self-service banking terminals more than mere cash dispensers. Cash withdrawals are the largest category of ATM transactions. Yet many bankers are eager to capitalize on the widespread customer acceptance of ATMs by expanding the range of services offered through the terminals. Vendors of the machines - including AT&T Global Information Solutions, Interbold, and Fujitsu ICL Systems Inc. - are responding with offerings that try to satisfy these desires. Today's ATMs make depositing checks, obtaining loans, and opening new accounts easier and more appealing. Advanced devices can dispense an even wider range of products, including tickets, account statements, phone cards, postage stamps, driver registrations, and travelers' checks. The goal of expanding ATM functionality is to enable customers to do all the transactions at an ATM traditionally handled by tellers - and then some. Despite the widespread use of ATM services, bankers and vendors recognize that consumers remain wary of some automated transactions. Many of the newer ATM features directly address this fact. For instance, for those nervous about depositing checks at an ATM, a check scanning feature displays an image of the check on the screen, making depositors feel more secure that the check has really been captured. This counters "black hole syndrome," explained Ed Lutz, senior vice president of retail delivery at Bank of America Arizona. "The amount of check cashing activity at tellers really bugs bankers," Mr. Lutz said. The bank's Interbold ATMs also cash checks to the penny. These services have helped get people out of teller lines, he said. Bank of America Arizona has six of these units with Intelligent Depository Module at 24-hour Smitty's Supermarkets in the Phoenix metro area. Mr. Lutz noted that while about 15% of bank customers make deposits at ATMs, he expects up to 40% of check cashing to be done on ATMs. John Stroia, marketing manager for financial industry at Diebold Inc., Canton, Ohio, which markets Interbold ATMs, said his firm began offering image technology in 1991. This year it added a software program that reads the courtesy box of the check. "If the user miskeys the amount, the ATM knows because it can read what the customer wrote on the check." The practice of loading ATMs with advanced features has progressed so far that AT&T Global Information Systems, Dayton, Ohio refers to the devices as self-service terminals rather than as ATMs. Huntington Bancshares Inc., Columbus, Ohio, is one of the most aggressive deployers on AT&T's advanced function terminals. "The idea is to offer a sitdown environment with speakerphone capabilities and videoconferencing to converse with a personal banker,"said Andrew Orent, vice president of financial marketing at AT&T. Huntington has 21 document processing ATMs and 15 personal-touch videobanking machines, according to director of strategic planning William Randle. "At one of our Direct Access Branches we've replaced 12 tellers with one concierge/information administrator," he said. "We judge these branches quite successful." Huntington operates 12 such branches. The videoconferencing capabilities lets Huntington staff one central location, rather than multiple locations, with personal bankers and underwriters. "We can make a loan in Direct Access branches in 10 minutes and we can't do that at regular branches today because we don't have underwriters there," Mr. Randle said. Video-equipped self-service terminals also are being talked up by Interbold. "We're offering a 20-inch screen, two-way videoconferencing, laser statement printing and signature capture," said Mr. Stroia. "This is a lower-cost feature because it takes the need away for customer service reps and investment counselors to be in every branch." Huntington's Mr. Randle added that he sees customers getting comfortable with making deposits into ATMs. "While most use ATMs as cash machines, with self-service branches and no tellers, people use the machines for deposits," he said. "I think we've crossed a boundary." Huntington is an image processing shop and in a few years the bank plans to transmit scanned check images from ATMs to its processing center. "We'll be truncating the check at the ATM," Mr. Randle said. Huntington is also applying advanced technologies to the process of authenticating transactions. The bank is working with a spinoff of the Sarnoff Institute to install at its ATMs a biometric identification system. The system captures an image of each user's eye and compares the unique patterns of the iris to a master image on file. The process aims to replace personal identification numbers, which have proven in recent years to be easily compromised. "The scan can passively read the iris at more than a meter away. We see a lot of potential there," said Mr. Randle. He said AT&T also has been introduced to the technology. Huntington expects to be using iris scans by the first quarter of next year. Diebold is also interested in biometric identification. "The technology's not a problem, but transferring large data files from ATMs to the host is. When smart cards put the information on chips, the capability will reside locally at ATMs," said Mr. Stroia. Diebold is already using fingerprint biometrics in some ATMs abroad. David Baker, director of marketing for La Jolla, Calif.-based Fujitsu- ICL Systems Inc., noted that fingerprint identification is also being considered as a security feature for an ATM's internal vault. Though videoconferencing, check imaging, and security enhancements rank among the most important of new ATM features, vendors are looking at others, too. For instance, Interbold has created a check-printing function to be used by a bank in Singapore. "You walk up to an ATM and it prints 20 checks, binds and even MICR-encodes them," said Mr. Stroia. Interbold also plans to add Pentium processing chips from Intel to the PCs that reside in their ATMs. The chips are expected to speed the terminals' ability to process transactions. "As we put all these advanced functions on ATMs, transaction times slow down so the faster the processor, the better," he said. Interbold also is working with American Express to dispense travelers' checks from ATMs and "there's even an idea to put phone cards on ATM receipts," Mr. Stroia said. At Duke Power, Interbold is developing an ATM application that would let customers pay their utility bills in cash. The terminals, to be placed at the utility's offices, would allow customers to insert their bills into terminals which scan and show the bills on their screens. "We're seeing lots of interest from other utilities because they have the same challenges as banks in this application," Mr. Stroia said. In addition to front-end applications, the major vendors also are trying to improve the way the terminals are programmed. This effort includes incorporating object-oriented computing to make writing applications and training employees easier. The vendors believe that using open systems architecture and standard PCs and software at the core of their terminals will ease some of the back-office integration concerns that have surfaced in past years. Fujitsu, for instance, is installing high-speed telecommunications capability for the speedy loading of graphics and programs. Mr. Baker said this allows ATMs and branch automation systems to share the same communications lines. Ron Alkire, technical support manager at Downey Savings and Loan in Newport Beach, Calif., said the benefit of Fujitsu's telecommunications arrangement is that it allows for the distribution of software from a central location. "We'll be able to update rates and graphic images, as well as cross- sell," he said. This translates into taking the bank's Fujitsu Series 7000
