployers migrate from OS/2 to Windows and from proprietary software to open standards. Within two years, the adoption of Windows-based ATMs will grow to 63% of the installed base. Moving to Windows-based ATMs offers at least three important advantages:

• Banks can choose the best software for their ATM networks, de-coupling their software selection from their hardware purchase. There is a multi-vendor standard, CEN XFS, for the design of ATM software. Any software that is XFS-compliant should operate seamlessly on any brand of ATM that is running Windows.
  

• Banks can implement new functionality much more easily. In an OS/2 ATM environment, communicating with a legacy host and using traditional communication protocols, making even simple changes to an ATMs’ capabilities was a major undertaking. Proprietary code needed to be changed and every terminal handler needed to be re-programmed. However today, Windows-based ATMs, communicating via TCP/IP, use modern programming tools and languages, and allow changes to be standardized across a diverse fleet of terminals.

• Banks can integrate their ATMs with other delivery channels, as well as CRM systems.

In the new environment, deployers will be able to differentiate the customer experience by terminal and/or by cardholder. Deployers that invest in advanced Windows software will be positioned to provide a more engaging ATM user experience. In the short term, this differentiated experience will take the form of more visually appealing ATM screens and cardholder preferences. In the longer term, it will take the form of segment-level and 1:1 marketing that enhances customers’ ATM experiences in a meaningful way. In short, migrating to Windows provides increased flexibility and operational efficiencies for ATM deployers. At the same time, deployers will face new challenges that did not exist in an OS/2 environment, such as virus protection, patch management, and security/firewall management.With eight billion interactions per year, ATMs are a critical touchpoint between banks and their customers. Windows-based ATMs enable these interactions to be more targeted to each customer, enhancing the bank’s overall value proposition and beckoning the dawn of a new era in the evolution of ATMs.

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While many consumers may have had conversations with an ATM at one time or another, especially late at night when our balance is insufficient for the machine to dispense cash, those conversations were all one-sided.  Now ATM customers can have a meaningful two-way conversation – because today’s ATM knows them well.

Given the choice, most of us prefer being in an environment where we are comforted by the thought that everyone knows us.  To that end, the best service industries combine speed, efficiency and convenience with the personal touch.  In retail banking, too, you can ‘have it all.’

Convenient = Impersonal?
Technology has changed the way we bank and has altered the way customers inter-relate with their financial service providers.  The ATM has given consumers 24-hour access to their cash while providing a low-cost delivery mechanism.  More recently, the emergence of Internet banking has enabled growing numbers of customers to conduct banking transactions from the comfort of their homes or offices.

As customers spend less time in the branch, so the nature of the relationship between the financial institution (FI) and its customers has lessened ... and with it, so has the FI’s competitive advantage.

A Unique Opportunity
It is then ironic that one of the technologies that reduced the need for face-to-face contact with customers could now hold the key to reinforcing the personal relationship with those customers.  NCR’s APTRA™ Relate solution, based on the Windows® platform, enables FI’s to personalize the service provided at an ATM, conveniently enhancing the customer relationship.
 
However, it is essential to deliver the right messages at the right time.  With modern enterprise analytics, the FI’s CRM system can be tapped to deliver cost-effective, timely messages on-screen.  These could include reminders that household insurance is due for renewal; a bill is due for payment or another special offer.  Applying APTRA Relate in a multi-channel environment ensures consistent messaging and follow-up, as well as avoidance of duplication at kiosks, teller counters, branch terminals and the Internet.  Today’s technology, such as Customer Power Manager for APTRA Relate, enables the FI to track and manage the distribution and respond to messages across its entire enterprise.
 
A Convenient
Personal Experience
OCBC Bank in Singapore is one FI that has successfully married its ATM network and other channels to its CRM solution, providing targeted messages to self-service customers without impacting the transaction time.  Customers are given the opportunity to respond at the ATM.  Take-up rates for OCBC’s targeted ATM campaigns have been up to 50 percent higher than equivalent direct mail campaigns, at half the cost!  The bank achieved a positive return-on-investment within six months of launching the project.

Beyond this, OCBC uses NCR software to personalize the ATM transaction and, in so doing, actually reduces transaction time by up to 70 percent.  When a customer enters his/her details, the customer is greeted by name in their preferred language, and is offered the option of a pre-defined ‘usual transaction.’  Sixty percent of OCBC customers use this convenient and time-saving facility.  Given the importance of interchange fees, an ATM feature that differentiates the ‘home’ ATM and makes it more convenient to use has obvious advantages.

Automated channels have meant better convenience, but to date have limited opportunities for one-to-one communication.  APTRA Relate allows you to re-kindle the personal touch.  It gives you the opportunity to greet customers by name, initiate two-way communication and cultivate stronger loyalty.

It’s nice to be recognized.  It’s also good business.

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For decades the ATM has been used as a mere cash dispenser and a siloed touchpoint in the bank’s many delivery channels. Today, forward thinking banks are starting to realize that ATMs are capable of much more and must evolve into interactive touchpoints. Certainly Check 21 is one driver for increasing ATM functionality. Check imaging and cash acceptance are rapidly moving to the mainstream on the ATM fleets of the money center banks, as are basic forms of personalization whereby the ATM ‘remembers’ consumers’ favorite settings.

