Fortis and HSBC provide two examples of the onward march of automated banking, a phenomenon that is also the subject of a Europewide survey by Fujitsu. Michael Imeson reports.

Anyone wanting to follow the latest trends in self-service banking need look no further than Fortis to get an idea of what is happening. In its home market of Belgium, it has just launched a network of off-premises automated teller machines (ATMs) that are capable of taking deposits in railway stations and shopping malls.

“We had 45 of them by the end of 2007, in locations where there is high traffic but where we cannot put a physical branch and where an ordinary ATM would be too limiting for customers,” says Michael Anseeuw, head of business development, strategy and communication for retail bank global at Fortis. “We’re planning a further roll-out in similar locations this year.”

Fortis also started a pilot in January for a service called Direct Personal Banking for more affluent customers in Belgium. It is a personal relationship model using a combination of internet and telephone banking. “The remote personal banker handles your relationship but, if necessary, can refer you to an expert in a branch,” says Mr Anseeuw.

Another development has been the tightening of online banking security, using a digital access key, which was first used in the Dutch market and is now being rolled out to Belgium and Luxembourg. Mobile phone banking is also now proving popular at Fortis Bank, Turkey. “In mature markets, mobile banking has not really taken off, but it has in emerging markets, especially via text message,” says Mr Anseeuw.

Wider trends

What Fortis is doing is symptomatic of a wider trend towards technology-enabled transaction banking. Self-service delivery channels – the internet, mobile phones, ATMs and multi- functional kiosks – have come into their own. Collectively, these services account for far more transactions than are conducted through branches, call centres and independent financial advisers.

Self-service will never achieve total domination though. There will always be a place for the branch and other forms of human contact. But there is no question that do-it-yourself banking will grow at the expense of traditional channels.

ATM phones

People used to go to telephone boxes to make a phone call. Now they can get cash too if HSBC has converted the phone into an ATM. The bank is in the middle of a programme to install cash machines, most of which can take cheques and cash deposits, in British Telecom (BT) phone kiosks. Last year, it increased its UK ATM network by 500 to 4000, with 52 in phone kiosks, 200 in railway stations, newsagents and other remote locations, and 250 in branches.

“We’re looking to install another 500 ATMs this year, 30 to 40 of which will be in BT phone boxes,” says Tim Pie, an HSBC spokesman. “There’s a huge demand for ATMs but a lack of secure places to put them with the relevant wiring. Phone kiosks may be the answer. People love ATMs – 98% of cash withdrawn from HSBC is through them rather than through branch counters.”

Research findings

This trend towards technology-based banking is the subject of a report by Fujitsu Services entitled ‘Help Yourself: How self-service shapes the customer experience in retail financial services’. The report’s researchers sought the opinions of 2000 consumers in France, Germany, Netherlands, Spain, Sweden and the UK.

The results show why banks such as Fortis and HSBC are right to pursue ambitious self-service strategies. First, consumers say the internet is by far their most preferred delivery channel, though branches are still highly popular. Second, they regard self-service as a driver of trust and loyalty, although it is less important than value for money and customer service.

The report concludes that there is no doubt that the customer experience in European retail banking has improved vastly in recent years because of the growing sophistication and use of automated services – and because financial providers have worked hard to design the experience from a customer perspective.

“We agree with Fujitsu’s findings,” says Mr Anseeuw. “If you compare the evolution of what we call ‘manned channels’ versus ‘unmanned channels’, the number of transactions in the manned channels is reducing and the number of transactions in the unmanned channels is rapidly increasing.

“However, as the report points out, at certain moments in the sales process, or for certain products, the manned channels become more important, especially for mortgages, life insurance and personal loans. In such cases, people turn to a branch, call centre or an independent financial adviser for final advice on the product and to complete the transaction.”

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