WHAT EFFECT are nonbank players having on the automated teller machine network marketplace?

PAUL BOUSHELLE

Executive vice president

First Security Bank of New Mexico

Albuquerque

I AM REALLY CURIOUS HOW LONG IT will be a successful venture for nonbank players because of the following: When automated teller machines first started, banks had proprietary ATMs of their own. Then we decided we'd share among ourselves because it was good for our customers to have more outlets. We started charging the customers to use foreign ATMs and it wasn't very long before 50% of the transactions at any given ATM would be considered foreign transactions.

Over the last three years, the percentage of foreign cardholders at our machines has quickly dwindled. Customers realize that every time they went to a foreign machine, their banks were charging them. Some of them decided, particularly in areas that have a lot of ATMs, that going to a foreign ATM was not very smart if you could walk across the street, use your own bank's machine, and it would cost you nothing.

WILLIAM O. ADCOCK JR.

Chairman

Synergistics Research Corp.

Atlanta

THE KEY COMPETITIVE FACTORS ARE the functions that you drive through the system and the value you associate with the card. The banks and other financial providers that are going to drive unique differentiated functions through their networks will continue to have a competitive advantage.

Financial service providers add a lot of value to their card base through debit functions, through prepaid options, through smart-card technology. From a marketing standpoint, it's going to be a question of how well you utilize the network that is out there.

Do you offer services that your competition doesn't offer? If customers can access mutual funds, negotiate sweeps, or perform some fee-based, nonfinancial transactions through your proprietary automated teller machines or uniquely through a network, that's a benefit. If the competition doesn't have the software or the systems engineering to compete, then you've got some competitive differentiation.

CATHRYN BOND

principal

C. Bond & Co.

Cater, N.C.

IT'S TERRIFIC FOR THE CONSUMER.

It's impacting automated teller machine users who are already sold on using ATMs. They are beginning to recognize that they almost don't have to look for ATM s anymore. The ATMs are finding them. That is a big bonus for consumers.

ATMs are popping up in unexpected places. I live in North Carolina and discovered a couple of malls where there were two or three ATMs. I thought that was interesting because for the longest time when somebody put one ATM in a mall, all the rest of the bankers said, "That mall is taken." But now bankers are thinking, "Ws a big mall and it can use more than one ATM."

What we are discovering is that ATM's are showing up as frequently as rest rooms. It's a convenience that people need. In terms of services, we've got bathrooms, we've got water fountains, and now we've got ATMs.

PHILIP S. CORWIN

Director of retail banking

American Bankers Association

Washington, D.C.

MORE AUTOMATED TELLER MACHINES are a convenience for bank customers and will increase usage of ATM networks. There are a very small number of nonbank players. The vast majority of ATMs are owned by depository institutions and will continue to be, in our opinion. While there are a small number of machines owned by nonbanks, ultimately, these machines are facilitating customers' access to their bank accounts. We don't perceive it as a problem and we certainly haven't heard any concern from our members at this point in time.

SABRY J. MACKOUL

Senior executive vice president

UJB Financial Corp.

Princeton, N.J.

FROM THE CONSUMER SIDE, nonbank competition offers further convenience by having more locations available - even though some might say that certain locations are saturated. From the industry's point of view, it will keep us on our toes. Competition "sharpens our pencil" for better pricing - especially for off-site automated teller machines. I think that is going to be a growing aspect of the marketplace outside of the traditional branch ATMs. From UJB Financial Corp.'s point of view, we welcome the competition. But at this stage, we don't see loads of vendors offering this service and penetrating our marketplace.

RALPH REICHARD

President - commercial banking

Newtrend

Orlando

NONBANK PLAYERS WILL FORCE banks to move quickly to add innovative services to their automated teller machine networks; otherwise the bank's customers may do business elsewhere. In the case of ATMs, banks already have the infrastructure in place and this is an advantage. More banks will begin to do innovative things like enabling customers to apply for loans at the ATM center. I can see a customer coming in wanting to get a $35,000 boat loan and using the ATM to determine if he or she qualifies and if not, then determining what loan level based on that individual's personal criteria would work. The ATM would be where they could "play" with information before dealing with a loan officer. Innovative services like that will be more prevalent.

ALANNA KELLOGG

Vice president

Boatmen's Bancshares

St. Louis

WE THINK THAT BANKS HAVE A natural advantage when retailers are looking for someone to place automated teller machines in their stores. It's because we have a customer base that is very loyal to us and because of the pricing incentives with the ATM transactions, we can bring more customers into their stores. We haven't found competition from nonbank players to be an issue.

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