The ATM is moving into a much more powerful new role as banks deploy the latest hardware running on the Microsoft Windows operating system which delivers far more capabilities and allows easier integration with other channels. Now all it takes is for bankers to figure out what ATMs can do.

“The concept of channel integration, sharing information across all delivery channels, has been exactly where the major banks are going; it has been their Promised Land for years now. Everyone agrees that this is the Promised Land, but this transition has been extremely frustrating and difficult for them, and very little of anything real has been accomplished to date,” said Stephen Risto, director of the ATM Software Center of Expertise at NCR.

Two major changes have occurred this year, he added. The IFX (Interactive Financial Exchange) standard for connecting to the back office has been adopted. That may not sound like much, but it is a significant shift from past practice; the ATM industry has used outdated proprietary messaging that is so different from the other channels in retail banking that it has restricted the ATM channel to a silo. This year, ATMs have agreed to the IFX integration standard that other channels are already using to talk to back-end systems.

“Now that the first banks are implementing ATM channels based on the new standard we have much better hope of achieving integration with the rest of the enterprise. The first IFX implantations are going on this year, and they will have banks watching,” Risto said.

The second major change is personalized marketing presented to the ATM user. Banks have the business intelligence databases to support personalized marketing; now they are finally getting around to delivering messages to the ATM.

“In the US at this very moment, almost every major bank has a personalization project going on for their ATMs. When I insert my card, the ATM interacts with the back-end system and knows that I don’t want a receipt, and asks if I want my usual $140, so all I have to do is push a single button to confirm the transactions,” Risto said.

No longer will the ATM ask whether the user wants to proceed in English or Spanish. The first baby step is to greet the user by name, and the next step is to deliver a personally appropriate message from back-end systems such as Teradata, Siebel, or BroadVision.

“Financial institutions have grand plans to start leveraging their data warehouses by putting a knowledge engine in front to direct interactions with the consumer. As the projects get more sophisticated, each channel connected to that engine reaps the benefits,” said Risto. “The idea is not to repeat this customer information engine for each channel, but to build it once and use it across the enterprise. The ATM channel is a big piece of the strategy because it has the most customer interactions in the enterprise, and when you are standing at the ATM you are focused on the screen in front of you.”

The advanced Windows-based ATMs coming into use now mean the ATM is technologically close to the Internet banking channel, since both use client/server applications, TCP/IP, and other modern computing methods. Now running on old technology – some as ancient as 486-based ATMs with equally ancient interfaces – banks have some major investment to upgrade to faster processors, Windows, and improved networks.

But Risto thinks the investment is worth it.

“The ATM is the only channel where a bank regularly interacts with the customers of other banks,” he said. “So it can use the ATM channel to make offers to customers from other financial institutions. Other banks’ customers will never go to your call center or Web site, but they will use your ATM when they need cash.”