Yet, these are just rudimentary steps. Equipped with the right software, switching platform and monitoring capabilities, ATMs can deliver true customer-experience management. In this scenario, ATM deployers can offer dynamic pricing, marketing and cross-selling, plus let customers have more control over their financial transactions. We like to call this a customer-managed relationship (CMR) instead of your typical CRM (customer relationship management). With CMR, the customer is empowered to manage his own information including transaction history, preferences and profiles.

If banks want to sell more products and services to their customers, they must look to the ATM channel as a place to engage, retain and acquire customers. While many bankers recognize the fact that the days of the ATM as a simple cash dispenser are over, they are often confounded over how to move into the new world of advanced functionality where the ATM can truly act as a virtual teller. For example, how can they provide on-screen links to mortgage rates and other information, or deliver the ability to print out applications, or offer on-screen bill-payment programs?

The answer lies in our Active Payment Platform (APP) and our transaction network infrastructure that supports a wide array of transaction types. APP allows ATM deployers to launch customized financial services in a matter of days – not months, with an unmatched level of flexibility in transaction choices. APP eliminates the costly and often unreliable integration of best-of-breed systems on different technologies like a transaction switch, a CRM system, monitoring system, device middleware and back-end interface. That is because those capabilities are offered in a single platform – ready to deploy in a co-branded or customized fashion.

You can think of our APP as the equivalent of a “multiprotocol transaction router,” which enables its customers to connect any transaction device with any financial application over any payment network. There is a tremendous amount of flexibility in touchpoints: ATMs, kiosks, POS terminals, and hybrid multifunction devices. Within these devices, bankers are free to choose those transactions that best suit their marketplace, e.g., check cashing (personal and payroll), cash advance, bill payment, ticketing, instant issue stored-value cards, money transfer and more.

Without a doubt, ATMs are a commodity, with over 600,000 ATMs deployed in the United States alone. However, average monthly transaction volumes have dropped to under 200 (from peaks of over 600). Specialty deployments offering new payment services are the only way of generating additional transactional revenue. By definition this represents a move into uncharted, and therefore more uncertain, territory. Conservative bankers must develop an action plan before moving into advanced functionality ATMs or kiosks. That is why we developed our FRAMES analysis:

• Flexible – Easy to integrate
• Reliable – Built-in audit capability for all services
• Available – Self healing and high uptime
• Monitorable – Application, devices, interactions, screen transitions, all is monitored in real-time
• Extensible – Add new features, upgrade by either push or pull
• Scalable – Grow from one to many to thousands

These are the salient points that bankers must address in developing their self-service strategies, and Infonox is there to help implement real world solutions that meet these requirements.

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Everyone is familiar with the ATMs in branch foyers, at the branch drive-thru and retail locations just about everywhere, but it is also gaining a place at the teller line now.  We have seen a big focus on taking self-service and assisted-service and integrating it into the branch.  One of the big drivers behind this movement is the widespread use of kiosks by the airlines, movie theatres, gas stations and other retailers.  People are very comfortable these days with self-service technology that is delivered via user-friendly kiosks.

While ATMs and kiosks offer cost cutting opportunities, that is not what they are all about.  Their ability to provide better service has piqued the interest of many in the banking community.  By offloading some of the more mundane tasks to kiosks, their staff can spend more time on personal service and sales efforts. They can truly become customer service representatives instead of tellers.  They now have the time to actually speak to customers and target them with appropriate products and services in a one-on-one manner.

The open system revolution has arrived in the ATM world and the possibilities are almost endless.  They include check imaging/envelope free deposits, cash recycling, personalization and marketing messages.  All of these features are enabled by the Microsoft Windows platform, coupled with TCP/IP networking, XFS and IFX communications as well as customer-focused applications.  Our INvolve® middleware is at the center of this revolution by providing the software that is needed to support the widest range of peripherals in the industry.  The list of devices covers all that are used within ATMs, kiosks and branch systems: printers, PINPads, cash dispensers, MICR readers, magnetic stripe and chip readers, check scanners and many others.
 
Now that this level of support is widespread in the ATM industry, financial institutions can benefit from the same infrastructure being deployed in the branch.  The issue is not, as in the past, whether the customer will use an ATM or visit a branch or try a kiosk.  Customers will do all of these.  The strategy now is to provide the right mix of attended, assisted-service, and self-service at the point of delivery based on what the customer wants to do right now. 

The benefits of assisted-service are one of the key lessons we learned from the integration of kiosks into airline check-in counters.  Customers who would not have previously used a stand-alone kiosk or ATM now felt more secure knowing that someone would be right there to help them should they have an issue.
 
Thus, every institution must be flexible in their service rollouts and use the appropriate mix of attended and self-service delivery based on their customers’ demographics and their strategic goals.    For instance, some may want to add currency acceptance if they have a large number of merchant customers, while others may want to implement envelope free deposits and front counter check imaging because of the relatively rapid payback that these services offer.  Expensive cash dispensers might be shared among tellers and customers, while check volume would determine if scanners are interconnected at the teller line or the branch back office.
 
No financial institution can afford to delay moving forward with new technologies that can provide a flexible infrastructure in an environment where customers demand services delivered to their needs.  Open standards and middleware solutions greatly simplify the development, deployment and evolution of Windows solutions that run on virtually any type of device that the bank would like to deploy.  The end result is better customer service, lower infrastructure costs and the ability to offer higher value transactions.