The WebATM Platform, Case Study Example

Abstract

Wells Fargo implemented a project to remove antiquated and unsustainable automatic teller machines and replace them with web-enabled machines that could be updated virtually and provide services that were not available with unconnected and disengaged machines currently out in the field.  While this poses opportunities for the creation of value-added services it also increases the amount of risk and exposure the financial institution is incurring by enabling the ATMs to the internet.  Many of the benefits achieved from WebATMs are incurred through the creation of opportunities but a decision to move away from an unsustainable legacy system also provided a push to implement the expensive project.

What benefits does the WebATM platform provide to Wells Fargo and its Customers?

The benefits of moving to a WebATM platform begin with the integration between the ATM and the other financial tools Wells Fargo utilizes in their business solutions.  The migration to a Microsoft Windows platform was the first step in enabling cross-functional applications to interact at an ATM location.  Other financial institutions were still utilizing older technology that did not keep pace with the ever increasing demands the customers were beginning to expect not only from their teller experience but also their entire banking experience.  The WebATM platform provides a better customer experience and provides a larger number of transactions with immediate and real-time results across their banking transactions.  The WebATM platform moved the ATM banking transactions from a supplemental asset to the in-person teller to a standalone system that provides all banking transactions a customer would require (Kaneshige).

This also benefits Wells Fargo as it increases the opportunities for customers to create transactions in the system and creates more opportunities for revenue.  The WebATM’s become a fully functional mini-bank where deposits, withdrawals and inquiries can occur and are reflected real-time.  This level of customer experience wills potential drive more customers to take part in their financial institutions offerings. The WebATM does also hold the potential for other value added services outside of just cash withdrawals.  The online access to other functions such as banking details integrated with loan agencies or insurance companies to complete transactions or pay bills through a WebATM are potential opportunities to earn revenue.  That functionality would not be possible on the antiquated ATM’s that other financial institutions utilize.  The ability to drive revenue from a resource while other banks have yet to grasp onto the benefits of the WebATM platform creates a competitive advantage and opens up another portion of the market that could be potentially lost without the advancements in ATM technology (Kaneshige).

What benefits does live interaction with a human teller provide that ATM’s and banking stations might not?

Utilizing a banking station instead of a live teller has benefits and downfalls associated with it.  When dealing with an in-person representative, the customer not only conducts the transaction but also builds a relationship with the teller and the banking institution.  The bank now has a face, a name and a personality that characterizes the experience of the customer.  Interactions with a person while conducting a banking transaction can also be more fluid and adaptable to a situation.  With a human teller they can use cognitive thinking and rationalization of situations.  If a person forgets their personal identification number then they will not be able to adapt the system to allow them to create a transaction without resetting their number, if that is possible at the banking station.  With a real person, the teller can adapt the situation and confirm their identification through other means to allow the transaction to occur and progress.  This ability to adapt and overcome unforeseen circumstances allows the customer to continue their transaction and salvage the customer experience (Newswanger).

A real person can provide a level of expertise and potentially create a value added situation for the institution by offering products or services that would be dismissed if just presented on a computer monitor.  A person can be trained and understand a situation when a person comes in looking for a certain product and then the opportunity to offer other services such as short term loans, refinancing, other savings or checking opportunities or many other services the bank may offer (Newswanger).

The in-person teller provides a life to the face of the institution.  This can enhance the customer experience and also makes the company fell like a caring entity.  They also have the potential to create opportunities for value-added services provided to the customer.

A new ATM machine can cost as much as $50,000.  Wells Fargo bought 6,200 ATM machines.  How do you think those who proposed this project justified the cost?

As with any new project there must be a cost/benefit analysis conducted to understand what benefits will be gained from a certain project and what those benefits will cost in the long run.  The first area to consider does not even directly include the WebATM platform.  The costs associated with the maintenance and upgrades to keep the current ATM’s up and running could become exponentially greater than the value they are producing for the company.  The older ATM’s are becoming less and less supportable and eventually will become unsustainable both technologically and physically.  The cost to upgrade and maintain these systems would be considered when looking at the new WebATM solution.

Along with the cost to actually maintain the older systems there is the cost for each unit to be upgraded, serviced, repaired and systematically checked.  Since each ATM was a standalone unit and was not connected in any way to the system, each must be physically visited by a trained technician for all service and upgrades.  That is if the upgrades were even possible due to the age and supportability of the systems.

The potential benefits of the system are two-fold.  The first is the increased opportunity for revenue.  This could create a focus of the WebATM as a single point of contact with the customer and is the face of opportunity every time a customer slides their ATM card.  With current customers other services could be offered at the time of the transaction or different aspects of the financial institution could be highlight.  If a customer utilizing another financial institutions card accessed the WebATM an opportunity to sway their banking needs to Wells Fargo could be initiated.  This information could be logged and utilized at a later date to target potential customers.  While these benefits are “soft” they are important to the strategic intent of the investment in WebATMs (Wells Fargo).

The next is the enhanced customer experience.  Mobile banking and having information at any given time has become the socially acceptable norm in business.  Having a WebATM connected to all the other financial systems providing real time information falls in line with customer expectations.  While Wells Fargo is taking advantage of this opportunity other banks are falling behind creating a wider margin between the institutions (Wells Fargo).

Why are WebATMs less secure than those not connected to the internet?  What are Avivah Litan’s concerns?

Security is always a concern when dealing with personal information especially when it comes to individuals financial circumstances.  Financial information is a high risk target in any market and by providing the avenue of the internet to gain access to this information it increases the opportunity for compromising that data.  The WebATM’s are providing another avenue for potential thieves to gain access to the secure data housed on the banks networks.  While the avenue for a security breach is the web Avivah Litan has other concerns regarding financial information.  The theft of ATM numbers and creating counterfeit ATM cards at off-line locations is a large threat.  By enabling a web-based ATM there is a portal for thieves to obtain ATM numbers for their counterfeit production (Mearaian).

In order to address these concerns, increased data encryption and security measures were put into place.  There is still an increased threat to information these concerns are meeting increased resistance to those threats.  With the increased opportunities of theft there are increased opportunities to create blocks and mitigation to those threats.  Web-based terminals will allow access to financial information but safeguards are in place to ensure only the right people obtain that information.

References

Kaneshige, T. (2008).  Wells Fargo banks on next-generation ATMs. Retrieved from: http://www.infoworld.com/d/developer-world/wells-fargo-banks-next-generation-atms-733

Mearian, L. (2005). Wells Fargo web-enables 6,200 ATMs. The windows-based infrastructure enables remote upgrades.  Retrieved from: http://www.computerworld.com/s/article/100165/Wells_Fargo_Web_enables_6_200_ATMs

Newswanger, P., (2010). Well Fargo rolls out its new ATMs. Retrieved from: http://insidebiz.com/news/wells-fargo-rolls-out-its-new-atms

Wells Fargo (2005). Wells Fargo: all ATMs now web-enabled, all banking stores with online stations.  Retrieved from:  https://www.wellsfargo.com/press/20050301_ATMS