Fletcher, Charlie, Independent Banker
Nonbanks and technology continue to reshape the ATM landscape
In today's wired, competitive landscape it is sometimes difficult to discern whether ATM technology is ramping up or revving down. All the major ATM manufacturers are continuing to develop and roll out new, feature-laden models. "These continue to be very exciting times in the ATM industry with new avenues being constantly explored for revenue opportunities and customer relationship services," says Debbie Bartoo, vice president of processing product development and management at Star Systems, a subsidiary of Concord EFS.
A consumer research study performed in early 2001 seems to support this action. Nearly half of the consumers interviewed liked the idea of ATMs dispensing coupons for general merchandise or services, according to Synergistics Research Corp. The company based its research on a telephone survey of more than 1,000 consumers 18 or older with household incomes of $15,000 or more. One-third of those surveyed also liked the idea of viewing advertising on an ATM screen for financial services.
Yet in some areas of the United States ATM use has stopped increasing as consumers shift their banking activities toward electronic funds transfers and Web banking. What's more, convenience stores, gas stations and even fast-food chains are getting into the act by installing ATMs on their premises. These nonbank ATMs, which typically lack depositories, are saturating the landscape with cash dispensing machines.
Making it that much more difficult "to develop the business case to support these types of services," Bartoo concedes, "especially since in some cases you are trying to teach new behaviors to consumers. This often takes significant marketing dollars and can make the business case difficult to substantiate."
"There is definitely a trend to do more marketing and branding at the ATM," says Cassie Metzger, senior marketing manager for Global Markets at Diebold Inc. The recent spate of mergers among financial institutions has created a renewed need for building institutional identity. "That has been one of the key drivers for changes by community bankers," she says, "because the competition has been changing and [community banks] want consumers to know they're still strong. So they use the familiar interface of the ATM to do that marketing of their brand."
WAVE OF THE FUTURE
In the past several years ATM technology has improved considerably. Today's machines resemble personal computers more than ever before, with high-speed microprocessors capable of running full-motion video and communicating through the Internet and large, color monitors. These improvements have sparked interest in the use of video ads both to run internal marketing campaigns and also ads for partners' goods and services.
PNC Bank, with more than 700 branches and 3,200 ATMs, is a large institution. The bank has been experimenting with using video advertising on its ATM screens since 1999, according to Shelly Chandler, product manager for self-- service banking at PNC. "We haven't rolled it out full scale," she says. "We have it running on 54 ATMs in a convenience store chain."
While it was difficult at first to get the technology to work as expected, she says things are going smoothly now. Selling advertising space, however, has been more difficult than expected. "The advertising side of it is something that is probably the reason that we're not rolling this out further at this point," she says. "The ad economy has been so incredibly soft. We aren't experts in the ad business, but the ad brokers that we've worked with have told us that media buyers are sticking with the traditional and finding even those budgets cut. Trying to purchase new technologies and new sources isn't something that they're doing."
Nevertheless, Chandler thinks enterprising community banks could find a silver lining in this cloud. "It's been a very difficult time for this technology to take off, but I'll have to tell you, for community bankers with smaller numbers of ATMs, I have heard of programs that work really well on a local basis," she says. …