Paul Schmelzer Vice president, business development Deluxe Data Systems Inc., Milwaukee We have barely scratched the surface of the ATM's marketing potential. It's true that as ATMs have become a generally accepted - in fact expected - part of the retail delivery system, they no longer differentiate a bank simply by being there. And the usage promotions that replaced toaster and teddy bears in the 1980s don't deliver much return in the 1990s. But the ATM is a sophisticated distribution channel with the potential to play an important role in the retail marketing mix. Fourth-generation ATMs support high value transaction services that are gaining acceptance as older machines are upgraded to the new models. Services like account statement printing and postage stamp sales generate fee income, and experiments continue with simple product sales that can be completed on a self-service basis. When these services are coupled with advanced data base marketing, the marketing possibilities become very significant. I predict the 21st century "digital bank" will master distribution marketing and unlock the real potential of the ATM in the process. Distribution marketing will personalize sales messages whenever and wherever the customer chooses to be served. Event-driven campaigns will match specific products or pre-approved offers to individual customers based on predictive scores. For example, a customer conducting a routine ATM transaction may receive the personalized offer of the mutual fund product during the processing time required to complete the transaction. Over time, smart cards and electronic commerce may limit the role of the ATM in retail delivery. But given the realities of infrastructure investment and behavioral change, that day is some years off. In the meantime, ATM transactions will present billions of sales opportunities. Craig Metz Director of marketing BankSouth Corp., Atlanta I would say no. I believe that ATM marketing has not reached its peak. We cannot just look at ATMs, but also the total distribution solution and what role different solutions will have. Today, when people think of ATMs, they think about making withdrawals. The question is how do we get them to do other transactions. We use marketing and pricing techniques to get people to combine different solutions. This makes it more profitable for us as bankers, and useful for consumers. You will see ATMs begin to lose their usefulness when there is more electronic direct deposits of paychecks, PC-based money transfers, and a universal use of smart cards in the home. And it's going to happen faster than we think. Smart cards will penetrate the United States market in the next five years, but I don't think we will lead that market. The Europeans and the Japanese are ready and will beat us to the draw. People talk about better technology and making self-service kiosks work, but they never talk about what is necessary to change the consumer's behavior to take advantage of this technology and how do we market it. Richard P. Yanak President, Infinet Payment Services Inc., Hackensack, N.J. I think that two things are happening that really add value to the ATM- access as a marketing device. First, institutions are increasingly placing ATMs in off-premise locations, such as supermarkets, retail chains, and universities. Identified by their financial institution name, the ATM enables a bank to reach out into communities where they may not have a physical branch presence. That deployment of ATMs has a marketing value - and it works. Secondly, institutions are adding many new services to the ATM capabilities. For a long period of time - almost 20 years - ATMs were primarily cash dispensers. Now, as new features and functions are being added to newer generation machines, customers are able to do more than just withdraw cash. They can now make payments, obtain postage stamps, obtain pre-paid telephone cards, etc. Financial institutions have been able to come back with marketing initiatives, but there is a certain amount of pressure to expand the range of services. The range of expanded transactions and services available at some banks, like Citibank, may have in excess of 50 transactions. This represents a marketing thrust. While in fact banks may be motivated primarily to gain revenue, provide cost-savings, and fee-income, these machines offer more services and a greater prominence of the bank's name. Thus, they are also marketing tools. Those who have been close to the ATM business were surprised to find out the number of ATM installations has not leveled off in recent years. Instead there has been a resurgence beyond what we expected to see. It is true that if you do not offer ATM access, you are at a marketing disadvantage. I would guess that 50% of all new account depositors will go to an institution that offers ATM access in contrast to one that does not - and there aren't many who do not offer it. Stephen S. Cole President, Cash Station Inc., Chicago Absolutely not. ATMs have been underutilized as a marketing tool in the advertising medium. However, in the future you will be seeing the push for more products on the ATM like purchasing pre-paid phone cards and stamps, and accessing mutual funds. Many institutions have been aggressively deploying ATM marketing for the past year. The Cash Station network has already announced a deal with Ameritech where we will sell pre-paid phone cards. The reason why ATM advertising has been underutilized is that it is not yet an effective revenue generator. There may be other advertising mediums that already promote the bank, its products, and advertisers who want to be noticed. With the increasing proliferation of cable television into American households, where someone can access hundreds of channels, it makes it increasingly difficult to figure where the customers are getting product information. However, given the fact that we generate about 150 million transactions per year, we will be surprised if advertisers do not jump at the chance to promote their products via ATM screens. But I cannot predict when it will happen. Daniel E. Engel Vice president, network director, TCF Bank, Minneapolis We are limited in the amount of marketing via ATM by state law. We cannot do any marketing of the bank's services to other banks' customers via the ATM screen. We do cardholder recognition to identify and market to our own customers. When they stick their card in, we may say something specifically to them - "Get a home equity loan or an IRA" - but we're prohibited from advertising our products to another bank's customer who might be using the ATM. The law, passed in the early 1970s, was created to protect smaller banks that didn't want large banks with all the capital cornering the market and putting ATMs everywhere. One of the concerns is that this would give larger banks a marketing advantage, and the fear was that the large banks would steal customers from the small banks who couldn't afford to match their
