heeled travelers stranded in the middle of a desert, alongside a broken- down vehicle? They are escorted to civilization by a boy pointing and hollering what sounds like "AY-tienne, AY-tienne." Eventually, the couple are led to an ATM, where, presumably, they withdraw the cash to rescue their vacation. In depicting the ATM as an electronic savior, the advertisement cut to the heart of an industrywide thrust to change the way consumers think about the machines. Long regarded as dowdy cash dispensers, bankers and consultants say, ATMs are breaking out of the box, expanding their functions, and migrating to exotic locations. Machines that speak languages from Spanish to Swahili, or provide special access to the disabled, are old hat. Today's ATMs cash checks, dispense concert tickets, coins, and coupons, provide mortgage applications, sell mutual funds, play music, and run video games. They are turning up at tourist attractions, sports arenas, retail locations, and even on pleasure boats. In expanding their functionality, the once-prosaic machines are fast becoming the linchpins of an expanding electronic banking network. And because of a confluence of new technologies - such as smart cards - and the incessant demand of consumers in the information age for banking convenience, ATMs, thought by many to be a mature business, may be poised once more to defy the laws of market saturation. Some experts sound a cautionary note: that banks are straying too far from the ATM's primary purpose, dispensing cash. Generally, more features mean less cash and longer lines, said Richard T. Robida, senior executive vice president of Atlanta-based Speer & Associates. But in the rush to gain coveted fee income and reduce the costs of customer service at brick-and-mortar branches, pragmatists are being drowned out by multifunction enthusiasts. "The market is becoming more demanding," said Ernesto O. Gonzalez, senior vice president of sales and financial administration for $1.8 billion-asset BankAtlantic, which recently installed ATMs on ships operated by Carnival Cruise Lines. "People expect cash and other options available at ATMs wherever they go." "Multifunction machines signal that banking can be fun, exciting, even entertaining," says Stephen A. Cone, marketing executive at Cleveland-based Keycorp, which has installed high-octane ATMs at the recently opened Rock and Roll Hall of Fame, and in Seattle's renovated KeyArena, home of the National Basketball Association's Seattle Supersonics. "For us, they make the point that Keycorp has a personality - that we're not some faceless institution plunking down money on meaningless technology." In an era of ATM innovation, $68 billion-asset Keycorp - the nation's 11th-largest banking company - ranks among the industry leaders. Forsaking banking's traditional button-down image, Keycorp and its affiliates nationwide are launching a broad-based marketing campaign, seeking to convert to electronic banking baby boomers and the 20-something members of Generation X. Clearly, such grand schemes won't come cheap: Keycorp paid $2 million for the right to have a 65,000-square-foot plaza outside the Hall of Fame bear the name Key Plaza. And in an agreement to rechristen the 17,000-seat Seattle Center Coliseum as KeyArena, the bank anted up a whopping $15 million. The Hall of Fame ATMs in Cleveland are customized to look and sound like jukeboxes. While processing transactions, they play a handful of rock hits, including "Taking Care of Business." A video character, named "Rock Pierre," introduces users to the machines, which are programmed to use four languages: English, Spanish, German, and Japanese. The diversity is intended to make the machines easier to use for the tourist groups expected to flock to rock's newest Mecca. "The machines symbolize our philosophy that banking should fit into its environment," says Keycorp's Mr. Cone. The machines at KeyArena take the entertainment concept a step further, offering video games, big-screen TV, and a Max Headroom-style hostess, Maxine Pixel. But they also underscore how newfangled ATMs can be customized for local markets, Mr. Cone says. From a television perch above a cash machine, Ms. Pixel may taunt passersby: "Hey, you, put down that double decaf, latte, mocha, frothing, wonderful nonfat thing you're drinking"- a reference to Seattle's unofficial status as the coffee-drinking capital of North America. While not as self-consciously hip as the Keycorp ATMs, BankAtlantic's cruise ship machines offer an effective platform to extend brand recognition, in addition to boosting fee income, said the bank's Mr. Gonzalez. Though he declined to comment on the specifics of the bank's arrangements with Carnival, experts maintain that ATMs in nontraditional locations, such as airports, attract a much higher percentage of "foreign" transactions - those from customers of other banks. Such transactions generate fees of up to $1 per withdrawal and sometimes more. The host bank typically divides an ATM fee with the operators of the site where it is placed. The BankAtlantic machines - installed on four Carnival ships thus far - posed unique technological challenges, Mr. Gonzalez said. The ATMs were installed by AT&T's Global Information Solutions, a leading ATM supplier. Through satellite communications equipment and compression technology developed by Maritime Telecommunications Network, the machines are linked to shared national bank networks, offering the same transaction services as onshore ATMs. In essence, transactions ride piggyback on a ship-to-shore communication system already in place throughout the nine-ship Carnival line. BankAtlantic plans to outfit the remainder of the fleet by year's end. Onshore, as the ATM marketplace becomes increasingly congested, BankAtlantic and other institutions are striking relationships with national retail chains, including