Bank executives who oversee ATMs view the channel as a "differentiator" in terms of enhancing the customer experience and are exploring ways to introduce additional advanced features such as personalization and targeted marketing and messaging, a new report suggests.

Aite Group LLC recently conducted an online survey of ATM channel executives at 20 of the top 150 U.S. financial institutions. Overall, those executives managed some 55,902 machines.

Despite bank executives' desire to develop a more complete customer service experience via the ATM, economic uncertainty and the cost of upgrading to new equipment continue to present challenges, according to the report.

Only 12% of respondents say their ATMs are integrated with their respective banks' customer relationship management and marketing customer information file, according to the report. Some 17% of executives indicated their online banking channel is integrated with this file.

ATM executives also are focused on ensuring that their fleet is compliant with new provisions of the Americans with Disabilities Act, the survey suggests.

U.S. financial institutions are upgrading ATMs to meet the law's requirements by adjusting machine heights for wheelchair access, adding raised symbols on keypads and placing headphone jacks for voice-guided instructions on how to use the machines for the blind. ATM deployers and financial institutions must comply with the law by March 15, 2012.

Ninety percent of respondents said maintaining industry compliance is a top priority, the report says. Some 85% of respondents indicated risk-management also is a key priority, specifically combating crimes associated with ATM-skimming and fraudulent deposits. Some 63% of respondents indicated upgrading ATM hardware and software is a top priority.

The high cost of maintaining the ATM channel combined with a faltering economy has prevented banks from completing overdue fleet-upgrades, the report suggests.

About 18% of banks still have ATMs that are 10 years or older, according to the survey. And 16% have machines that run on the legacy OS/2 computer operating system, which is more than a decade old.

Aite recommends that bank executives take a full-service approach to ATM management.

"Banks are overlooking opportunities to enhance their ATM channel and cut costs through an expansion of the bank's ATM outsourcing strategy beyond ATM processing," David Albertazzi, Aite's ATM and bank-channel analyst, writes in the report.

This approach will provide banks with a cost-effective way to upgrade to the latest ATM technology and enhance overall operational efficiency, he writes. "This includes hardware leasing, performance management, servicing, and cash replenishment management," Albertazzi continues.

Aite advises that ATM industry executives aim to get a better understanding of transaction costs within the ATM channel and equipment-related costs. "Few executives were able to share deposit pick-up costs or distinguish between cash deposits and check deposits," Albertazzi writes.

Understanding these costs will enable bank executives to be more selective in deciding which features and functions to focus on when upgrading hardware and software at the branch level, he contends.

Aite recommends that vendors respond to ATM executives' concerns by enhancing products, including beefing up security for online and mobile banking via expanded partnerships and better systems-integration.