October 29, 2010Kiosks with a personal touch could replace ATMs: VerizonA major telecom firm is predicting that technology and other events will dramatically change the financial services industry in the next 10 years, with banks pushing customers to perform more self-service. Kiosks with a personal touch could replace ATMs: Verizon | selfserviceworld.com A major telecom firm is predicting that technology and other events will dramatically change the financial services industry in the next 10 years, with banks pushing customers to perform more self-service on their accounts through interactive kiosks and mobile phones. Verizon Business, a research arm of the telecom giant, recently released its prediction on changes impacting banks in its report "Top Trends in Financial Services," a briefing on the 10 changes it believes the financial services industry will experience by 2020. These changes will be driven by "(t)echnology advances, regulatory changes, demographic shifts, and digital lifestyles and work-style revolutions," according to the report. Several of Verizon's predictions don't touch on the self-service or kiosk industry. For instance, few will be directly impacted as the trading markets become more liquid and volatile. Still, banking customers will turn to self-service as the dominant way they conduct their financial transactions, according to Verizon. In the last decade the typical bank interacted with its customers through several channels — the branch, ATM, contact center and mobile phone, says Raj Dhinsa, managing principal, with the financial solutions group at Verizon Business. "Now, banks are building up mobile and social networking. Those are trends that will shape the customer experience." Kiosks will come to replace many ATMs and be used by banks more widely due to their mobility, interactive abilities, and because they are cheaper to operate than a branch, says Dhinsa. "The next step is the digital commerce kiosk with video. In a few years it will be interactive and offer bank customers concierge-type services, say tickets to a play or personal analytics to drive (financial) products," Dhinsa said. The kiosk will perform the tasks now conducted by ATM — dispense cash, accept deposits and so on — but also provide more functionality, such as showing videos and advertisements tailored to each bank customer. Dhinsa believes this personalization will be made possible because kiosks will be equipped with biometric readers that authenticate the consumer, providing greater security than a PIN. Kiosks also offer convenience to the bank because they can be installed relatively quickly and easily at events, say a marathon or county fair, or any other place consumers gather. Verizon also suggests that "transactional self-service will become the norm" for banks as consumers increasingly use mobile phones, the Web and their home telephone to conduct their financial business. More consumers will visit neighborhood branches for advisory services rather than depositing a check or getting cash. Another finance area that will be greatly impacted by technology is payments, with consumers shifting to digital payments and away from cash. Dhinsa questions whether today's payment system made up of credit card issuers and processors will remain the same. "Merchants and consumers will look to refinements of the existing payments sector," he said. "New technology like the smart phone could become a wallet. Retailers want to be prepared for that." The Top Trends document doesn't state directly whether Verizon and other carriers could become payment processors if consumers use their phones to make purchases, as many predict. However, Dhinsa and his team predict that "strong non-traditional competitors will emerge both in retail and payments, threatening current business models." Banks will try to grow their base by using mobile phone technology to serve the unbanked and under-banked. Many of these consumers have phones but not bank accounts, offering an in to banks seeking non-traditional customers. One sure-to-grow product is international remittance, allowing the consumer to send money around the world using their mobile phone, says Dhinsa. In addition, advances in security means financial firms will migrate more of their technology infrastructure to network providers, according to Verizon. The network will be a "strategic business infrastructure platform" where banks control the delivery of services, locally, nationally and globally.
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