Academic journal article ABA Banking Journal

A Billion Here, a Billion There

Academic journal article ABA Banking Journal

A Billion Here, a Billion There

Article excerpt

Last year banks and thrifts spent $20.8 billion on information and communications technology, according to the Mentis Corp. Did we get our money's worth?

I've been thinking about this lately, particularly after two experiences, one in Atlanta and another in San Francisco, when I wasn't able to obtain cash from an ATM. Now, my minor difficulties at the ATM don't represent a technology problem on the scale of, say, hackers invading the Internet or international criminals laundering drug money through banks. The result for me was pretty simple and straightforward. I didn't get my money.

But the two ATM incidents caused me to wonder how such experiences affect our customers. Do they shrug off these minor frustrations as quirks in technology, as when a vending machine refuses to vend? Or do they curse the machine, disparage the bank and consider moving their business to another institution?

Actually, the industry is doing a credible job of keeping its ATMs in good working order. Average industry-wide ATM downtime for maintenance and repair is about 11-12 minutes per day, according to the ABA's 1995 National Retail Operations & Automation Survey Report. On average it takes only about 30-45 minutes to repair a malfunctioning ATM.

Still, I'm concerned that as we send more of our customers to ATMs, telephones and PCs to do their banking, we're opening ourselves up to a whole new variety of dissatisfied customer, and one we may not hear from very often. Guerilla Marketing Newsletter reports that the average business hears nothing from 96% of its unhappy customers, and each unhappy customer tells at least 9 other people.

Many banks are encouraging their customers to use the ATM and other technology to do their banking. Some are opening automated kiosks. Others have implemented teller fees on certain accounts or created incentives for customers to use ATMs or some other form of electronic banking--anything to get them away from those more costly teller transactions.

But if we're sending our customers to the ATM and encouraging them to use the telephone or the PC in increasing numbers, we had better make certain they work. The advent of smart cards and other new forms of electronic commerce, such as use of the Internet, will only raise the bar higher.

If our customers lose confidence in our technology, how long will it take for them to lose confidence in us? …

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