Wal-Mart. BankAtlantic operates 150 ATM sites at Wal-Mart and affiliated Sam's Club locations throughout Florida. The bank also operates full-service branches at four Wal-Mart supercenters throughout the state. Wal-Marts are "high-traffic locations," Mr. Gonzalez said, adding that while BankAtlantic's machines currently offer cash-dispensing services only - with deposit-taking abilities at some sites - it is exploring other functions, including a more sophisticated graphics software package and the possibility of dispensing coupons good for merchandise discounts at the Wal-Mart site where an ATM is based. He said, for example, that the bank has discussed an arrangement with AT&T that would offer a discount on telephones and possibly long-distance services. St. Louis-based Boatmen's Bancshares also has an ATM deal with Wal-Mart, as well as machines positioned on casino boats on the Mississippi River. BankAtlantic has assets of $1.8 billion, with 38 banking offices in Broward, Dade, and Palm Beach counties, and some 220 ATMs throughout the state. Mr. Gonzalez described the Wal-Mart deal as an example of the way ATMs can function as a cost-effective, advance guard if the bank decides to expand its full-service, brick-and-mortar sites throughout the state. In another example of ATM convenience, New York-based Chemical Bank's Bank at Work program provides services as a convenience to corporations and their employees. At 52 ATM sites and roughly the same number of full-service teller sites, the aim is to provide cash advances, stamps, travelers checks and smart cards for public transportation in the New York area. A more ambitious Chemical pilot, Docutel, aims to handle transportation, travel, and event ticketing, leveraging mature self-service technology in areas outside banking, said Patrice A. Hall, business manager for Bank at Work's on-site services. Docutel machines will be positioned at Bank at Work sites, she said, and also at universities, shopping malls, and supermarkets. "You can almost make the analogy of one-stop shopping," said electronic banking's Ms. Winter. "We're segmenting markets to align more closely with our customers and meet their specific needs." Chemical, with $178.5 billion in assets, operates 835 ATMs in the New York tri-state area and another 129 in Texas. The bank processes daily 250,000 "encounters," each representing one or more transactions. Chemical's fees range from zero for its own cardholders doing business in their home region, to 50 cents outside the region, and $1 outside the country. To be sure, there is no shortage of innovation in the ATM business. Citibank is probably the multilingual champ, with machines that "speak" a variety of languages, including English, Spanish, Greek, Korean, and Russian. NationsBank has an ATM on wheels, used for sporting and other special events. Oregon-based U.S. Bancorp, with $21 billion in assets, is planning a pilot allowing debit card holders in closed environments, such as college campuses, to reload value onto their cards via ATMs. Wells Fargo's machines facilitate international funds transfers between the United States and the Philippines. But to what extent will bells and whistles boost transaction volume? "Fancy ATMs can hit a lot of singles, but not home runs," winning points with particular demographic groups but failing to move market share in a big way, said Speer's Mr. Robida. Some banks may be forced to deploy them defensively, he said: "In certain competitive situations - say, positioning yourself for the business of a supermarket chain - a lack of (multifunction ATMs) can hurt you." Rick Comandich, senior vice president and manager of convenience banking at U.S. Bancorp, which operates a fleet of 1,200 ATMs, sees transaction volume growing less through multifunction "fads" than because of a convergence with other technologies, such as smart cards, point of sale, and bank by phone. In a recent study, he said, 400 U.S. Bancorp customers who used teller machines at least four times a month showed a 35% increase in ATM activity after they were given a free check-cashing card. "There was a multiplier effect," Mr. Comandich said, adding that the bank's ATM strategy is inseparable from its strategy for smart cards and other electronic and convenience initiatives. U.S. Bank recently upgraded some of its ATMs to provide mini-statements on credit card purchases, checks, loan payments, and recent machine and other electronic transactions. Ultimately, room to grow also depends on how you measure current transaction volume and whom you listen to. A recent survey by Ernst & Young on electronic banking estimates that 31% of transactions will be done at an ATM by 1997, most of them involving cash withdrawal. That may be conservative. The number of ATM transactions has increased 45% since 1990, to 8.3 billion, according to a report by the newsletter Bank Network News. A joint study by the Bank Administration Institute and First Manhattan Consulting Group shows that 55% of all retail banking transactions take place at ATMs or on the telephone. Mr. Robida counsels most of his clients to stick to the basics. BankAtlantic's Mr. Gonzalez, while enthusiastic about multifunctionality, sees a parallel between the rush to roll out new machines and the indiscriminate empire building of many larger banks in the 1970s and 1980s. "We believe that a benefit will come to those who establish themselves as leaders" in electronic banking, he said. "Certainly, we need to explore any and all enhancements to our products and services. But our (senior executives) still want a cost estimate and return-on-investment analysis. "I come into a meeting with plans," he concluded. "I leave with a better idea of what I need to do to make a project profitable." Mr. McCarthy is a freelance writer based in New York.

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