Today, banks need a solution that could provide banking services at an affordable cost to the huge unbanked population and allow the rural populace to manage their finances better and more securely. The enigma lies in choosing the right channel, as every channel comes tagged with an incremental cost. With satisfied self-service customers, cost-effective cash depositing, and staff spending more time creating revenue rather than handling cash, a bank can gain many benefits from its long-term use of self-service channels. Now, having been armed with innovative technologies like voice biometrics and video banking, intelligent teller machines or iTMs will revolutionize customers’ outlook towards self service banking.

The relative transactional cost advantage offered by self-service channels augmented with enhanced customer service experience and lower transaction costs has served as a catalyst in the evolution of self-service channels. The ubiquitous ATM, with a global installed base of 2.039 million (2009) and incremental cost benefits as compared to branches, emerges as a panacea. Many institutions are piloting or deploying advanced technologies like mobile banking, video banking, WAP banking (mostly in Europe), and I-mode (specially developed by DoCoMo in Asia) in an effort to woo customers. One self-service channel that stands out with respect to acceptance and penetration is the ubiquitous ATM.

An iTM is a technology that would transform cash dispensing ATMs into a preferred choice for customers’ complete banking needs. An iTM, the latest pedestal in the service delivery innovation, comes armed with an array of futuristic service support technologies. An iTM will enable banks achieve the much sought after financial inclusion and penetrate into regions where setting up of branches was difficult, thus helping them significantly increase their customer base.

iTMs can help banks reach out to untapped markets, saving investments in traditional brick and mortar branches. It would also reduce the physical infrastructure costs, operating costs in terms of number of personnel required, savings in terms of systems cost, and other facilities that ought to be provided to a branch channel. Having a multilingual video support, an iTM would make it easier for the rural people to follow the instructions given in their language and in executing their banking transactions. This would guarantee tapping into the unbanked populace and converting customers from the bottom of the pyramid. Also, the ever-demanding global village consumer is quick to shift loyalties if one or more of his or her banking needs are not being met by a particular bank. An iTM, with its 24x7 audio and video assistance, would augment the banking experience by acknowledging and attending to the banking needs of these customers. Cash-handling accounts for about 20 percent of a bank’s total annual cost and iTM acceptability will reduce this manifold.

Biometrics and high end transaction and deposit systems will provide unsurpassed security features that guarantee safer transactions, which is most sought after by customers. The integrated format augments cross selling and upselling of other financial products, making symbiotic convergence easier. Banks will be able to track the buying preferences of customers and bundle their offerings accordingly. Studying these behaviors also open up revenue doors for the allied industries, like insurance.

iTM is a powerful channel that would enable mutual reduction of costs and enhanced financial inclusion at the same time. Unprecedented security features will address the most pressing need of a secure transaction channel and will amplify customers’ acceptance of iTM. iTM will bring about the genesis of a new self-service channel where customers can execute all their banking needs - be it account servicing, loan application services, and check or cash deposit or withdrawal facilities. This will eliminate paperwork, unfreeze human resources, and reduce customers’ reliance on costlier channels, saving millions to the bank.

The banking industry is reviving itself from the aftermath of the recent financial crisis. Cost attenuation, banks acknowledge, have to be tackled with utmost prudence and investment in self-service channels warrant the same. The next logical evolution in self-service banking is the intelligent teller machines or the iTMs. The upgradation of existing ATMs and the implementation will be critical. However, it ought to be dealt with as a onetime outlay. The imperative concern will be of the infrastructure capability of the respective banks in terms of the new and existing databases, integration of new applications with the existing IT backbone, modifications to the existing IT strategy, and the banks’ Information Security Management System along with continual maintenance from a BCP (Business Continuity Planning) standpoint. Implementation has to be taken as a transformation event for the entire business and not in silos as a single process initiative. Costs, undeniably, will be a concern but the apparent benefits will definitely outweigh it.

<>Krishna Chaitanya and Sujay Maskara, Consultants at Global Research Centre for Consulting (GRCC), Wipro Consulting Services. They can be reached at
krishna.chaitanya5@wipro.com and sujay.maskara@wipro.com