As the interface and capabilities of self-service terminals continue to evolve, customer experience and predictive analytics will determine true differentiation among ATMs of the future.
Over the next several years, financial institutions will find themselves at the crossroad of technological advances and human interactions. We’ll see innovations in terminals, software and UI design enabling the automation of more and increasingly complex transactions. Meanwhile, consumers will come to expect an omnichannel experience across their banking touchpoints. I believe this will lead us to an era of competing on experience, in which FIs will need to understand how automation can complement, rather than supplant, the invaluable human element.
The question is no longer, What will ATMs look and act like in the future? Instead, we should all be considering a much more UX-focused challenge: How are the advances to self-service terminals enabling deeper, richer conversations and relationships between consumers and their banks?
Sophisticated Transactions Go Mainstream
Internationally, the future of the ATM has begun to reveal itself. In Latin America, sophisticated self-service terminals can sell you minutes for your phone, provide a place to pay your bills, facilitate person-to-person payments and even allow access via biometric technology such as palm-vein recognition. European banks have seen large migration to ATMs, with the amount of transactions that can be automated approaching 90% in many places. In the global 2015 ATM and Self-Service Software Trends report from ATM Marketplace, 66% of FI executives and industry experts said their banks planned to add new transaction capabilities at the ATM.
Over the next five to 10 years, many of these functions will transition from regional capabilities to global standards, as consumers come to expect that an ATM, regardless of the vendor or FI logo on the screen, will offer an omnichannel experience that’s as seamless as it is convenient.
For example, imagine a self-service terminal that doesn’t just recognize your shopping preferences and offer you an on-screen coupon, but connects the rich data it houses on you to suggest a low-interest car loan at the right moment in time – and then walks you through the application on-screen, with real-time two-way video available at any step of the process. That’s where our hardware and software innovations are focused. Automating these “advanced transactions” saves an FI money while deepening customer relationships. A teller transaction typically costs an institution $4; the same transaction conducted at a self-service terminal costs just $0.61.
In global research of consumer preferences, we’ve found that when they’re interacting with an ATM, they understand the user interface. They feel in control and comfortable. And – crucially – they’re in a banking mindset. They’re in a highly secure, highly authenticated environment, interacting with an institution they trust. In fact, a 2015 Accenture study found 86% of consumers trust their bank most when it comes to securely managing their personal data. That’s a lot of trust. What are we doing with it? How are we tapping in to it when consumers are at a primary touchpoint like an ATM?
Automation Enables Humanization
Automation and digitization are changing the face of banking, yet in the midst of technology replacing many human interactions, new opportunities arise to enable deeper and richer conversations between clients and bankers. As the banking industry faces certain margin compressions and product commoditization, customer experience will be a key area of differentiation.
Our teams at Diebold have done interesting work studying at the right balance of automation and human interaction. What we’ve found is that analyzing an ROI based solely on “human-to-automation” arbitrage doesn’t give you the full picture; it’s a dated way of looking at efficiency. Instead, we’re more interested in calculating the ROI around higher value use of employees. New automation should go hand-in-hand with new soft skills for tellers and help drive the right type of traffic over to the banker.
Our research reveals that, given the proper context, consumers prefer automation. What they don’t like is being told what to do. FIs who truly grasp that potential paradox will find ways to facilitate migration to in-lobby tellers and full-function self-service terminals, using well-trained employees as advisors and member specialists. We’re seeing very encouraging early results from that nuanced, more long-term approach. In one recent collaboration between Diebold and a regional credit union, the automation strategy was two-pronged:
- Introduce more advanced terminals in the branch
- Evolve tellers into Member Service Specialists
The bank rolled out the new series of self-service terminals, but also instituted an ongoing effort at the human level to migrate consumers. Employees were not only trained in sales techniques, they were also deployed in branch lobbies to encourage adoption of the new terminals. And because transaction-migration created a viable cost structure, branch employees could interact with consumers more, not less … but in an entirely new way. As ATMs’ analytical software and predictive capabilities evolve, we’ll see more and more opportunities for meaningful interactions between universal bankers and their consumers. That’s where competing on experience becomes critical for success.
“Why” Trumps “How” in Technology
These transactions and experiences will clearly be enabled through new innovations in technology. However, I would argue that as banks choose the products and services they believe will fulfill a vision they have for the future, it’s now more important than ever to evaluate the why of a solution rather than the how.
When I look at technology that I might apply to a given challenge, I start with the “why” and move out:
- Why was this solution created? This tells me about the philosophy of use, about the vendor’s intimacy with the end user, about the goals they believe it will achieve and their vision.
- What capabilities and benefits does it present to banks and consumers? This tells me not only about the tangible features and functions of the solution, but more importantly what the benefit is.
- How does it work? This final step tells me about the soundness of the solution and validates that the first two questions can be delivered on.
More transactions are being automated. But that shouldn’t abstract away the human connection between bankers and consumers. Instead, new automation capabilities should initiate and drive highly targeted human interactions. FIs can use technology such as ATMs to engage with, rather than avoid, their consumers and provide a differentiated experience.
Today’s consumers are savvier than ever, and their experiences outside the financial industry are influencing their expectations within it. Self-service terminals can act as a crucial linchpin among their interactions, integrating mobile banking, digital payments and consumer analytics. As FIs update their networks, and reimagine their strategies, they’ll need a partner who can collaborate in a meaningful, innovative way across hardware, software and services; a partner who understands the process and can provide customized, end-to-end solutions. And those are the kinds of conversations we love to have.