"Know your customer" has become a mantra for financial institutions, both to help them meet new security requirements and to boost sales potential.
Yet it's been difficult to derive much benefit from such knowledge at the most popular banking channel, the ATM.
Unlike branch and online banking, the ATM offers few opportunities for customers to express their preferences -- even for something as basic as the language in which they want to conduct transactions. ATM users typically must navigate through several screens just to withdraw cash -- which accounted for 78 percent of all ATM transactions in 2003, according to Dove Consulting's 2004 ATM Deployer Study.
A Harris Interactive survey commissioned by NCR late last year concluded that just 43 percent of respondents agreed that their bank anticipates their needs for financial services and products.Â When asked what elements of customer service are most important, 68 percent noted that it's extremely or very important that their bank demonstrate the ability to understand their needs.
Keeping it convenient
As financial institutions experiment with adding functionality at ATMs and try to make the channel as inclusive as possible -- by introducing additional languages, for example -- they risk alienating customers who use them primarily for quick transactions.
"When you add more functionality to the ATM, the customer has to spend more time sorting through the choices," said Matthew Burns, senior vice president of electronic banking for National City.
That is beginning to change, however, with more FIs offering the ability for customers to personalize their ATM transactions.
Seventy-two percent of the respondents in the Harris Interactive survey favorably ranked the ability of their bank to offer a pre-programmed "favorite transaction" at the ATM.
National City in August introduced the ability for its customers to pre-select a preferred language, receipt option and usual withdrawal (fast cash) amount. The service is available on roughly half of National City's 2,000 ATMs -- with the remainder to receive the feature in the first half of 2005 as National City completes its Triple DES upgrades.
Customers appreciate the feature, which National City calls My ATM Choices, because it saves them time at the ATM, Burns said. This will become even more meaningful, he believes, as FIs consider adding new transactions.
As they introduce Microsoft Windows-based ATMs, FIs want to avoid "the learning curve" experienced with online banking, he said. "As we kept adding more and more features (online), customers had to click four or five times just to get to where they wanted to go."
First Data Corporation drives National City's ATMs, which automatically recognize pre-selected preferences when customers enter their PINs. The fast cash button is positioned at the top left, where "customers' eyes and fingers are naturally drawn," Burns said.
Usage of My ATM Choices has "met expectations," Burns said, although he declined to reveal the number of customers that had registered preferences.
Customers see a brief explanation of My ATM Choices and are offered the option of initially registering preferences or editing them at the conclusion of a transaction. Burns said it appears as if many customers view the prompt several times before enrolling, likely because they are in a hurry or other people are waiting to use the ATM.
While branch and call center personnel have been briefed on My ATM Choices and are encouraged to mention the service to customers, Burns said National City will not launch a marketing campaign promoting the service until it is available at all of the bank's machines.
Wells Fargo, which introduced personalization at its ATMs in the summer of 2003, recently began actively promoting the service,Â now that isÂ available on all but aÂ few hundred of its 6,200 machines.Â TheÂ remaining ATMs willÂ receive the feature this quarter.
"We wanted it to be everywhere in our network before we begin really promoting it," said Jonathan Velline, the bank's senior vice president of ATM banking. "We want customers to have the same experience everywhere they go, whether they're in Minnesota, Texas or California."
Currently the service, which Wells Fargo calls MyATM, is promoted on the main menu screen of machines offering it. TheÂ bank is also considering introducing it duringÂ enrollment of new customers at branches.
"Setting up new accounts at our stores provides a great opportunity to talk about all of our benefits, including ATMs," Velline said.
Wells Fargo offers ATM users the option of registering their preferences for whether a receipt is desired, a standard withdrawal (fast cash) amount and the preferred account for withdrawing funds.
Not just for customers
In addition to better serving existing customers, Wells Fargo believes ATM personalization may offer potential as a recruitment tool, Velline said. Thus the bank recently began offering the feature to regular users of its ATMs who do not have Wells Fargo accounts.
"The ATM offers one of the few opportunities we have to talk to non-customers about what it's like to bank with Wells Fargo," Velline explained, noting that it's too early to tell whether personalization can help attract new customers.
Wells Fargo, which drives its own ATMs, stores non-customer preferences on the same secure server where customer information is stored, Velline said. ItÂ also offers advertisements of products targeted to different ATM users -- including non-customers.
Many industry insiders feel such targeted marketing is the next logical step to ATM personalization. Twenty-nine percent of respondents to the NCR-commissioned Harris Interactive survey said they would be likely to follow-up on a pre-approved banking offer if it could be immediately completed or initiated while the ATM was processing a transaction.
Despite the current emphasis on the branch as a favored channel for customer interaction, the ATM is too important of a channel to ignore when it comes to service and marketing efforts, said Velline, adding that slightly more than half of Wells Fargo's total banking transactions occur at ATMs.
"If we focused only on the teller, we'd be missing an opportunity to deliver a 'wow' customer experience for half of our transactions. We want to offer the best and most convenient experience for our customers, regardless of how they choose to transact their banking business," he said.
Personalization at the ATM "rekindles the personal touch for the bank that is sometimes lost in the transition to the more cost-effective self-service channel," said Stephen Risto, director of NCR's APTRA Software Center of Expertise.