ATM - Not Just Machine

Posted in Operations & IT Articles, Total Reads: 2029 , Published on 19 October 2014
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“Banks may soon begin charging customers for ATM usage”- The Hindu Business line. This really puts a big question mark on the usage of ATM by Indian customers. India is a place where a small increase in price of consumption can seriously put your product under scrutiny especially if it is a financial product. We Indians already think twice before going to some ATM and withdraw money. Safety is one such reason that is at the top-of-mind of any ATM user. There have been issues with respect to usage of ATM. Often we come across news of increase in theft at ATM and this is why banks have been forced to think of charging customers to counter the increase in costs owing to the increased security at ATM.


Banks, while deciding the fees, should not dispel the power which the substitutes of ATM have. Most of the corporate people or even the college going students carry credit and debit cards to pay whenever they are short of money. This prevents their visit to the nearest ATM. So it’s a serious time for banks to think whether their ATMs are just cash dispensing machines or machines with plenty of surprises for customers? Banks need to put their ATMs as an effective way of increasing the “ROI”.

Image Courtesy: freedigitalphotos.net, Naypong


The dilemma here is that and it is quite a valid one is that why to use something that was manufactured to provide some core benefits. All of us know that ATMs were manufactured to basically ease the life of customers by providing quick cash to them whenever and wherever required. Nowadays you can find ATMs in every other place whether it is some place near small retail store, in cinema halls or some big shopping complex. But what if customers stop using ATMs owing to the reason cited in the introduction then it will be a huge loss to the banking industry. So rather than burdening the customers with the increased costs these financial institutions can do something that has not yet exercised to a great extent- “Using ATM to grow business”.


Gone are those days when most industries were limited to basic marketing channels such as print and television Ads, direct mail etc. Many have gone online and that has to be done because of the increase in online presence of the customers. But one such industry however has a unique opportunity. Yes I am talking about the financial institutions (FIs) only. ATMs have provided this golden opportunity to them. They can now reach customers at a place where they are most attentive i.e. the ATM.


Technology does play its role here too!!


Technology is consistent in evolving so is the ATM technology that has changed over the years. Earlier manufacturers relied on OS/2- based proprietary systems but now they have shifted to Microsoft Windows based operating system and TCP/IP communications. So how can the banks use this technology for better customer engagement?


Before going into details of “how”, first we should know “why”. I mean why focus on customer engagement or as marketers say on “Customer Relationship Management”. Most of us are familiar with the “The Long Tail: Why the Future of Business is Selling Less of More, Chris Anderson”. For those who are not, it is basically a theory that was proved right in the case of Amazon and Barnes & Noble. According to which books that are not even sold in average book store have a potential market of twice the size as it seems to us. The combined sales of these less popular books are much more than the sales of popular books.

 

Figure 1: The Long Tail: Why the Future of Business is Selling Less of More, Chris Anderson


Microsoft OS has given a way forward for these institutions to engage in niche and one to one marketing to customize promotional offers and campaigns according to the customer segments. TCP/IP communications compliment by providing faster connections for processing transactions, thus ensuring speedy flow of data in near real time. So we know what technology is doing here but how can the financial institutions make money out of this. Well let’s see!!


Cross Selling of products

It’s a proven fact that almost every Indian feels agitated whenever he/she receives call regarding credit card. These calls not only create frustration among customers but also reduce the loyalty towards the bank. So why not promote your credit card at “Thank you” screen!!. And if the customer accepts then any kind of legal verbiage can be printed on the receipt. This will not only save the direct expense of mailing but also the time of interaction. Other financial products such as home and auto loans can also be marketed via ATMs


Customisation of offers

Now comes the role of “CRM”. Database on customers helps in pre-defining the parameters for the credit limit and APR. Age demographics can be easily identified and on the basis of that student loan can be offered to a particular age group. The technology can also target those ATMs which are located in sports centric area and show promotional offers accordingly for sports tickets etc.


Work for the society

Banks can also built strong relations with the communities by actively participating in the community matter. They can post timely announcements of missing child etc.


So this one-to-one marketing or target specific marketing by ATMs depends on the robustness of the CRM system of bank and deliver exceptional results.

Till now we tried to analyse the usability of data that a bank already has and develop marketing efforts accordingly but now we will see how a financial institution can bring innovations to its ATM and build brand loyalty or you can say a brand connect among the customers. In a nutshell do something which others are not doing!!


Print Receipts can do much more!!

 Make your receipts more visually attractive to the customers. Remember you are differentiating yourself.

 Don’t let your customers throw the receipts: How?

o Print barcodes on receipts for redeeming offers to customers. “Scan the barcode and a get a special prize!!!”

o Print financial advice at the back

o Financial institutions are perceived to be serious. Do you really want so?. Make the most of days such as April Fool’s day. Share funny cartoon strips but make sure to do so after transaction has taken place. A funny strip in between a transaction can scare the customers.

o Ask customers to keep receipts and earn loyalty points that will in turn help them in getting rewards such as low interest rates. It’s up to banks to decide rewards but at least this is generate loyalty


Personalise the transaction

Most of us are generally in hurry when it comes to dispensing cash out of ATM. And this hurry slowly converts to frustration when we need to enter various details. So why not have an “ATM profile”!!. Banks should allow customers to create their profile in which they can set the language preferences and withdrawal options. Thus the only requirement at the ATM will be PIN and confirmation of transaction. Doing so will not only increase the customer experience but also make each ATM more efficient.


Get your money in your own currency

Don’t surprise the customers by their statement. Offer the service in which the international cardholders can get the cash in his/her currency. This will allow them to know the exact amount debited from the account.


With increase in ATM operational costs, it has become necessary for financial institutions to take a new look at their ATMs and make them an integral part of strategy. Windows based Operating system has given these ATMs an immense power to be more than a cash dispensing machine. A point of caution- whenever you advertise in between a transaction make sure to keep a text at the top that shows “Transaction in Process” otherwise it will be perceived as a failure in transaction.


Those financial institutions that are not leveraging their ATMs as CRM tools and marketing channels are really missing a great opportunity to counter the decrease in ATM profitability. It will be good to see if Indian government allows third party advertising for bank ATMs. Another source of income!!. But allowing NBFCs to open their ATMs, known as White Label ATMs, Indian government has not only increased the penetration of ATMs in Indian market but also given these institutions more customer base which can be leveraged for more revenues. Also these White Label ATMs can indulge themselves in third party advertising.


But one aspect that will definitely change if banks apply all these strategies is the method to calculate ROI. Rather than measuring metrics such as revenue or transactions per machine, banks would be measuring cross-sales per machine, new customers per machine etc.


So ATMs, though present in 6ft by 6 ft room, is really a plethora of opportunities. One need to know the ability to capitalize that opportunity.


This article has been authored by Rahul Gupta from IMT Ghaziabad 


References

ATM marketplace. (2012). Benefits of ATM Branding and Advertising for your Bottom Line.

ATM Marketplace. (2009). The Use of ATM Screens to Augment Marketing Initiatives .

First data. Breathe New Life into Your ATM Program with Progressive Marketing and Customer Relationship Management Tools.

First data. (2008). The Case For ATM Advertising.

Graphic Tickets and Systems. Free ATM Advertising Ideas.

Graphic tickets and systems. Turn your ATM into an ROI Machine.



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