Coming Next to Your Local Bank: ATMs That Allow Internet Access?
Stock, Helen, American Banker
When it comes to automated teller machines, banks are leery of messing with a good thing.
While the Internet has been lauded for its ability to augment services to consumers, its presence on an ATM may be a bit much. It offers vast new possibilities for ATM services, but also has the potential to interfere with the ATM's original promise of fast access to cash.
Internet-enabled ATMs could let banks offer advanced services such as bill payment and loan processing, as well as nonfinancial ones such as news, stock quotes, and ticket purchasing. But the question remains as to whether consumers really want such service-laden ATMs.
"Consumers have really come to be very comfortable with the ATM channel," said Jeffrey McGuire, director of ATM strategy and development for Canadian Imperial Bank of Commerce. "You play with it at your peril."
Mr. McGuire should know. CIBC was one of the first banking companies in North America to deploy teller machines with Internet technology - and one of the first to back off. The Toronto-based banking company deployed seven "Smart ABMs" (automated banking machines) in the Toronto area in late 1997 in conjunction with NCR Corp., the Dayton, Ohio-based ATM manufacturer; Omaha-based ACI Worldwide Inc., which supplied host software; and Compaq, which provided tandem hardware.
The machines - based on "early, simple Internet-related technology" - offered the ability to check movie listings and purchase tickets through a local theater chain, Mr. McGuire said. A browser-based interface enabled on-screen targeted messaging, and consumers could fill out an on-line survey about their experience at the machine.
CIBC, which has 4,300 ATMs, had always intended to pull the plug after the 10-month trial period, Mr. McGuire said.
"We don't want to do any further rollout of this technology until we've absolutely confirmed that customers want it," he said.
ATM experts agree that this is the biggest hurdle. There is no shortage of ideas for Internet ATM applications; the issue is practicality.
"The perception is that I'm going to have somebody up there in front of me surfing Amazon and Yahoo and everything else while I'm trying to wait for my cash," said Robert Nemens, senior marketing manager for Diebold Inc., the Canton, Ohio-based rival of NCR.
Existing technology would let consumers customize their ATM experience by setting up personal ATM Web pages from a home computer. Business travelers, for example, could arrange to be connected to the Web site of their hometown newspapers. ATMs could deliver e-mails with timely stock information. Bills could be paid.
ATM experts talk broadly about on-line shopping possibilities, suggesting that consumer confidence in the ATM might even soothe fears about on-line credit card fraud. They also envision consumers using ATMs in supermarkets or department stores to do initial browsing and research on items within those stores. They foresee banks charging fees for purchases of airline or event tickets, which would be dispensed directly from the ATM.
But the significant investment may be hard to swallow. Deployers must pay for the software and telecommunications upgrades required to transform a conventional ATM. If the ATMs are older or if printers or ticket dispensers are desired, hardware upgrades may also be necessary.
Cost was a large part of why Royal Bank of Canada "tabled" an Internet ATM project last spring, said Eric A. Brydon, senior manager for selfservice banking systems at the Toronto-based bank. The bank had experimented with an Internet ATM prototype in an internal pilot involving Diebold and International Business Machines Corp.
"We will see more and more Internet-based ABMs deployed, that's a given. From our perspective right now, though, the strategy isn't clear enough," Mr. Brydon said.
Michael S. Wooten, vice president of ATM operations at Memphis-based Union Planters Corp. …