Self-Service Lessons Learnt from Banking

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Ian Kerr discusses what self-service can learn from the retail banks’ experience of ATMs over the past 40 years. Since 1967, when Barclays introduced the first cash dispenser machine, ATMs have become the most utilised customer touch-point in retail banking. Not surprisingly, many businesses across various sectors look to replicate this success.
 
The use of self-service technology is becoming relatively common, for example in supermarkets and pay at the pump options in petrol stations, and many consumers are now familiar with this technology. Air transportation is another area where self-service is now increasingly prominent. Across all industries, self-service terminals can help reduce queuing and relatively costly employees can be utilised in areas of greatest added value. While the benefits of self-service are clear, companies must ensure that the roll out and maintenance of this technology is successful in order to generate the expected returns. To do this, companies must first establish what goals they want to achieve and also address the potential threats to customer satisfaction.
 
Though there are clear benefits to the successful roll out of self-service, such as increased customer satisfaction and reduced costs, poor service can result in customer dissatisfaction, tarnished brand reputation and lost revenue. To ensure the success of self service, organisations face four key challenges: providing reliability, usability and security as well as adhering to industry regulations. This is where the lessons learnt from the ATM industry can help organisations make the right decisions when rolling out their self-service offerings.
 
Rule number one: reliability
 
If organisations are asking customers to make the switch to self-service then this needs to be a highly robust environment and each self-service terminal must be reliable if uptake is to be successful. To achieve this reliability, extensive testing of the whole transaction process is required.
 
Those organisations looking to implement self-service have much to learn from the progress made in ATM testing over the past decade. ATM testing was traditionally a manual, laborious and, consequently, expensive process. However as the ATM increased in complexity, particularly with the introduction of Chip and PIN cards, manual processes became untenable and have been largely replaced by automated testing.
 
Manual tests can take up to one hour to complete and a full test cycle would take months to conduct, during which time an ATM network might experience high levels of undetected downtime.  In comparison, automated testing enables banks to execute around 4,000 test scripts in a few hours. For organisations looking to provide maximum availability to their customers, automated testing is essential as it allows a far greater depth and breadth of testing scenarios as well as a higher level of testing consistency. Given the automated testing solutions already developed for the ATM environment, organisations across all sectors are well placed to take advantage of these technologies and ensure that their networks are running smoothly from initial roll-out.

Barclays continue to innovate with their Branch of the Future in London

Customer is king
 
Usability is key to customer acceptance of self-service. To ensure successful uptake of this technology, customers must not only understand how to use it but also trust that it will work. Interestingly, Barclays Bank used the popular comedian, Reg Varney, in 1967 to publicise the first ATM’s deployment. This reflects the bank’s understanding that consumers need to feel a level of familiarity with self-service technology in order to be comfortable using it.
 
It is important that terminals and application software are designed with the customer in mind. Functional selections need to be easy and straightforward to reduce processing time for the desired transaction. Furthermore, software should be able to support multiple languages and be adaptable for those with disabilities.  These features have been incorporated by the ATM industry over its forty year history and are now an expected part of the banking self-service experience.
 
Industry standards: choice and innovation
 
The adoption of and adherence to industry standards has significantly changed the ATM landscape over the past few decades. For many years ATMs used the OS/2 operating system from IBM, running proprietary application software typically supplied by the manufacturer of the ATM itself. With the demise of OS/2 and the move to Windows, the XFS middleware standards emerged within the ATM industry and defined how application software interacted with the underlying hardware components. Adherence to XFS as an industry middleware standard enabled banks to execute a ‘multi-vendor’ strategy whereby they could invest in a single software application that could be deployed across hardware from different manufacturers.
 
This move actually encouraged innovation in both hardware and software by opening up the industry to third party software suppliers. This is similar to what happened in the IT industry with the deployment of ‘open’ operating environments like UNIX and Windows were introduced and encouraged the inter-operability of a much larger range of software applications. When implementing self-service technologies, organisations must be prepared to regularly update their technology in line with changing standards and be aware of the need to future proof systems where possible to ensure consistently high service levels. It is also likely that as self-service technologies become more widespread, the industry will increasingly see the value of open standards and interoperability in driving uptake and innovation across numerous sectors.
 
Security at the self-service terminal
 
Finally, the self-service channel must be secure as consumer trust is critical to successful adoption.  Security within the ATM sector has undergone substantial progress over the past ten years. The advent of the EMV standard which mandated Chip and PIN has made card fraud at the ATM significantly harder and contributed to the public’s trust, and indeed preference, to transact business through this channel.  Given that the potential for fraud at the ATM is significant, banks have rightly prioritised this aspect of service. However, other self-service terminals which can use a customer’s credit card will also need a high level of security to protect customer details.  Furthermore, as the use of self-service increases, higher value self-service transactions are likely to follow with time. Consequently, the industry must ensure that they prepare for this development in order to adequately future proof their investment in self-service technology.
 
The ATM has come a long way in the last 40 years and the self-service channel is increasingly critical for any company looking to reduce costs and drive customer service. While other industries face several challenges to the successful roll out of self service, it is clear that organisations across the board can benefit from the experience gained within the banking industry. These lessons will ensure that solid processes are in place, enabling organisations to fully realise the potential of their self-service channel.
 
Biography
 
Ian Kerr has been CEO at Level Four Software Ltd since 2006. Prior to joining Level Four, Ian held the position of Senior Vice President for Business Development at Accurate Software. Other experience includes senior sales and marketing positions with NCR, Deluxe Data, IBM and London Bridge Software.