Developing the bank branch with next-generation ATMs

Mark Vernon discusses the trend in the banking industry to revitalize branches with new technologies. Next-generation ATMs will expand the services available at the local branch, allowing bank tellers to concentrate more on customer service.

Despite the emergence of Internet banking and call centers in recent years, the banking industry has come to realize that there is still life in the retail branch. There is a trend toward revitalizing branches with new technologies and making them bank services selling machines. The banking industry learned the lesson that for major financial decisions, such as setting up accounts and buying mortgages or insurance, customers like to visit their local branch. Having realized this, banks have since then been working to equip branches with technology that makes them flexible spaces to issue personal financial advice and to market personalized financial products.

However, it is not only the banks that are learning something about the branch. Customers will also need to be educated—so that they use tellers for the major decisions and in-branch ATMs for the small, high-volume transactions.

In other words, now that banks see that branches are effective vehicles to grow and cross-sell bank assets, branch automation should become a strategic investment. A new report from Celent, "Branch Automation Solutions", shows that banks are beginning to come to grips with this, taking advantage of increasingly obsolete branch systems to replace them with new technology.

Moreover, vendors have responded by targeting banks, small and large, with what Celent calls CRM Lite. CRM Lite tries to avoid some of the complexity of full blown CRM, by integrating with the teller and banking systems out-of-the-box, and in the case of vendors that are also providing the back office, integrating to the core as well.

According to Bart Narter, author of the report and senior analyst in the banking group at Celent, "CRM Lite solutions from the branch automation vendors are less risky to deploy since a great deal of the integration work has already been completed. Banks are having real success with this CRM Lite, which can be measured at the top and bottom lines."

As well as being relatively easy to deploy, the resulting kiosks offer basic advice and sell services far more effectively than tellers, as well as provide customers with the privacy they enjoy when performing tasks like transferring money, paying bills, and finding basic financial information.

NCR—a major player in the ATM space—agrees. Cash dispensing has been the primary ATM application to date. "The ATM really took off as a single-application device for cash dispensing," says Pat Cronin, senior vice president for NCR's Financial Solutions Division. But now consumers are ready for other self-service possibilities and NCR believes there is a new high-volume transaction on the horizon: "Ever since, people have been looking for the next major application to automate. Our research shows that deposits are it."

For example, at Fidelity Investments, ATMs from NCR are providing customers with a no-envelope deposit system and image-containing receipts. Deposit capabilities are also an important feature of the NCR ATMs at Caja Madrid, the second largest savings bank in Spain, where cash and check deposits are credited in real time and customers can obtain instant proof of the transaction through NCR's advanced imaging technology.

"With deposit-taking ATMs you can have an interaction that's better than the interaction you have with a person today," says Cronin. "As a consumer, you get more out of it: more information flow, greater speed, more convenience, and possibly even greater movement and management of your money."

Statistics support the notion that this opportunity exists in the deposits arena. Globally, about 80 percent of all cash withdrawals occur at an ATM, while a remarkable number of deposits—70 percent in the United States—are still completed through a teller. Cronin expects that deposits will eventually reach the same level of automation as withdrawals. This is good news for banks, not least because they can realize dramatic cost reductions at the same time as their customers are enjoying greater access to services.

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