influencing atm usage through service design
DESCRIPTION
“Influencing ATM Usage through Service Design” outlines how a bank can design its service to minimize the use of ATMs belonging to other banks by its customers. We analyze the different scenarios in which customers would use the ATMs of other banks and create a service model to deal with each scenario. We also studied the usage patterns and pain areas for customers in the current system to devise a new service that allows customers to record, track and account for cash expenditure, which otherwise appears as a single-line entry “ATM Withdrawal” entry in the bank statement, without providing any details of how the withdrawn cash was used.TRANSCRIPT
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CASE STUDYINFLUENCING ATM USAGE THROUGH SERVICE DESIGN
Designing an ATM service that minimizes the use of other bank ATMs by a bank’s customers
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Guts Service Design Methodology
> InsightsInsights about the Market, Consumer Behaviour, Technology Trends, Industry Practices and Company’s Positioning, to identify gaps in service offerings
> Disruptive and Incremental Value PropositionsValue Propositions for radical, market altering innovation and incremental, experience enhancing innovation.
> ValidationValidate these value propositions through discussions with Client and interviews with customers
> Business CaseA business case for the viability and profitability of the short-listed Value Propositions
> PrototypingBuild Service Prototypes to test innovations
> Blueprint for DeploymentMake a blueprint for large scale deployment
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Service ProblemReserve Bank of India mandates that from April 1, 2009 banks cannot charge their customers for the use of ATMs owned by other banks.
However, when BANK A’s customer uses BANK B’s ATM, BANK B charges Bank A Rs.17 per transaction. Until now, this charge was passed on the customers.
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ImplicationsBANK A is a mid-sized bank with a small ATM network. In the absence of any extra charges, BANK A’s customers are likely to use ATMs owned by other banks which are more conveniently located and when BANK A’s ATM is not available.
BANK A is saddled with the cost of this usage, without being able to pass it on to customers.
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Service Design Goals
1) Minimize the use of other bank ATMs by BANK A’s customers
2) Understand ATM usage patterns and create a more meaningful ATM experience
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USAGE SCENARIOS> REGULAR USE ATM> HOME CITY EMERGENCY CASH WITHDRAWAL> OUSTATION CASH WITHDRAWAL
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REGULAR USE ATMThe ATM that a customer uses for regular withdrawal of money and to avail other services
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“
”Why do you use ATMs of other banks?”
Its located very close my house
My Husband has an account there, we go to the ATM together“There is always a long line at my bank’s ATM“Its on the way to my office“Because there’s no difference in service between my bank’s ATMs and other ATMs“Its FREE now! I can use whichever ATM I want“
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“ I didn’t know my card works at all ATMs… I read in the papers that now I can use it at all ATMs
…because earlier they charged me Rs.20
”Why didn’t you use other bank’s ATMs earlier?”
per transaction at other ATMs… now its free!
“
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HOME CITY EMERGENCY CASH WITHDRAWALWhen a customer runs out of cash and withdraws money from an ATM in an emergency, usually for a specific purpose.
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“When I’m out shopping and run out of cash
If I go to pay bills and don’t have enough cash“When I get out of a cab and don’t have cash to pay the fare“When I eat at a restaurant and find that I’m out of cash“
”When do you need to withdraw cash in an emergency?”
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ATM USE WHILE TRAVELLINGWhen a customer uses an ATM in a new city, while on a business trip or vacation
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“Yes, ofcourse ! I don’t know where my bank’s ATM is located and even if I did, who’s going to go looking for it?? Even if I have to pay a little extra, I’d use the ATM that’s close to where I’m staying or near the station
”When you’re travelling, would you use any bank ATM you find?”
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SERVICE FACTORSWhat influences the ATM usage behaviour of customers?
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locationcostconvenience
ancillary services shopping
restaurants
lon
g li
nes
at
AT
M travelBill Payment
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Insight 1Until the RBI mandate, the use of other banks ATM was chargeable. This Charge of Rs.20 was a ‘DISINCENTIVE’ for customers and made them use their own bank’s ATM except in an emergency.
