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What is Customer Analytics Part 2: Sourcing Customer Interaction Data (Part 2 of 4)
Author: Marc Borbas, VP Marketing - Inetco (www.inteco.com)

In our last ATMIA article on customer analytics, we highlighted three things you need to do customer analytics well. As a refresher, these were:

In this article, we are diving deeper into the first requirement.

Let's start with a working definition of customer interaction data. Customer interaction data is the sum of all the "digital footprints" a customer leaves behind as they complete a banking transaction.

Examples of these digital footprints include: when they logged in and from what self-service device, reading about a loan product on their tablet, checking their balance prior to withdrawing cash from an ATM, etc.

Now, in reading the prior paragraph, you're probably already thinking about all the different applications, systems, channel teams and departments who may have captured these digital footprints (and how hard it will be to get them all back out and organized into a "ready to analyze" state).

This is why it's so important to make customer interaction data readily accessible. You need to get a "data lake" together to facilitate your analysis. You have to find a way to either:

The first way is the classic data warehouse strategy – extract, transform, and load data from source systems into a single analytic database. It's like backing up to an ocean with a tanker truck, filling it with data and then trucking it your lake...over and over again. In our opinion, this strategy is not working for most banks, and especially for channel managers. The data is not readily accessible, requires IT service requests every time you need a different data slice, and the information is typically out-of-date before you receive it.

The second way is a new approach, made possible by streaming transaction data platforms. Data can be captured in real-time off the network as customers are interacting with various channel applications and systems. Nobody needs to change the underlying systems and the platform brings all the data together immediately for self-service access (we'll talk more about this in a future article). It's like redirecting a river into your own lake bed...

We also used the word "complete" in our definition above. This is because everyone keeps a record of a customer's interaction – that's what a core banking system is for after all – but it's too sparse for the kind of analysis we want to do. What ends up in your core banking system is more of an accounting record – funds moved from account A to account B – not a customer record. A customer record tells you all the various steps the customer took to get to that transaction (and ideally, why they did it).

A complete source of customer interaction data should "sessionize" all the digital footprints it captures so you can see this individual customer journey. A simple example is showing all the transactions a customer completes (and in what sequence and over what timeframe) from the moment they insert their card into the ATM, to the point the ATM returns their card.

So, by using a streaming transaction data platform to capture customer interaction data as it happens, we can develop a complete customer record. In our next blog, we'll look at how to enrich this core data stream with complementary data sources to make your analysis and decision making efforts even more easier.

If you are interested in learning more about how digital banking transactions relate to Big Data, you can watch this 60 second video, or email [email protected]

Mind the Gap: The Challenges of Managing a Multi-Vendor ATM Fleet
By: Tim Witt

The top three trends affecting fleet management in today's financial environment

Just about one year ago this month, Citigroup's CFO John Gerspach announced that he planned to close out 2014 with approximately 30,000 employees dedicated to working on regulatory and compliance issues.

That's a lot of bandwidth — and with good reason. Regulatory and compliance issues are not only critically important, they play a key role in both the business and technology strategies of financial institutions.

Now think about this: Within your FI's organizational structure, who's fielding the onslaught of incoming regulations and requirements from the CSA, PCI Security Standards Council, FSCO, INTERAC, Visa/MasterCard and the rest of the alphabet soup?

Whether you've got a good answer to that question or not, none of us can deny that roles and responsibilities are shifting. I've watched the financial industry go through a massive sea of changes over the past decade, and I know that these days, everyone is expected to do more with less. That can mean critical issues simply fall through the cracks. From my perspective, there are three major trends changing ATM network-management as we know it. Read on to see how your FI stacks up against this evolving landscape.

No. 1: Newer, More Complex Technology
Our CEO, Andy Mattes, has shared many insights on the Great Disruption Of 2014, otherwise known as migration to Windows 7. According to some reports, up to 95% of the world's ATMs were running Windows XP — and some banks have yet to make the switch. It was a costly, arduous process that we hope won't happen again.

Yet it illustrates the vastly different technological landscape we operate in today. Gone are the days of simple ATM operating systems like OS/2; we're working with more and more sophisticated systems, requiring updates, patches and support in real-time, along with software and hardware that can operate nimbly in an agnostic ecosystem. And as more and more transactions are migrated to self-service terminals, the devices must advance in complexity, too.

