The bank branch is undergoing another transformation as the emphasis shifts further towards self-service offerings, using ATMs, smart ATMs and online kiosks. Rekha Menon looks at progress.

The role of the bank branch has undergone a number of transformations in recent times. Although it represents the bank and its value proposition in the customer’s mind, being the oldest delivery channel, several industry pundits had predicted the demise of the branch during the internet heyday, suggesting that new-age delivery channels such as online banking would replace it. When the internet bubble burst, such predictions came to nought and the branch has once again been identified as a critical delivery channel. But this time its role is being perceived differently.

Enduring delivery channel

Unlike other delivery channels, the branch is one place where most bank customers still go for complex transactions that are facilitated by human interaction. By providing face-to-face human contact, branches are in a unique position to help banks to develop invaluable personal relationships with customers. Banks are therefore migrating routine banking transactions, such as cash withdrawal and deposit; funds transfer and standing instructions, to the less expensive non-traditional delivery channels, such as ATMs, telephone banking and online banking. This gives bank staff more time and space to focus on higher end activities, such as client relationship management and sales, which helps to drive down costs and increase revenues.

Inside a branch, the emphasis is on self-service, on enabling bank customers to complete routine banking transactions without any human interference through self-service terminals like cash-dispensing ATMs, smart ATMs and online kiosks. For instance, leading UK high street bank Barclays has introduced more than 600 quick pay point machines across its branches that enable customers to make payments by cash, cheque or a combination of the two, without having to queue for a teller.

According to analyst firm Forrester Research, in an effort to enhance self-service terminals at their branches, more than four-fifths of European banks have enhanced their ATM networks with functionality beyond cash withdrawals, three-quarters plan deposit ATMs, and more than half are adding kiosks (self-service PCs for online banking). Two-thirds of these firms are enabling ATMs with bill payment or statement printing options, and one-third are ordering account management functionalities such as changing PINs. Product marketing through ATMs is also being considered by one-third of these banks.

Marketing via ATM

OCBC Bank, a leading Singapore-based financial services group, has introduced targeted marketing and a personalised experience at all its in-branch ATMs in Singapore. The bank is the first in Asia to target personalised product and service offerings, record potential customer needs based on individual transactions and provide frontline customer service staff with the information they need to respond better to customer needs and identify cross-selling opportunities.

Patrick Chew, head of delivery, consumer financial services at OCBC Bank Singapore, says that ATMs are an important link in the bank’s customer relationship management (CRM) strategy. “We launched our CRM strategy in 1999 and in due course linked up all other delivery channels: branch, call centre and internet. Linking the ATM was the next logical step in our effort to provide our customers with an enhanced banking experience,” he says.

Among the various features that the bank has introduced, the most popular has been a “usual transaction” feature that provides bank customers with the option to customise and pre-set their usual ATM transaction choices such as the dollar amount and receipt option. During the pilot period, OCBC found that more than 60% of customers who used the upgraded ATMs signed up for the new feature, which according to the bank reduces the transaction time by up to 30%.

Industry observers believe that such features, which positively enhance the banking experience, can lead to an increase in usage of the self-service terminal for the bank. Banks in general have found it quite difficult to increase the level of self-service in branches because customers who visit branches are usually those who want human contact and are usually not comfortable with the non-branch delivery channels like ATMs, telephone and the internet. To get them to use an ATM in a branch is not easy, a fact that was highlighted in a survey carried out by Forrester Research. The survey showed that nearly one-third of branch transactions are over-the-counter primarily because banks do not actively encourage migration to the automated branch platforms out of fear of annoying customers.

Encouragement needed

Banks that adopt a wait-and-see policy on customer migration to self-service at the branch will be disappointed: customers will stick to their habits and will not switch to self-service terminals, says Charlotte Hamilton Clark, analyst at Forrester Group and author of the survey report, Fostering Self Service at the Branch. Banks should also use branch staff to help branch users gain confidence in ATMs, says Ms Clark. She gives the example of UK building society Nationwide, 75% of whose customers use self-service ATMs once they are shown how, compared with only 5% of customers that migrate of their own accord.

There is a wide array of ATMs available from vendors such as NCR, Diebold and Wincorp-Nixdorf. There are plain vanilla cash machines and the new-age ATMs based on open architecture can be included in a bank’s multi-channel integration exercise. OCBC Bank has deployed APTRA Relate from NCR, which enables it to design a tailored CRM solution for the ATM. APTRA Relate is one of the solutions in NCR’s APTRA suite of solutions that are designed for self-service banking.

According to Ms Clark, when a bank is deploying ATMs, it should clearly communicate the function of the self-service terminal to customers. This would allay a first-time user’s anxiety and confusion. Banks should also bear in mind other factors affecting customer psyche; for instance, Ms Clark says, banks should realise that customers only feel comfortable using new terminals like cheque-imaging and cheque-deposit ATMs inside the branch, where help is at hand. She also suggests that in the basic ATMs, which are plain cash dispensing machines, banks must avoid time-wasting financial product advertising or time-consuming additional third-party services like ticketing.

Bo Harald, vice-president and head of electronic banking at Nordea, the largest financial services group in the Nordic and Baltic regions, is also critical of direct marketing features on ATMs. “There is usually a long queue in front of ATMs and having such a feature will only increase transaction time, which is quite the opposite of what customers would like to experience. An ATM is a very expensive device and the shorter the transaction times, the better,” he says.

Direct marketing strategy

Although OCBC Bank has deployed enhanced ATMs and is using direct marketing on-screen messages, it is careful about not wasting customers’ time. “We don’t want to overwhelm our customers with unnecessary marketing messages. Instead what we have done here is to leverage on the capability of our CRM-powered ATMs to recognise the unique needs of each of our customers and then target relevant products and services according to what they need,” says Mr Chew. At OCBC’s ATMs questions like “Your fixed deposit is maturing soon. Would you like to find out how to earn more interest?” or “Would you like a reno loan with your recently approved housing loan?” pop up while a customer is awaiting a cash transaction to come through, requiring the customer to press a ‘yes’ or a ‘no’ button. The responses are channelled to the bank’s personal financial consultants, branches or call centre for future follow-up.

Industry experts suggest that marketing programmes that are designed to meet specific needs of customers are a powerful way to leverage the number of contacts that customers make with the bank through the ATM.

New-age technologies and open standards are coming together to include ATMs in the multi-channel integration strategy of banks. But banks need to realise that to enhance the branch self-service proposition, the solution needs to be implemented intelligently, keeping in view the customer psyche and requirements.


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