As more credit unions use video tellers to reach a wider audience, NCR Corp. purchased uGenius Technology Inc., a provider of video banking software, to improve sales of such systems to larger banks as well.

"There is an increasing open-mindedness to use virtual interaction [for financial services]," says Edward O'Brien, director of the banking channels advisory service at Mercator Advisory Group. "I believe that [the acquisition] reinforces that there is a market for such products and services for financial institutions looking to expand their presence, reach and operating hours beyond traditional teller-based branch models."      

Since 2011, NCR and uGenius have collaborated on the Aptra Interactive Teller, allowing consumers to speak with remote tellers through a video connection. In January 2012, NCR bought a minority stake of uGenius. NCR, of Duluth, Ga., did not disclose the amount it paid for the minority stake or for the recent acquisition, which closed on Dec. 31. NCR announced the acquisition today.

NCR will use uGenius technology to improve its Aptra Interactive Teller, which allows customers to look and speak directly to a live teller through a webcam-enabled ATM. During the first half of the year, NCR plans to test the product with several top-10 U.S. banks.

NCR sees the procurement of uGenius as an opportunity to transform bank branches globally and "accelerate the pace of technology platforms to address a broader number of global opportunities," says Brian Bailey, general manager of NCR's branch transformation initiative. 

The more personalized human interaction given by personal teller machines, or PTMs, is one reason credit unions were drawn to the technology from the beginning, says O'Brien.

By striving for the personal touch, credit unions, such as American Heritage Federal Credit Union in Pennsylvania, reduce costs by having specialists serve multiple locations from one branch, Albertazzi says.

American Heritage has used uGenius' technology for its Personal Automated Teller (PAT) machines for three years. The machines handle an average 900 transactions per month, says Bruce Foulke, president and CEO of American Heritage. The machines also handle information transactions, such as when tellers verbally tell members what their balance is.

The credit union's traditional ATMs do about 2,400 transactions per month.

The biggest benefit is the cost savings, Foulke says. By putting a PAT machine where the credit union would want to build a branch, it is saving money both on tellers and on the rent it would pay for the location.

Loan officers can start loan applications with consumers via video banking; employees with specific language skills can speak with customers in their native tongue; consumers can have tellers walk them through the transaction at the PTM, plus the employees have an opportunity to cross sell. 

Big banks are now looking to offer the product as well, NCR says. The vendor plans to deploy its Aptra Interactive Tellers at large banks in the second quarter of 2013.

"The deployment to big banks allows them to extend reach into places hard to service with a traditional branch … including college campuses and corporate banking relationships," Bailey says.

Last year, Bank of America tested ATMs enabled with video banking in four markets and is now reviewing the results to make changes and determine the next steps, she says. Bank of America would not comment on specific vendor relationships.

"Our customers want to bank on their schedule, and we are always looking for new ways to deliver," says Tara Burke, spokeswoman for Bank of America.

Both Wells Fargo and JPMorgan & Chase work with NCR, but declined to comment on the acquisition or their own strategy for interactive teller machines.

These video teller machines are "merging automated transactions (cash withdrawals, deposits) with customer service (more personalized, human interaction via the video)," David Albertazzi, senior analyst at the Aite Group in Boston, Mass., wrote in an email. "It is a great example of multi-channel integration combining ATMs with the service center, a topic widely covered by the industry over the years."

All financial institutions "can have these employees serving multiple locations at once, without having to increase staffing or inconvenience customers, with limited hours of operations for such requests," Albertazzi says.

But the expense of purchasing the hardware and training tellers might deter some banks, says O'Brien.

While PTMs can provide the same services a traditional ATM can, Bailey says these two machines are not competing, since traditional ATMs are based on quick self-service transactions, while PTMs provide assistance with teller-based functions. 

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