STRATEGIC PARTNERS
Leading Chilean financial institutions are discovering that kiosks are a welcome complement to other self-service banking services, such as ATM machines and online banking.
February 24, 2002
SANTIAGO, Chile - Local and foreign-owned banks operating in Chile are set to increase their investments in kiosks over the next couple of years in order to cut costs and to provide their clients with better service.
A couple of years ago banks were the first companies in Chile to discover the benefits of kiosks, according to Fernando Irizarri, chief executive officer of local kiosk manufacturer Proyexion. He said financial institutions had the technological know-how and a growing need to let machines do more jobs at bank branches.
In an international comparison, Irizarri believes that Chilean banks use kiosks more than their counterparts in the United States because Internet-driven home banking is still a high-income luxury in Chile due to the wide income disparities that still persists among rich and poor.
"The PC (home banking) is like the car," Irizarri said. "It's for people with money, but the kiosks are like busses - more economical and more available, so most people can use (them)."
Investing in the future
One of Chile's leading banks Banco Santiago (NYSE:SAN) has been on the forefront in terms of kiosk deployment with most of its branches displaying kiosk machines.
"As we have a 50 percent Internet penetration among our clients we have not installed the kiosks for people that don't have PCs," said Banco Santiago e-business manager Juan Guillermo Lopetegui, "but more for the client who comes to the branch and prefers to do his transactions at the kiosk instead of waiting in line for a bank executive."
"Our kiosks can do all the transactions that can be done online from a PC," Lopetegui added.
"(Home banking) is like the car. It's for people with money, but the kiosks are like busses - more economical and more available, so most people can use (them)." Fernando Irizarri |
Irizarri predicted that technology would have a greater impact on Chile's financial infrastructure over the next few years despite the continuing gap between rich and poor customers.
"It's hard to predict by how much their (the bank's) kiosk purchases will increase over the next years because of the ongoing consolidation process of the sector, but the bank that does not invest in kiosks and other technologies (ATMs, Internet) will be left behind," he said.
Cost factors are seen as one good reason for banks to invest in kiosks. The kiosks represent a low-cost outsourcing of basic banking services from the human tellers to machines.
"The kiosks permit the banks to offer their clients a whole range of services 24 hours a day and seven days of the week," Irizarri said, adding that the kiosks are a very good complement to traditional ATM machines that have been around for a long time.
Providing clients with statements on their checking accounts, credit lines and credit cards represents some 80 percent of current kiosk use at financial institutions, followed by transfer of funds and utilities payments and product and service information.
Convenience banking
Kiosks and ATMs in special 24-hour areas are a common sight in Chilean bank lobbies and some banks, such as locally-owned Banco Bci, has recently taken a further step toward convincing clients to make use of all the alternatives that is on the bank's tech-menu.
At the end of last year Bci began to install tech-centers in high traffic areas such as supermarkets and commercial centers. The centers usually include at least five or six banking machines to offer the customer everything the bank can offer in terms of electronic banking, including kiosks, ATMs, and Internet terminals.
"We will continue to install them (tech centers) this year, both in the capital (Santiago) and in cities in the provinces," said Bci electronic banking manager Eduardo Paulsen.
Today the bank kiosks are heavily concentrated in the capital Santiago, but the trend is to install more kiosks in the provinces in lieu of opening more branches, said Irizarri. According to Irizarri, locally owned bank Banco Edwards - which was recently merged into fellow Chilean bank Banco de Chile - is one local bank that has been very savvy in using the latest kiosk solutions to provide better service for its clients.
Among the foreign-owned banks operating in Chile, Irizarri singled out FleetBoston Financial Corp. as one that has invested in up to-date kiosk technology.
Proyexion has some 35 percent of the Chilean kiosk market and is competing against international players such as IBM (NYSE:IBM), NCR Corp. (NYSE:NCR), and Diebold (NYSE:DBD).