Simultaneously, the bar for service has been raised exponentially. Truck rolls and on-site technicians are no longer enough. Consider your smart phone: How many apps do you currently use? How many would you use if you had to go to the Apple Store every time one of them needed an update? We've managed the largest field network in North America for decades, but we also anticipated the need for real-time, 24/7 monitoring and updates to provide more effective lifecycle management and protection. It's the reason we introduced our Managed Services solution almost a decade ago, and the reason we're industry leaders in ATM monitoring thanks to real-time device management capabilities leveraging our software, services and dedicated data centers throughout the country.

No. 2: Security, Security, Security
We wouldn't be Diebold if we didn't talk about security. Today, security at the ATM is more necessary — and the threats are more diverse — than ever before. Whether it's the physical security of the cash inside the terminal, threats to software in the form of malware, or the enormous ramifications of skimming, every day seems to bring a new form of attack that must be dealt with.

In ATM Marketplace's 2014 ATM Software Trends & Analysis, among FIs who said they planned to change the size of their fleet, 87.9% said they wanted to expand their self-service network. That means a growing, enhanced network of terminals with greater functionality — most likely a multi-vendor network at that — which your organization must secure and monitor. And as transactions become more complex, there's an additional need for security around the new transactions and services within a bank's expanding self-service ecosystem.

Several companies have sprung up hoping to address the evolving ATM software and hardware landscape, but we see some major red flags with these non-banking-oriented companies. Often they're small operations, which means that an FI may have little to no recourse if the company under-delivers or underperforms on expectations. Additionally, and more troublingly, these vendors may not operate under the strict security and compliance protocols of industry leaders in the ATM market who have proven expertise in the field. As part of Diebold's ATM management solution, FIs receive the premium level of security they have come to expect from Diebold.

No. 3: Management & Overhead
A decade ago, we met primarily with dedicated ATM Ops groups at the banks we collaborated with. As roles have evolved and the dancefloor has become crowded with mobile and other remote banking options, we've begun meeting with a much wider range of departments. But most often, we're connecting with the IT department first and foremost.

For some FIs, this shift in responsibilities has created opportunities to re-evaluate the management of the ATM network, as IT groups traditionally focused on PCs, firewalls, routers and the like are being tasked with managing a vast network of terminals that includes hardware, software, security and services. For many teams, it's simply outside the scope of their core competencies.

Additionally, we've found that most FIs have, on average, eight to 10 vendor relationships in their self-service channel alone. Doesn't sound so bad, until you factor in the multiple person-to-person relationships within those partnerships, from the legal contact to the sales contact to the day-to-day steady state management. One executive we spoke with estimated he interacted with approximately 50 outside individuals, just to competently manage his self-service channel.

Many banks (or at least many banks' C-suites) might believe they're saving costs by using a DIY approach to ATM management. But we see time and time again that there are huge, not-so-hidden expenses in the form of administrative overhead, staffing and technology. We've designed a consolidated business process outsourcing solution specifically to address that challenge, and provide FIs with a turn-key management system that's simple, holistic, secure and compliant.

So what's an FI to Do?
In a recent survey, Forrester asked FIs to rate the top five business requirements needed to drive their branch transformation initiatives. Unsurprisingly, three of the top five offered significant opportunities for improvement at the ATM, especially from a management perspective: 44% stated the need for increased operational efficiency, 39% wanted increased channel integration and 34% noted the importance of managing costs.

Did any of those wants or needs make your 2015 wish list? Maybe they did. Or maybe your ATM fleet management challenges are something else altogether. We'd love to hear what's keeping you up at night. Talk to one of our Managed Services experts to find out how we can help relieve the burden of monitoring, updating and servicing your ATM network – and manage all those regulatory and compliance concerns along the way.

Just.Cash An Agnostic, Cardless Withdrawl Option - No Hardware Required
By: Robin Arnfield | Contributing Writer, ATMmarketplace.com

Consumers like the idea of withdrawing cash from ATMs via smartphone because it provides convenience and greater security compared with cardbased withdrawals. However, a key barrier to consumer adoption of cardless mobile ATM access is the current lack of interoperability – i.e., the inability of an accountholder to access any ATM worldwide via smartphone.

The cardless mobile ATM cash access services currently deployed allow customers to withdraw cash via smartphone only from their home FI's ATMs. Using third-party digital wallets to withdraw cash from ATMs also runs into interoperability problems.

