Are Your Bank's ATMs Earning Their Keep? (1991)

Are your bank's ATMs earning their keep? Automated teller machines have been on the front lines of retail branch banking for two decades. But now the banks are rearming them with technology that was unheard of when the machines made their debut, including check image lifting, touch-screen technology, and on-demand statement printing. Reinforcements also are arriving in the form of automated devices that dispense new account information, calculate loan payments, and help customers order replacement checks, to name just a few applications. Some of these features have been heralded for years. Now, however, there is real interest in the latest versions of them. Banks are augmenting their ATM capabilities in order to reduce teller lines, increase the level of convenience associated with bank transactions, and earn additional revenue by charging for some ATM-based services. Who would have thought years ago that roughly 50% of teller transactions could be done at the ATM? asks James Walker, vice-president of electronic banking at Provident National Bank, a subsidiary of PNC Financial Corp., in Philadelphia. It's not farfetched to think that ATMs will handle 75% of teller transactions, particularly if banks use the new ATM features available. Provident is phasing in ATMs that dispense cash and coins, which enables customers to cash certain checks, such as preapproved payroll checks and those drawn on other Provident accounts up to a certain amount. The bank will install InterBold's Modular Delivery System (MDS) ATMs with a check processing module as they become available in the new future. InterBold, based in N. Canton, Ohio, is a year-old joint ATM venture between Diebold, Inc., and IBM Corp. IBM introduced a coin-dispensing ATM in 1983, the Model 4732, but it was somewhat more expensive than standard ATM offerings and saw limited market penetration. Get the picture? The MDS machines accept, process, and display an image of a check, which helps convince the customer that the ATM has recorded the deposit. If the check is approved for cashing, which is determined by the account number on the MICR (Magnetic Ink Character Recognition) line, the machine dispenses the amount of the check, including loose change. Based on our market share in Philadelphia, [check cashing] won't be the most popular transaction, notes Walker, because most checks are drawn on other banks. But when [PNC] rolls out the technology in the Pittsburgh area early next year, where it has a 25% to 30% market share, automatic check cashing will be a much more useful transaction to those customers. PNC Financial Corp., with $43.3 billion in assets, is also the parent of Pittsburgh National Bank. PNC was part of the group that developed the MDS product. The other two parties were InterBold and Applied Communications, Inc., a financial software developer based in Omaha, Neb. PNC joined the development effort to ensure that MDS, when completed in the first quarter of 1992, would meet the bank's expectations and be delivered in a timely manner. InterBold hopes the image lifting technology will help banks assure their customers that ATMs are effective check deposit vehicles, which consumers have been slow to accept. One of consumers' great fears with deposits is that they don't know what happens to the check once it's in the deposit slot, says David Bucci, director of self service systems at InterBold. InterBold also is exploring using image technology on the ATM to truncate checks at that point and eliminate further movement of them in the settlement process. Account options. Meanwhile, a growing number of banks are experimenting with new account options made possible when statement printer devices are added onto ATMs or are part of the ATM itself. For example, a bank can offer free statements, provided the customer agrees to obtain one from an ATM at least once per month. This could reduce the monthly service charge, which would attract new customers as well. …