Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Industry Perception, Optical Delusion

January 14, 2013
/   Insights

In Washington, they talk a lot about ‘optics.’ This has nothing to do with regulatory scrutiny, or government mandates on eyeglasses. It has to do with perception—how something looks, the way a particular story...

Social Banking: Blessing or Curse?

August 1, 2012
/   Insights

While the topic of Facebook and banking has generated plenty of heat (though not necessarily a lot of light), the debate seems mostly focused on two broad issues: The much-maligned IPO, and the notion...

Mobile Banking Engagement: Data from Digital Insight

June 24, 2013
/   Spotlight

Intuit Financial Services has been conducting a comprehensive and ongoing study of financial institution customers. From these studies, the company has been able to provide a deeper view of banking customer behavior across several...

We have smartphones, and we have ATMs. Why can’t these two essential technologies get along?

It’s a question we’ve asked on this blog before, and with good reason. While every other aspect of financial services has been revolutionized with blizzards of mobile applications, ye olde automated teller machines have remained immovable, like those phone booths no one uses any more. If anything, they’ve proliferated: We see them everywhere, from mega-malls to corner delis, and they still do pretty much what they’ve always done.

Woman Holding Phone 2Of course, that’s not true, and it’s about to become even less so. According to a new report released this week by the ATM Industry Association (ATMIA), the global trade group with 1,300 members in 50 countries, it could be the next market to watch for real innovation. There’s one area in particular that should be really interesting: mobile.

There have been innovations, of course. As we noted earlier, banks in Greece have added elements of social media, with personalized greetings and reminders of other people’s birthdays, enabling instant gifts. Some machines tout their use of solar power.  But fundamentally, it’s still about walking up to that hunk of hardware, pulling out that otherwise-useless debit card, and making a transaction.

For the record, we’ve been hearing for some time now about ‘contactless’ access, which builds on the promise of mobile technologies. Well, it’s here—kind of.

Diebold Federal Credit Union (DFCU) is pioneering what it calls “the world’s first ATM without a card reader or PIN pad that relies solely on mobile authentication.” In a nutshell, here’s how it works. The consumer scans a unique QR code at the ATM using a smartphone, and the ATM authenticates the user via cloud-hosted services to enable secure, cardless transactions. There’s no need for a card or a PIN required, eliminating the fear of card-skimming and shoulder-surfing at the ATM. (Diebold and white-label mobile wallet provider Paydiant developed the cross-channel solutions and hold complementary patents on the technologies.)

An ATM with no card reader sounds basic, but it’s a big deal. Transactions via smartphones and without cards removes a step that is basically very inconvenient and eases theft or fraud. We only accept it because we’re so used to it.

There are other benefits too. For a start, there’s heightened security: While the pho ne could be stolen or lost just as easily, there are new methods of authentication in this arrangement. Bank customers can verify their identity at the ATM by taking a photo of a QR code on the machines screen (yes, despite the frequent criticism, QR codes have some value).

Convenience arrives in other ways, too. By integrating the ATM with Diebold’s Mobile Cash Access (MCA) solution, consumers can actually pre-stage cash withdrawals via their smartphones, even to third parties. Just pick the person you want to send cash to from your contact list, and the app will send a text message to that recipient with a six-digit code. When that person goes to an ATM and enters this code, they’ll get the money. And for those who are environmentally minded, the new arrangement, we should remember, is paperless, delivering receipts via the mobile wallet.

Of course, the real action will be down the road. This is the mobile generation, which the new solution pays tribute to with flick and drag capabilities on the interface. Like most other advances in this all-digital era, the real innovation will come from users. As with Facebook, Twitter and a host of other ground-breaking services, we will routinely use the smartphone-ATM combo to do things we never thought we needed to do. So far, it’s just one bank in one market. Tomorrow, who knows?

All we needed was the technology to get here. Now it has, and it’s about time.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.