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TMCNet:  New ATMs capable of handling more complex transactions

[November 23, 2012]

New ATMs capable of handling more complex transactions

Nov 23, 2012 (Chicago Tribune - McClatchy-Tribune Information Services via COMTEX) -- Inside a new Chase branch on Chicago's North Side, customers can step up to a spot typically taken by a teller and use what resembles a supersize iPad to withdraw up to $1,000 in denominations as small as $1. The new generation of ATMs gradually being installed by one of the nation's biggest banks will also allow, in early 2013, customers to cash checks to the penny.

Although consumers increasingly say they prefer Internet and mobile banking, ATMs are a tried and true retail channel that some expense-conscious banks are enhancing to perform many of the tasks handled by tellers.

"Our goal is to drive more transactions from the teller window to the computer screen or the ATM," William Demchak, PNC Financial Services Group Inc. president, said at a Nov. 13 bank conference. The degree to which PNC Bank can encourage customers to use such channels "represents significant potential cost reductions," he said.

The cost per transaction at a branch is almost $4, compared with 59 cents at an ATM, 56 cents using online or mobile devices and 10 cents at a call center, Demchak said at the conference.

At its new branch at 6155 N. Western Ave., Chase has installed its first "self-service banking kiosks" in the city of Chicago. Chase has about 5,500 bank branches; 99 nationally and three in the Chicago area have the machines. Chase said customers appreciate the alternative to waiting in teller lines. Most branches will eventually get the kiosks, which are akin to self-service supermarket checkouts or airline check-ins.

The North Side Chase branch has a couple of traditional ATMs at its entrance. But inside, three of the five counters traditionally occupied by tellers feature self-service banking kiosks.

Jeanette Cameron, who visited the North Side Chase branch Nov. 15, had planned to withdraw $20 from a standard ATM and, to break it, was resigned to going across the street and making a purchase at Walgreens. Instead, at the new kiosk, she was able to obtain four $5 bills instead of one $20.

"It is so cool," the Chicago nurse said of the more flexible ATM.

Sardar Khan, a gas station owner, used the kiosk to withdraw $1,000, all in $100 bills -- something he couldn't do at standard Chase ATMs, which have $500 withdrawal limits. Chase eventually expects to program the kiosks to distribute as much as $3,000 in cash.

Here's how the denomination selection process works: When a customer wants to withdraw, for example, $360, the Chase kiosk screen will default to three $100 bills and three $20 bills. Don't want Benjamins Tap three times the minus (-) key next to the $100 symbol, then tap 15 times the plus (+) key next to the $20 symbol. For the math-challenged, the kiosk screen keeps a running tally. The kiosk also dispenses $5 and $1 bills.

Chase, PNC and others continue to invest in ATM fleets even as the percentage of consumers who identify ATMs as their favorite banking method has fallen to 12 percent, from 15 percent in 2010, an American Bankers Association study released in October shows.

Also, when it comes to banks' capital spending priorities, the ATM channel ranks lower than branches, call centers, and online, mobile and tablet banking, according to a survey of 132 North American financial institutions in July by consulting firm Celent.

Consumers say the Internet is their favorite way to bank, with 39 percent of respondents in the bankers association survey saying it's the method they "use most often to manage their bank account." That's up from 36 percent in 2010.

Although visiting a branch is the second-most popular banking method, the percentage of consumers in the study who say that's their top preference has fallen to 18 percent from 25 percent.

ATMs remain the third-most popular banking method.

PNC's newest ATM feature, called PNC DepositEasy, lets customers deposit multiple checks or cash without an envelope. It provides an image of the checks on the receipt. More than half of PNC ATMs will be upgraded by the end of 2012 and the rest, including in Chicago, will be completed by fall 2013.

Chicago-based MB Financial Bank said it upgraded its ATM fleet to allow consumers to deposit as many as 50 bills or 30 checks into an ATM without an envelope. Last year, BMO Harris Bank replaced some ATMs with new machines that allow consumers to deposit cash and checks through a single slot without an envelope. In September, Citibank began offering emailed ATM receipts.

Other banks are installing two-way video ATMs that allow customers to chat live with a bank employee in a remote video call center.

Last month, Salin Bank, which has about two dozen branches in Indiana, began the largest installation to date of ATM-maker NCR's Interactive Teller. The $750 million-asset bank will install Interactive Teller in drive-thru lanes at most existing branches, in branch lobbies to reduce wait times during busy hours and in new locations. Salin will provide banking services at the machine until 7 p.m. Mondays through Saturdays. Like branch tellers, remote tellers can provide such services as giving customers cash in amounts that exceed limits on daily ATM withdrawals.

In May, New York-based Chase told analysts that new digital and branch technology will help it save as much as $500 million a year. Chase also has estimated that its teller lines deal with about 1 billion pieces of paper annually.

"Over the next two to three years, we're going to introduce a lot of new technology into the branches and ATMs, and that's going to generate head-count savings for us and it's going to encourage more transactions going mobile and ATM and other forms of self-service," Todd Maclin, co-chief executive of Chase's retail business, said at the bank's February investor day. "Branch and ATM self-service has the capacity to be a game changer for us." Chase began testing self-service kiosks in early 2011 at about 10 branches nationwide. As of February, Chase told investors that more than 90 percent of customers who once asked a teller to withdraw cash were now doing it themselves at the kiosks.

Future branches probably will need fewer tellers because of technology like the kiosks, but for now, employment at the branch on North Western is holding steady.

One reason: The new branch replaces an older neighborhood facility, and, unlike the old branch, the new one has a drive-thru that requires staffing. Tellers also have more time to help customers with other needs or to show them how to use the kiosks.

byerak@tribune.com Twitter @beckyyerak ___ (c)2012 the Chicago Tribune Visit the Chicago Tribune at www.chicagotribune.com Distributed by MCT Information Services

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