How Can Stationary Kiosks Thrive in a Mobile World?
Credit unions are giddy about a new NCUA rule that says advanced video terminals can be counted as full-fledged service facilities, providing a new way to compete with banks by attracting members in underserved areas.
Mobile devices and apps pose a threat for traditional banking hardware like ATMs; in theory one day we'll pay for most items with a tap of a phone, eliminating the need for cash. Manufacturers of self-service machines are trying to stay relevant by integrating with mobile channels.
Executives from three self-service firms — NCR (NCR), Diebold (DBD) and uGenius — discussed their strategies during interviews with American Banker on Thursday in Washington, D.C. NCR is adapting self-service concepts from airlines' mobile ticketing technology to its bank clients' needs. Diebold has developed a software-as-a-service (Saas) delivery model to allow banks to quickly upgrade machines to accept mobile authentication for ATM transactions, and uGenius plans to extend its video teller services to mobile channels.
"You have the whole population using mobile. Providing access and a level of service will determine how [consumer] behavior changes for you," says Bob Tramontano, vice president of self-service at NCR.
NCR recently unveiled new software that allows consumers to initiate cash withdrawals from their bank accounts on mobile devices and then finish the transaction at an ATM by scanning a 2D barcode on the ATM's home screen. Consumers authenticate transactions through their mobile banking application, and can use any iOS or Android smartphone. Tramontano, who added that mobile deposit capabilities are being developed, said the strategy borrows in part from NCR's experience in other industries such as airlines. NCR's airline ticketing app optimizes elements from an airline's website for mobile devices, enabling check in, flight status updates, reservation modifications, seat selection, and frequent flier management. Once the passenger checks in via the mobile device, NCR sends an encrypted barcode that's compatible with airport scanners and boarding gate readers.
He also said the ATM software upgrades are designed to reduce disruptions in ATM machine replacement cycles, which can be longer than development cycles for ATM functionality, by allowing features to be turned on or off remotely. "We have found that banks tend to keep ATMs for about seven to ten years," Tramontano said.
Diebold has also introduced new "cardless" ATM transactions. Consumers scan a Quick Response (QR) code on the ATM and enter an authentication code to initiate withdrawals and deposits. The smartphone is used as an authentication device, which Diebold says reduces security risk related to lost cards, stolen cards and skimming. The Saas hosting model is designed for faster upgrades to ATM fleets at a lower upfront deployment cost.
"Banks are struggling with location-based channels," said Jerry Verdi, vice president of market intelligence for Diebold. "How do we [expand] self-service in branches in a world in which the transaction device increasingly sits with the individual?"
Diebold has been upgrading its Opteva line of ATMs with virtualization technology that allows machines to be updated remotely by a centralized data center. Diebold contends its Opteva line of ATMs are configured to quickly add new digital transaction capabilities.
Diebold is also a development partner with FIS, which is piloting "cardless cash access" feature for FIS' mobile wallet. Robert Unser, senior director of bank retail enterprise for Diebold, on Friday said the partnership includes Diebold's Agilis software, but the details of how it will be implemented are still in development. That includes the security protocol, though Unser said it will not be a one-time PIN. FIS on late Friday said that FIS and its technology partner Paydiant built an app that authenticates a user from the smartphone and interacts with an ATM by scanning a secure QR code from the screen. The customer initiates the process by selecting Mobile Cash Access from the ATM main menu screen. On the smartphone, customers select which eligible account they want to draw the cash from, select a dollar amount and an eReceipt is delivered to the smartphone app after cash is dispensed.
As part of its branch automation strategy, Diebold is also encouraging use of two-way video, in which consumers can get service or advice from centralized customer service reps. The company believes this is a way to migrate more people to use complex cross-channel self-service. As people use video, they in become more comfortable with digital channels. "The branch can't be an impediment to self-service," Verdi says.
Video's also a big part of the game at uGenius. The firm has deployed its video teller technology, in which customers engage in web video chats with tellers at centralized locations, at a number of institutions as a way to enable smaller branches, branches in remote locations and to extend hours or existing branches.
The firm is now looking to extend that remote teller technology to mobile devices, and has begun deployment at Defence Bank, a financial institution based in western Australia. Consumers at Defence will be able to similar remote access teller services to what's available at the kiosks, further the remote banking strategy "If you can't get to a branch or if you're shopping and want to reach a bank teller, you'll be able to," said Gene Pranger, CEO of uGenius.