Global networks

Using a card, consumers can withdraw cash from almost any ATM via global payment networks, yet there is a lack of network rails enabling customers to withdraw cash via smartphone from the ATMs of any FI or IAD that offers cardless cash withdrawals, or from third-party digital wallets such as Apple Pay, Samsung Pay or Android Pay.

A free software application from Miami, Florida-based Just.Cash that works on any manufacturer's ATMs solves the interoperability problem. The Just.Cash app does this by allowing all digital wallet providers and FIs to integrate Just.Cash into their mobile platform.

Just.Cash acts as a switch, routing cardless cash withdrawals from enabled ATMs to any issuer that supports Just.Cash. This allows FIs and digital wallet providers to connect to ATMs in a single global network and benefit from their own customers' (on-us) and noncustomers' (off-us) transactions. And most importantly, it offers customers ubiquitous cardless mobile access to ATMs.

Growing demand

There is growing interest among FIs in offering cardless mobile cash access at their ATMs, particularly as a way to attract and retain younger customers such as millennials who expect mobile access and security.

Mobile connectivity, the threat of data compromise, and the inconvenience of card-based transactions are driving the adoption of cardless mobile solutions. Allowing customers to withdraw funds from ATMs without cards also creates the opportunity to remit funds to unbanked customers around the world. This will help bring down remittance costs for customers whose family members rely heavily on their financial assistance.

Speaking to ATM Marketplace in August 2015, Richard Crone, CEO of U.S.- based payments specialist Crone Consulting, said that mobile ATM access is now mainstream in deployment in the U.S. FIs that have already rolled out cardless cash access to their customers include BMO Harris Bank, Diebold Federal Credit Union, and Wintrust Financial. "[Mobile ATM access] is definitely picking up, and in 2016 I see it growing exponentially," Crone said.

Need for interoperability

ATM Industry Association U.S. executive director David Tente wrote in an ATM Marketplace blog that in the U.S., and increasingly in other regions as well, interoperability is a huge issue for mobile and contactless cash withdrawals.

"In the contact card world, consumers have high expectations that any branded card will work at almost all ATMs," Tente wrote. "Until consumers are confident they can have the same expectations for mobile and contactless ATM transactions, demand for that option is not going to materialize. Open, nonproprietary implementation standards and assurances of interoperability are necessary before real growth in contactless deployment and consumer acceptance can be achieved."

"Due to ATM software reasons, mobile cash withdrawals from ATMs are still primarily on-us transactions," says David Smith, business development director at Italian retail banking software vendor Auriga.

Just.Cash

The free Just.Cash software application solves the interoperability problem that has resulted in siloed cardless mobile cash access services because it can be integrated with any digital wallet and mobile banking app. The Just.Cash application also helps issuers, digital wallet providers and ATM operators ensure greater security for their customers' financial information by eliminating the risk of fraud losses from skimming and shoulder-surfing.

"We can work with any FI's mobile wallet and with any third-party digital wallet," says Todd Lawrence, a partner at Just.Cash. "Just.Cash is the only independent solution offering ubiquitous mobile cardless ATM access.

We're working with multiple ATM manufacturers, processors and ISOs to best utilize the existing ATM network infrastructure. Triton Systems is our first partner. But we would love to work with all participants in the ATM industry, including FIs and digital wallet providers, to connect ATMs to the digital world through an interoperable solution."

"By accepting cardless withdrawals from digital wallets at their ATMs — for example, in convenience stores – IADs can attract consumers by advertising or sending promotions to customers before they select an ATM and before they choose how much to withdraw," Victor Cook, a partner at Just.Cash, says.

Truly mobile

"Although mobile payment services such as Apple Pay, Android Pay and Samsung Pay will eventually become common at the point of sale, consumers will still require cash in a plethora of situations, particularly overseas," says Lawrence.

"By making Just.Cash available to all digital wallets and FI banking apps, customers will have the benefit of enhanced security and convenience while being protected from the risk of lost cards – even an hour is a long time without access to cash sometimes. This only works through interoperable mobile ATM access. Otherwise, we'll spend the next 10 years building siloed systems that will then be connected at a later date at a significantly greater cost in terms of dollars and time."

When ATMs were first introduced, customers with the Plus or Cirrus symbol on their card had to find an affiliated ATM in order to get cash. Later, the vast majority of ATMs were connected at a great cost. Starting out with mobile ATM interoperability will reduce time to market and development costs while enhancing the customer experience, increasing the likelihood of adoption.

