- NCR is aiming to become a fintech powerhouse. Yes, NCR is already a large player. However this acquisition allows them to expand further into digital banking . We have seen similar stories with ACI’s acquisition of S1 and Online Resources, D&H’s acquisition of Harland, Fiserv’s acquisition of Open Solutions, etc. This is the next wave of solution providers competing on digital and multichannel banking. In other words, there is plenty of opportunity for banks to look beyond the classic core banking providers for online and/or mobile banking.
- NCR will be able to focus on multichannel banking and cross-selling their solutions. Online, mobile, ATM, branch transformation – these are all areas that NCR can zone in on. Not to mention that the firm has a multichannel marketing solution. Both firms have solid client bases that can be tapped into.
- NCR already has digital banking solutions. The firm will now add a host of new and modern solutions to their digital banking arsenal. The Digital Insight assets will allow NCR to become a more significant player in the online and mobile banking space.
- Digital Insight can’t afford to be in limbo for so long. The firm has been caught up in the M&A doldrums for quite some time, starting from when Intuit decided to sell the firm. Other firms spent this time investing in their solutions and building out new capabilities.
- NCR is going to have to move very quickly in order to compete. Newer firms like Q2 have been gobbling up market share from the classic providers. Other startups are emerging on the scene. NCR will have to forge ahead rather quickly in order to stay relevant in the online and mobile banking market.
- NCR is going to have to manage the expectations and concerns of Digital Insight clients. Digital Insight clients have bounced around from Intuit to Thoma Bravo to NCR in a very short period of time. This can be a frustrating experience and NCR is going to have to work hard to make these clients happy.
- NCR and Digital Insight both offer digital banking solutions. Some of this product overlap will need to be rationalized.
- Banks are rolling out channels and touchpoints without necessarily teaching the customer how to best use them. When ATMs (or ABMs, north of the border) first came out, bank personnel would walk customers over to them and give them a basic tutorial. There is precious little analogous activity in our new digital channels; we simply assume that customers will pick up on how to use them. Apple has trained us to think that really good experiences need no tutorial, but that’s not necessarily the case in banking, particularly when it comes to security concerns.
- The session didn’t address Personal Financial Management (PFM) directly, but when we touched on it, the group took off on a twenty-minute tangent! There’s clearly a lot of interest in PFM despite anecdotal adoption rates that continue to hover around 10%.
- Piggybacking off existing infrastructure, e.g., the AppStore ratings engine and comments section, is a great way to garner customer feedback. The key, obviously, is to listen and act on the comments that customers provide, and at least one bank watches its ratings assiduously and uses the feature requests and complaints as a key driver of release improvements.
- As in the U.S., the fate of the branch network is an important strategic issue. One component that will have some bearing on this is video banking, whether through hardpoints or consumer devices (laptops or tablets). Bankers are clearly keen to determine how video can supplement other channel experiences.
- A sneak peek of a Celent survey of Canadian banking customers showed their behavior to be remarkably similar to Americans’. While there were a couple of exceptions (to be detailed soon in an upcoming report), there were no huge disconnects. Despite some of the differences in the structure of our two banking systems (oligopolistic vs. fragmented, and cooperative on infrastructure vs. wildly independent), our consumers tend to view and use their banks similarly.
ATM sales have stalled over the past few years to no surprize. We probably have enough of them deployed – in developed countries at least. But what if there were a credible alternative to ATMs for cash dispensing? Apple apparently thinks it has one. It has filed a patent application accordingly. I was made aware of this courtesy of Janney Capital Markets.Forget Digital Wallet. Apple Wants to Turn YOU Into an ATM Via Ad-Hoc Cash Dispensing Network A recent patent application filed by Apple (AAPL – $456.83; Buy, Janney analyst Bill Choi), describes an iTunes-based ATM network. “Need some quick cash right now and there’s no ATM around? Launch the Cash app, and tell it how much do you need. The app picks up your location, and sends the request for cash to nearby iPhone users. When someone agrees to front you $20, his location is shown to you on the map. You go to that person, pick up the bill and confirm the transaction on your iPhone. $20 plus a small service fee is deducted from your iTunes account and deposited to the guy who gave you the cash.” The patent application makes 24 claims and makes interesting reading. The idea invites a few questions…
- Could Apple pull it off? Effortlessly! It has all the requisite components: a critical mass of iPhone users, geolocation enabled on the vast majority (I think), a distribution mechanism for the requisite apps and its iTunes accounts each iPhone user must maintain.
