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Bank ATMs Take Deposits, Spit Out Cash, Demand Fees

Analysts say unhappy bank customers will not be able to avoid fees

BACK in the days when waiting for a teller often meant a long line that snaked through the bank, at least the transaction was free. Now, automation has changed all that. Customers are queuing up for machines that gobble up deposits, spit out cash, and print balances.

But while today's lines are shorter, consumers' bank costs are higher. Given the explosion in electronic services, more Americans can expect to be affected.

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Consider this projection from the Ernst & Young accounting firm: The number of automated teller machines in the United States will increase 50 percent by 1997, to 135,000. Automated phone-service calls for account information, now 140 million per month, will soar to 250 million. And technology spending at US banks will jump by 21 percent.

Banks are looking for ways to defray costs. Take NationsBank, one of the top five institutions, which is slated to hike fees July 1. Customers using the bank's ATMs or 800 number will pay higher monthly account costs. "Why wait 30 days for your next bank statement?" asks a sign next to ATMs. "This ATM can give it to you in 30 seconds for only $2."

At any number of US banks, ATM fees can be as high as $1.50 per use and phone queries roughly one-third that amount.

Convenience devotees are protesting. "It's a major rip-off because it's my money on deposit, and they're already making interest off it," says an ad executive.

But, some analysts say, the price of faster service will catch up with those trying to avoid it. One businessman complains he just switched banks to avoid high fees and minimim balances only to have his new bank bought by a larger one. "Even if I change again, it will only be a matter of time before all the small, consumer-friendly banks are gone."

American Bankers Association spokeswoman Virginia Stafford says: "Customers demand more convenience and efficiency, but they have to make a decision about what they're willing to pay for." There's no shortage of choices, she adds, citing the 10,000 commercial banks and other providers of electronic financial services.

Yet, at all of them, employing people has become almost a luxury as technology does the job faster and cheaper. The First National Bank of Chicago charges $3 for each teller visit after four monthly free visits.

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The bank can't spare the labor: It laid off 11 percent of its retail work force last summer. It is encouraging clients to use the 500 ATMs in the area to free up human resources for other functions, says spokesman Thomas Kelly.

"Bank customers have come to expect virtually unrestricted access to bank services 24-hours-a-day from almost anywhere," says Robert Linsky, vice president of Chase Manhattan Bank in New York. By contrast, many savings and lending institutions close their doors by midafternoon and remain shut on weekends.

But consumers say they aren't willing to pay for mechanization despite easy access to ATMs and shorter teller lines. "That's my money," says Steve McCray, pointing at the ATM. He goes to the machine three times a week and uses his card to pay for food and other items roughly five times.

Some banks are trying to lure new depositors with more attractive terms. NationsBank, among others, offer options - such as maintaining minimum balances or a credit line - that can relieve customers of onerous fees. In NationsBank's case, the customer must keep $750 in the account or take out a $10,000 loan.

"It hits blue- and white-collar workers alike, because either the person doesn't have that kind of money saved in an account, or he's too sophisticated to leave it in a bank where the money doesn't draw much in interest," says an employee of a local bank recently bought by NationsBank.

Automation also exacts costs from employees, she says. In coming weeks, staff at her branch will be cut by half, leaving one teller, two desk assistants, and a manager. It's all part of cost-cutting efforts under way at institutions such as Bank of America, which offers depositors incentives to avoid teller use, and Citibank, which is promoting its personal computer banking and telebanking services.

But some diehards refuse to give up dealing with the money dispenser behind the bulletproof glass. For government employee Ben Dixon, depositing cash into a machine is not an option. So, despite frequent use of ATMs for withdrawals and check deposits, he still has to go in the bank.

Even local institutions that pride themselves on customer service are giving way to the impersonal. Najma Farooqi, a branch manager at Riggs Bank in Washington, says her tellers are happy to see their customers, even though the bank does not charge a fee for automated services. But its only a matter of time before Riggs, too, will have to give up its anachronistic ways.

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