Automated teller machines have a role in the investment products business of banks, but it is a far smaller role than some visionaries had foreseen.

Just five years ago, some pundits predicted customers would use the ubiquitous machines not only to make deposits and withdraw cash, but also to make investments in mutual funds.

After a sober examination of the facts, however, most bankers have determined that the machines aren't suited to selling the complex instruments. Instead their machines are used for simpler, less time- consuming functions, such as checking mutual fund balances and stock prices.

"After people thought about it for a while they realized this is an upscale product and an ATM is not that kind of terminal," said Michael Harris, senior vice president at Speer & Associates, Atlanta. Most people would not want to spend the time at an ATM needed to buy a mutual fund, he said.

One major exception to the rule is Citicorp, which refers to its machines as "customer activated terminals."

The New York money center allows its customers to buy and sell securities and choose from 3,000 mutual funds at any of its Citicard machines, a company spokesman said.

When a fund is purchased, the machine tells the customer the product is not federally insured, and orders a prospectus to be mailed to the customer.

Fees for stock purchases via Citi's ATMs are discounted 10%, the spokesman said. There is no such discount on mutual funds, and some funds come with a transaction charge when bought at a machine. Citi's machines have sold stocks since 1993 and mutual funds for a year and a half.

But some experts argue that lengthy sales transactions defeat the machines' purpose.

ATMs were originally created to push through large volumes of customers, said Speer's Mr. Harris. Electronic kiosks in branches and the Internet are better suited to such transactions than ATMs, he said.

Fleet Financial Group and Wells Fargo & Co. offer limited mutual fund services at their ATMs, thus keeping the transaction time down.

Customers of both banks can move money between bank accounts and proprietary funds. Fleet allows access only to its Galaxy money market funds, and Wells allows transactions with all of its Stagecoach funds at the machines, according to spokesmen at both companies.

While modifying funds at a machine is not as complex or intimidating as purchasing one, there is still potential for error when transferring money between mutual funds and bank accounts, said Alan Pohlman, executive vice president at Carmody & Bloom Inc., Ridgewood, N.J.

When nonbank competitors made it easy for customers to get price quotes and buy funds over the telephone, it made this business more difficult for banks, Mr. Pohlman said. But banks should remember the limits of the teller machines, he said. Getting stock quotes is a better use of ATMs than buying funds, Mr. Pohlman said.

And what the banks had forgotten is that many people want to talk to a person when buying an investment product, said A. Christian Fredrick, a consultant at Dove Associates, Boston.

Simple transactions are still the best use for the machines, Mr. Fredrick said, pointing out that 80% of ATM transactions are withdrawals.

And people withdrawing cash don't want to be stuck in line behind someone buying a mutual fund at a machine. "You can get so gaga over self- service," Mr. Fredrick said, "that you lose sight of what the consumer wants."

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