Vowing to put movie previews and news flashes on most of its 6,300 automated teller machines by yearend 2001, Wells Fargo & Co. on Tuesday made the first unequivocal commitment to bringing Web technology to the once-mundane business of dispensing cash by machine.
The San Francisco banking giant has allied itself with MSNBC.com and the film studio DreamWorks SKG to deliver ticker-style headlines and movie previews on redesigned ATMs, and it says that 800 of the enhanced terminals will be available this year in California and Arizona. The machines will sport pull-down menus and full-motion video.
Internet technology has been available for ATMs for the last few years, but banks and other deployers have been wary of using it, afraid that it might lengthen lines and thus defeat the ATM's original premise: fast access to cash. Wells Fargo executives say they are acutely aware of transaction times and have designed the machines to display advertising when customers are walking to and from the machine or waiting for transactions to be processed.
Robert Chlebowski, executive vice president of Wells' distribution strategies, said the move reflects the bank's commitment to integrating the Internet into all that it does.
"Our new Web-enabled ATMs are street-corner portals to online information," he said. "The theme is Webification of the bank, and the use of that technology to drive a common customer experience across all channels."
Other big banks, including Royal Bank of Canada and Canadian Imperial Bank of Commerce, have dabbled in Web technology, but Wells is the first to make a broad commitment to using the Internet for news and advertising. MSNBC.com and DreamWorks will pay Wells for the exposure, a Wells spokesperson said. Those fees were not disclosed.
Wells Fargo may well let other advertisers buy space. Web technology lets the bank post ads and cross-sell bank products without the complex and expensive task of recoding the relatively arcane software that runs most ATMs. AT&T and Compaq, which already advertise on some Wells ATMs, have expressed interest in the new project. Through the alliance with MSNBC.com, a joint venture of Microsoft and the broadcaster NBC, Wells will provide headline, business, and sports news and update it every 30 minutes. The features will be free to customers.
A small portion of the screen will feature bank promotions to appear while customers make transactions. Mr. Chlebowski said Wells will probably add capabilities to the ATMs and predicted that two distinct ATM models would emerge over the next five years: a cash-on-the-street machine and a souped-up Internet kiosk.
ATM deployers such as American Express Co. and E-Trade Group Inc. have focused on using Internet technology to add more advanced banking and brokerage functions, and have said that other e-commerce applications would follow.
"This is really the promise of Web-enabled ATMs finally coming to fruition," said Les Riedl, senior vice president at Speer & Associates, a consulting firm in Atlanta. "The beauty of it is that it is totally passive. It doesn't really require the consumer to do anything."
Mr. Riedl said Wells will particularly benefit from new advertising revenue, a welcome addition in an industry adjusting to the prevalence of ATMs, which has caused transactions per machine and banks' income per machine to decline.
Mr. Riedl said advertising may be the "killer revenue-generating application" that will finally give banks an incentive to make wide-scale upgrades to their ATM fleets.
Ann Schmitt, a director at Dove Consulting in Boston, said advertising revenue is a secondary benefit. "They're really positioning themselves as a portal and an aggregator for financial information for customers," she said.
The banking company is "getting out in front of the power curve on this," Ms. Schmitt said. "I think it is certainly going to be a customer acquisition tool for them They are now establishing many more points of presence for a broader Wells Fargo experience."