- Would anyone use it? That invites a less obvious answer. Both Apple and the cash provider would need some incentive. Research suggests consumers aren’t fond of ATM surcharge fees, particularly as they grow over a couple of bucks. The fee structure would be key as would the user experience. A few attempts with poor response, or fast response by a total jerk, for example, would likely present an adoption barrier.
Last week NCR announced a partnership with uGenius that will result in a new NCR device adding real time video to the ATM experience. The new NCR APTRA Interactive Teller ATM, based on its successful SelfServ 32 platform will add hardware components such as a Speaker, photo ID scanner, signature capture device, microphone and handset along with uGenius software at the ATM and in the back office. The uGenius software will be installed along with NCR’s own APTRA Activate. The announcement did not commit to availability or pricing for the new personal teller machines.
Celent thinks personal teller machines will be the next evolution of ATMs for three reasons:
- PTMs deliver improved customer intimacy with a modest cost increment over ATMs – still delivering lower per transaction costs than traditional branch transactions.
- PTMs will broaden the transaction mix versus ATMs – thus far an unproven assertion (I think).
- PTMs will likely show improved sales lead generation results over ATMs through the more personal interaction with a live teller.
But how and where will PTMs be used? Coastal Federal Credit Union used uGenius PTMs to fully replace traditional branch tellers in its 15 depositoy branches while extending hours of service – and at the same time reduced teller staffing costs by over 40%. An impressive feat! Coastal’s case study is available in a recent Celent report: Branch Banking in a Multichannel World Part III: Case studies in Branch Transformation. But, how many financial institutions will be so bold? We anticipate more surgical adoption such as branch vestibule self-service, mini-branches and replacement of conventional pneumatic drive-through mechanisms.
Regardless of the adoption mechanisms, the partnership is a good thing. uGenius delivered a solid concept and has the market research to suggest strong consumer acceptance of PTMs. But, it lacked the scalability and credibility to win over the larger banks. NCR changes all that. Moreover, the resulting NCR APTRA Interactive Teller ATM will be superior to the uGenius PTMs in several ways. For starters, the devices will be PCI compliant so consumers can authenticate the way they’re used to doing – using a debit card and PIN, rather than relying on a photo ID scanner. And, we expect the units will be fully Check 21 enabled and integrated with legacy teller systems. But these are window dressing compared to the primary differentiator. The new device isn’t just a PTM. It can function as a multifunction ATM or a PTM at the customer’s discretion (if so enabled by the financial institution). So, tellers may not be needed or used for the millions of consumers more than comfortable with self-directed ATM transactions. But for those in need of coaching or just plain preferring a human interaction, the PTM’s remote teller will be at your beckon call. This, in our opinion, is a natural evolution of the ATM.
- Chase is offering essentially free remote deposit capture (RDC) solution to small business customers as long as they make a requisite number of monthly deposits using RDC. The implicit objective is to reduce the branch traffic along with its related costs.
- Bank of America is piloting a new eBanking account which is free to customers using 100% self-service channels. Using the branch for those customers will result in an $8.95 fee.
- Chase began offering mobile RDC capability to iPhone users of its mobile banking solution. Mobile RDC offers a low-cost self-service deposit capability that, by definition, keeps check deposit transactions out of the branch.
- A small but growing number of credit unions led by Coastal FCU in North Carolina have extended branch hours, not by keeping the branch open longer, but by deploying vestibule personal teller machines (PTMs) that combine ATM like experience with real-time video conferencing with tellers housed in a centrally located call center. Doing so has provided extended branch hours at a fraction of the cost of keeping full-service branches open longer.
- Call Center
- Internet Banking
- Mobile SMS
- Mobile Web
- Mobile Thick client / App