New Machines Promise to Streamline, Transform Branching, Firm Says

MONTVALE, N.J. – A new type of machine that resembles an ATM but which offers a much broader array of services has been tested in the lobby of the $400 million Paragon FCU. Employees of Tellagent, the credit union’s wholly-owned CUSO which it created to develop the machine, conducted a transaction over the Financial Service Centers Cooperative shared branching network via one of the machines. “This is more than an ATM,” said David Garderner, director of development for Tellagent, “or maybe a better way of thinking about it is that this is the first real ATM, the first genuinely full-service automatic teller machine.” Gardner explained the firm distinguishes between its Financial Access Service Teller (FAST) machines and traditional ATMs by just counting up the different things a FAST machine can do. Essentially, Gardener explained, a credit union member, whether at his or her own credit union or through the shared branch network, can access the same accounts and receive the same services they could if they were standing in front of a teller, as opposed to the relatively narrow array of services available through a traditional ATM. Those include making deposits with cash or checks, as traditional ATMs do, but also making both cash or check withdrawals, the company said. FAST machines also allow the user to review images of checks; print their checking account history from different accounts; transfer funds between savings, checking and loan accounts; advance themselves money from loan accounts if authorized to do so though transfers to checking or savings accounts, print statements, reorder checks and stop payment on checks. Gardner explained that the idea had been percolating with Paragon FCU CEO Richard Rays for some time. He had been dissatisfied with credit unions having to make very large investments in brick and mortar branches as well as additional investments in time and money training additional teller staff. Shared branching solved some of these concerns by allowing credit union members to make transactions with their different credit union accounts at other, more convenient, credit unions. But it also brought new challenges as well, Gardner pointed out. “For example, it’s common knowledge that credit unions in shared branching do not cross-sell other credit unions’ members,” Gardner pointed out, “but increasingly credit unions want their tellers to sell credit union products and services. FAST machines will allow a shared branching credit union to provide shared branching services to other credit union members while continuing to encourage its own tellers to make additional sales efforts.” With FAST machines the majority, if not all, shared branching transactions could be handled outside of the teller line, Gardner added. Gardner pointed out that traditional brick and mortar branches can cost a credit union $750,000 to $2 million to build and bring with them recurring labor and real estate costs. The traditional approaches to these challenges – the ATM, information kiosk or phone connection – are typically not as full-service as a credit union member needs. The FAST machines can help meet those needs at a fraction of the cost. The current generation of FAST machines is the product of cooperation between Tellagent and four other firms, including FSCC, Gardner said. Tidel, the ATM manufacturer that was once part of the Southland Corporation and which is headquartered in Houston, manufactures the machines. TRM, the ATM and photocopying service company, provides the first and second line maintenance services on the machines as well as installation and operational support, and Ensenta, the software designer that works with FSCC provided the initial software to drive the devices. The machines are fully compliant with Visa and MasterCard’s most recent security requirements and with American with Disabilities Act regulations as well, the company said. Wave Of The Future? Gardner did not share what the machines would actually cost, stating that the firm merely wanted to introduce the ideas of the machines to credit unions and demonstrate what they could do. He did say, however, that most ATM manufactures sell ATMs with a price for hardware and a separate price for software. Tellagent tried hard, he said, to be able to bring most of the machines, including software, to the market for what other manufacturers might charge for the hardware for a full-service ATM machine. “Our eyes have really been on that smaller credit union that really could use an option for addressing its branching needs,” he said. “We have really tried to make the FAST machines something they could consider.” The wild card remains member acceptance. The U.S. ATM history has had a long line of innovators trying to add additional products and services to ATMs, such as the sale of other products and services, only to see their efforts fail in the face of widespread indifference from ATM users. But Tellagent believes the FAST machines will succeed where other efforts have failed, in part because the machines will not predominantly seek to merely sell new products but will instead offer access to accounts and products that the member would not have otherwise except through a face-to-face teller. The target users for FAST machines are not just members seeking cash but would include the broader pool of members who would seek the full range of credit union services, Tellagent maintains. Currently the machines are ready for roll-out and the CUSO is looking for eight credit unions who are members of FSCC willing to try out the machines in at least one of their branches, a process which Gardner said had been held up by a search for a check supplier. Gardner explained that in order for the FAST machines to serve shared branching members with checks they would have to have blank checks that could be imprinted with the necessary information, a requirement which proved difficult to meet initially. “It was really hard for us to find a firm that would supply us with blank checks,” Gardner said. -