Advanced Functionality ATMs: Promise Meets Reality

January 3, 2006

Abstract

Montreal, Canada January 3, 2006

Innovative financial institutions are transforming ATMs into more than just a cash withdrawal machine by investing in advanced functionality to improve customer service, lower costs, and strengthen their brand.

In a new report, , Celent explores promising examples of advanced functionality being implemented at ATMs in North America today. Leading banks are working to transform the ATM into an effective relationship device. Banks are integrating ATMs with other bank channels and implementing personalization capabilities, alerts, and targeted marketing to solidify customer relationships and build their brand.

Banks are also examining check imaging at the ATM to lower costs and improve customers’ experience. Given the limited use of self-service capabilities for check deposits, shifting these basic transactions from the bank branch to the ATM continues to represent a significant cost savings opportunity for financial institutions. Customers stand to benefit from the extended deposit cutoff times and more favorable funds release policies enabled by check imaging.

According to Madhavi Mantha, senior analyst and author of the report, "Given the ubiquity of the ATM and its importance to consumers, banks that can successfully leverage this channel to provide a greater number of products and services in a more creative and personalized way stand to move ahead of the pack and transform the ATM from merely a cost of doing business to a competitive differentiator."

ATM-like technology has the potential to boost self-service usage at the branch as well. Banks are faced with the need to both lower transaction costs by moving customers to self-service channels and seek more face-to-face selling opportunities, and will deploy a broader range of in-store self-service concepts over the next several years.

The report also examines the efforts of leading retailers such as 7-Eleven, which are providing financial services in more sophisticated ways, using ATM-like self-service technology to offer consumers a menu of services that far exceeds current bank efforts.

The 31-page report contains 6 figures and 7 tables.

A table of contents is available online.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Montreal, Canada January 3, 2006

Advanced Functionality ATMs: Promise Meets Reality

Executive Summary 3
Introduction 5
Market Overview 7
  Current ATM Usage Patterns 7
  ATM Technology 9
  The Role of the ATM: The Bank View 11
Advanced Functionality At The ATM 13
  The ATM as a Relationship Device 14
  Deposit Automation: Check Imaging at the ATM 17
  The Role of Self-Service Functionality in Branch Renewal 20
  Driving Adoption of Advanced ATM Functionality 23
Looking Outward: The Retail Experience at 7-Eleven 25
Conclusion 28
Objectivity and Methodology 30

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