Hard-Core Enthusiasm for High-Tech ATMs

  Thanks to increasingly sophisticated technology, consumers today have the ability to perform more and more banking functions on automated teller machines. But getting them to take advantage of the machines' capabilities is a different matter.
  That dichotomy came to the fore late last year, when a Visa survey came out suggesting that consumers are not interested in more services being available at ATMs (box, page 17). Even many banks aren't sold on all the new bells and whistles. But at the Bank Administration Institute's Retail Delivery Conference and Expo 2003 in November, most vendors seemed optimistic about the market potential for enhanced ATMs.
  Perhaps the hottest multifunction products featured at the New Orleans conference were ATMs that can handle deposits without the need for envelopes. Dayton, Ohio-based NCR Corp., North Canton, Ohio-based Diebold Inc., Frisco, Texas-based Fujitsu Transaction Solutions Inc. and Germany-based Wincor Nixdorf Inc. each demonstrated ATMs that image checks, accept cash and place pictures of deposited checks on receipts.
  Next October, provisions of a new law dubbed Check 21, for the Check Clearing for the 21st Century Act, go into effect that give digital check images the same legal status as the original paper. With that date less than a year away, financial institutions will deploy new ATM check-imaging technology at a pace quicker than some studies would suggest, predicts Robert Tramontano, NCR vice president.
  Tramontano notes that 80% of basic banking transactions do not take place at branches but at ATMs and other channels. Enabling customers to view their deposits and get check images on their receipts will be a compelling way to improve customer service, he says.
  Chicago-based Bank One Corp. may be one of the first banks to offer widespread check imaging. Chief Executive Jamie Dimon told attendees during a keynote speech that the bank plans to refurbish all of its ATMs in 2004. Bank One deploys some 3,700 ATMs nationwide.
  Dimon did not say what the refurbishing would include. But Bank One reportedly is pleased with the customer response in its check-imaging pilot. "(Bank One is) latching on to check imaging more than most banks," says Tramontano.
  Boston-based FleetBoston Financial Corp. and Wells Fargo & Co. also are conducting ATM check-imaging tests.
  Saul Caprio, Wincor Nixdorf's marketing director in the U.S., says the rise of ATM software that uses open-source programming language, which all major ATM makers now offer, enables deployers to use imaging software regardless of the ATM brands they use.
  "Virtually every bank is interested, and they are trying to sort through the best ways to do it," he says.
  Check imaging enables banks to give customers faster access to funds deposited at ATMs because the institutions do not have to physically pick up deposits daily to verify whether checks or cash are indeed in the deposit envelopes. However, the results of a recent survey by the Washington, D.C.-based Independent Community Bankers of America indicate there is a soft demand for check-imaging ATMs among small and medium-sized banks.
  Of the more than 1,000 community banks surveyed, 53% indicated they were using check imaging, but primarily for archiving, signature verification or other back-office functions. Only 4% indicated they were using check imaging for transaction-verification purposes, which is the way it would be used on ATMs.
  Dewite North, the survey report's author, says while small banks are investing in new technology for other parts of their operations, many have little desire to invest in new ATM technology because they outsource their ATM operations to a third party.
  Check imaging is not the only technology being added to ATMs. Some vendors also are promoting the dispensing of prepaid wireless-telephone time or tickets for sports events. Boston-based Boston Communications Group Inc. is promoting its Wireless Wallet prepaid wireless top-ups on ATMs and is now marketing to banks instead of to off-premise, nonbank deployers. Banks have a much greater ability to promote to their own customers than do ATM independent sales organizations, notes James Anderson, Boston Communications vice president. Anderson says about 200 off-premise ATMs that began offering prepaid wireless minutes have had disappointing results during the past year.
  As a way to market the prepaid concept to large-bank deployers, Boston Communications recently formed a partnership with Omaha, Neb.-based ACI Worldwide. ACI, which produces the Base24 transaction-processing software, will offer its bank clients a Base 24 module that enables ATM deployers to offer the Wireless Wallet with no start-up cost, says Anderson.
  Some of the emerging technologies are not geared around generating revenue for the deployer. Fujitsu, for example, is partnering with Philadelphia-based Nova Savings Bank to offer ATMs that dispense Villanova University basketball tickets.
  Nova is using four Fujitsu Series 8000 ATMs, which use Prism 1:1 open-source software, to link to Villanova's database that holds the 1,500 names of the student-lottery winners who are picked before each game to receive free tickets. The ATMs dispense the tickets when students insert their school identification cards, says Brian Hartline, Nova chief executive.
  Though Nova is footing the bill for the ATMs and gets no surcharge revenue for the service, it hopes to supplant Charlotte, N.C.-based Wachovia Bank N.A. as the university's main ATM provider, says Hartline.