Magazine article American Banker

Banks Hardly Rushing to Noncash Video Kiosks

Magazine article American Banker

Banks Hardly Rushing to Noncash Video Kiosks

Article excerpt

Since May, consumers in Seattle have been able bank through noncash kiosks set up by Washington Mutual Savings Bank.

Two stand-alone terminals, each installed in separate Fred Meyer's discount department stores, let customers dial up a bank customer service representative and communicate via video link. Services offered in this pilot program include account openings, balance and rate inquiries, and loan applications.

The experiment - and more advanced projects - have gotten much attention in the last few years. Noncash terminals are said to be a relatively inexpensive way to provide services for which consumers traditionally have visited branches.

For all the talk, few institutions have actually installed noncash terminals, according to industry observers and research firms.

"The industry's in a holding pattern on this right now," said Stan Wandowicz, financial systems consultant with Olivetti North America, "but we don't expect that to last for long."

A recent survey of 11,267 institutions conducted this spring by Mentis Corp., a consulting firm in Raleigh, N.C., showed only 0.3% of banks using noncash kiosks. And of the rest, only 0.7% had plans to purchase them in 1996.

The reluctance of banks to purchase the kiosks is surprising to some. After all, automated teller machines usage rates demonstrate that consumers are comfortable with self-service banking.

Consultants said the cost of noncash kiosks may have scared off some banks.

Price tags range from $20,000 to $40,000 per terminal, and the high speed communications lines needed to link the terminals to the bank can cost even more.

"It's a heavy duty research and development commitment," said Liam Carmody, partner at Carmody & Bloom Inc., a consulting firm in Woodcliff Lake, N.J. "Some of the earliest experiments were fun, but they didn't work very well. …

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