In absence of this ‘disincentive’, the bank needs to create an INCENTIVE for their customer to prefer using their own ATMs.
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Incentivize the use of the bank’s own ATMsWhy should I use only my own bank’s ATM when using any ATM is free?
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REWARD POINTSCreate a system of reward points, awarded for using the bank’s own ATMs and redeemable for holidays, appliances and other products/services.This positive incentive replaces the earlier disincentive of a Rs.20 fee for using other bank ATMs
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COUPONSDispensing coupons (through the slip printer) with discounts on food and shopping, through marketing tie-ups with restaurants and shops.
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ATM BANK A
ATM BANK B
ATM BANK C
Rs.20 charge adisincentive to use other bank ATMs. Chooses to use own bank ATM and plans cash withdrawal
Pre-April 2009
Incentives to use own bank ATM: Reward points, discount coupons, ancillary services.
Post Service Design
Cost disincentive to use any bank’s ATM removed. Uses ATMs of other banks freely.
April 1, 2009
A
B C
Disincentives / Incentives
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Insight 2When there was a cost (DISINCENTIVE) to withdrawing money from other ATMs, a user planned cash withdrawals and was more careful not to run out of cash.
In absence of this ‘disincentive’, the bank needs to create simple, intuitive tool to encourage the user to keep a track of his cash balance.
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Help users record where and how much cash they spent
CREATE A SMS BASED SERVICE that allows a user to send an SMS to her bank account when she spends her cash. This service will not only allow her to record and account for cash expenses, but will also send her an alert when her cash balance falls below a certain amount (or even when she overshoots her monthly shopping budget!)
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The transaction details are recorded in her bank statement. This means she gets a break-up of even her cash transactions
She can set alerts to be notified by SMS if her cash balance falls below a certain amount. Or even if she exceeds a pre-set shopping budget!
Custom Alerts
Shopping, clothes, GlobusRs. 2,500
She SMSes a transactionto her bank accountA
C
B Record of cash transactions
Cash Management and Recording
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A bank statement currently only shows a single entry for ATM withdrawals. I don’t have any record of where the money was spent.
The SMS service will allow a user to message details of cash expenses to her account. This will be incorporated into the bankstatement to show detailed break-up of each cash withdrawal.
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Make all non-cash activities mobile phone centric. This includes checking A/c balance, seeing a mini-statement, stop cheque orders and other transactions. Promote this heavily so that a customer will simply reach for his mobile phone and think about going to an ATM only for cash withdrawal.
Only 70% of ATM activity is cash-withdrawal. 30% is non-cash and doesn’t require physical contact
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Insight 3
LOCATION and PROXIMITY replace COST as the factor for choice of ATM. The cost disincentive can be reinstated by providing a reward incentive.
But if it isn’t easy to find a bank’s ATM, the customer will forgo the rewards incentive in favour of proximity.
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ATM locations on callMake your bank’s ATM easy to find. Can I SMS my location and find the closest ATM? If I book a flight to Srinagar, can I get a map with your ATMs marked, along with my ticket? Can I just call and ask for directions to an ATM?
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ATM SignageMake it known that you have an ATM in the area. Put street signs, notices in shops and restaurants, location cards in hotel rooms…
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Insight 4
Apart from hard factors like cost and proximity, the usability of the ATM will also start mattering now. A bank cannot get away with a dirty ATM, peeling wall paint and badly designed User Interface.
Banks will have to work on improving the user experience inside the ATM. This will not only help retain their customers, but attract customers from other banks
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Design the ATM for everyoneMake the ATM accessible and useful for all categories of customers. This includes the user interface, bouquet of ancillary services, notices within the ATM etc…
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ATM Experience for YouthDesign an ATM experience that appeals to young users. While they don’t have too much money, they withdraw smaller amounts more often and can cost the bank a lot if they use another bank’s ATM
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“We use logic to prove and intuition to discover
Henri PoincaréFrench mathematician, theoretical physicist and ‘philosopher of science’