Academic journal article ABA Banking Journal

Customers Coming around to Kiosks?

Academic journal article ABA Banking Journal

Customers Coming around to Kiosks?

Article excerpt

Maybe the tipping point occurred when all the business travelers arriving at the airport made a beeline for the kiosks to obtain their boarding pass instead of waiting in the "slow lane" at baggage check-in, one ATM executive muses.

Perhaps it occurred when customers realized kiosks had the potential to give them back some control in the venue where they did their banking.

Americans aren't as tolerant of lines as Asians and Europeans, and anything that is a "line buster" has a chance of taking off, says one analyst. Self-service elsewhere did the hard work of making the concept known and acceptable.

However it occurred, the kiosk--heretofore a spotty and low-energy presence in the branches of a few pioneers-will get a higher profile in the near future.

Glen Fossella, vice-president of marketing, Source Technologies, Charlotte, N.C., says he noticed an increase in demand for information about kiosks over the last year. Several banks will have pilots staged this summer.

Community banks and credit unions have different ideas about what the kiosk can do for them. Some seek to use the device as Source Technologies envisions it--a teller-assisted unit that allows one teller to oversee multiple kiosks and complete customer-started transactions when necessary. (Some banks, like Washington Mutual, have cash dispensing devices complete the transaction started by the teller.) Other vendors offer kiosks that allow customers to take care of check ordering or bill paying--or to simply sign up for bill paying services.

Tim Kearns, director of marketing, MontegoNet, Portsmouth, R.I., says that the banks he's worked with want a higher yield from their internet investment.

"Putting internet access in the branch gives banks a venue to demonstrate the value of the service," says Kearns.

"It provides an easy customer sign-up and has helped to boost billpay service rates at certain community banks," he adds.

Bank of Newport, Rhode Island, and Westborough Bank are in the small but growing group of kiosk enthusiasts, according to Kearns.

Whatever the plans for the kiosk in banks, their numbers overall are starting to add up. Summit Research Associates, Rockville, Md., says that 735,000 self-service kiosks are in use worldwide, up from 400,000 a few years ago. Summit believes that 1.5 million units will be in use by 2008.

Early trials miss the mark

The transactional kiosk is a case of a not-so-new idea attracting a serious second look. A vendor push to create demand for these customer service devices in the branch and at check cashing locations began about five years ago, says Sam Ditzion, president and CEO of Tremont Capital Group, a Boston-based consultancy that specializes in the ATM industry. (Many vendors have been in the space ten years or--in the case of vendors like Diebold--even longer. ) Cost cutting and productivity were the drivers, says Ditzion.

"All the big players got involved in a series of costly projects," he recalls. "At the time, kiosks targeted to customers were placed in the branch and kiosks aimed at the unbanked were put at the check cashing facilities or in convenience stores."

The effort mostly flopped, Ditzion says, because the units were expensive, not very intuitive, and some manufacturers' devices were prone to breakdowns.

"The economics weren't right and people weren't ready," he says.

Kiosk drivers now

This time around, the technology has vastly improved and can be delivered at a lower price point. Years of internet development mean that bank vendors are better at developing interfaces with logical workflow that can help a customer identify himself, make a cash deposit as well as depositing several checks without breaking a sweat.

Moreover, Check 21 allows images to be transmitted instead of paper, further lowering costs. Also, a standard called XFS allows a bank to work with many vendors and have a standard way to handle servicing and application upgrades. …

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