"Various FIs in the U.S. are implementing mobile ATM access, but only for their customers," says Lawrence. "In a siloed situation, it's more difficult to generate consumer adoption of mobile ATM access."

Lawrence points out the similarity between the current situation with siloed cardless mobile ATM withdrawals and the lack of interoperability among mobile payments platforms such as Apple Pay, Android Pay and Samsung Pay.

"What's hindering mobile payments providers from scaling is the fact that retailers either have to accept one or all of the mobile payment platforms, which can significantly increase integration costs due to the different technologies," Lawrence says. "In the ATM environment, Just.Cash leverages the existing infrastructure and existing transaction process.

"In other words, the execution process is nearly the same as what is currently in place, which works well, is familiar, and doesn't need to be changed. This lets FIs and digital wallet providers differentiate themselves through their own individual platforms and not through the underlying process, which is currently ubiquitous access to ATM withdrawals. We don't need 10 different ways to get money out of an ATM without a card."

Integration

Because it is software-based, Just.Cash can be integrated with any ATM from any manufacturer without the need for expensive hardware upgrades — it costs an estimated $4,000 to upgrade an ATM with an NFC reader so it can initiate withdrawals from contactless cards and NFC-enabled smartphones.

Just.Cash can also work without a smartphone, which significantly expands its potential markets and use cases, for instance, sending funds to unbanked recipients who need only a basic feature phone to use Just.Cash. Just.Cash supports QR code- and NFC-based ATM withdrawals, and is backward-compatible with ATM PIN pads so that an FI or digital wallet provider can send the user a one-time PIN to enter at the ATM in order to withdraw cash.

The easiest implementation of a cardless solution is this type of one-time code-based withdrawal, Cook says.

"QR codes potentially only need software, but the process requires significantly more development work for the processor and ATM manufacturer. Just.Cash transactions take place primarily on mobile phones, reducing wait times at ATMs and providing a very unique and powerful promotional opportunity.

"Customers will be able to receive offers and promotions from retailers when they are selecting which ATM they would like to use from the map in the Just.Cash app before they enter a store and choose how much to withdraw. It's hard to think of another opportunity where a customer is presented with a promotion directly before they enter a store knowing they are going to withdraw disposable cash."

The advantage of using one-time codes rather than NFC or QR codes is the global ubiquity of PINs as a means of authenticating ATM transactions. With the hardware already in place, it's possible to achieve scale for mobile ATM withdrawals today, not in five years, Lawrence says.

Remittances

Just.Cash provides a low-cost way for customers to send cash to a friend or relative for withdrawal from an ATM – for example, if a son or daughter is travelling abroad and has lost his or her card. "The one-time code isn't sent via SMS to the recipient, as this is insecure," says Cook. "Instead, the code appears in the recipient's mobile banking app or digital wallet or can be sent via other secure methods."

FIs, digital wallet providers and customers can set security parameters for sending one-time codes to recipients. "We recommend setting a small geographical area for the ATMs that the recipient can withdraw cash from, maybe a one-mile radius," says Cook. "We also recommend that the code shouldn't be valid for more than three or four hours. The default validity is much less."

In some cases, circumstances might dictate longer code validity periods and wider geographical boundaries, and the system can accommodate this, Cook says.

EMV

MasterCard has established a deadline of October 2016 for U.S. ATMs to migrate to EMV. On that date, liability for fraudulent MasterCard transactions at ATMs not enabled for EMV will shift to the acquirer.

Visa has set a U.S. EMV migration deadline of October 2017, after which counterfeit card fraud liability for fraudulent Visa transactions at ATMs not enabled for EMV will shift to the acquirer.

"In the run-up to ATM deployers completing the upgrade of their ATMs to EMV, when they face a heightened risk of fraud, Just.Cash definitely will help increase the security of their ATMs," Cook says. "Just.Cash completely eliminates the need for a card, which is the primary source of security threats. Additionally, the app doesn't exchange or see any customer information. Just.Cash is as secure as logging into a mobile banking app."

Triton Systems

Long Beach, Mississippi-based ATM vendor Triton Systems is providing Just.Cash free of charge with all of its software, including EMV software upgrades.

Triton has integrated Just.Cash with RL5000, RL2000 and FT5000 ATMs and says it plans to have Just.Cash available on all new and existing ATMs.

Just.Cash will be included in Triton host software as an option that can be activated by the operator. Just.Cash is also talking to other ATM manufacturers and processors, as well as digital wallet providers and FIs, about integration with its software.