COMMERCE NOW

Summary: 

Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As we all know the banking industry continues to transform and FIs have to transform along with it, but this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment.

Related Content:

Blog: Interactive Video Teller: Another Dimension of Self-Service

Blog: The benefits of looped Cash Cycles: A Conversation with Volksbank Albstadt

COMMERCE NOW Website

Diebold Nixdorf Website

Transcription:

Scott Anderson:               Hello, I'm Scott Anderson and I'm your host for this episode of COMMERCE NOW. On today's podcast we welcome Diebold Nixdorf's Chris Gill, Senior Director of Global Advisory Services, Dawn Winston, Senior Product Manager DN Banking Teller Products and, Brendan Thorpe, Senior Global Demand Lead for Banking Software.

Scott Anderson:               Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As well, we all know the banking industry continues to transform and FIs have to transform along with it, but [00:00:30] this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment so let's dive in.

Scott Anderson:               Dawn, I'd love to start with you to sort of set the stage here. Can you give us a quick overview on the video solutions that Diebold Nixdorf has brought to the table today from a product standpoint?

Dawn Winston:                 Yeah, absolutely and Diebold Nixdorf is committed to [00:01:00] offering several different video teller solutions to financial institutions, banks, and credit unions and really we want to be able to offer what makes sense to a financial institution's business model and branch concept model. So if you, as an institution, are more interested in furthering your customer or member experience and making sure that you have that personal touch or the interaction with an employee at your [00:01:30] institution, then you would be more interested in something interactive video teller.

Dawn Winston:                 And that interactive video teller, essentially, allows the teller to drive the entire transaction session with the consumer standing at a service device, with the consumer just offering input or approving transactions, and that does allow the teller to have that longer touch time with your customer or your member. So they can do things like [00:02:00] improving that customer's experience or even doing things like upselling to your customer or member.

Dawn Winston:                 And then we do offer another solution that really is more about switching your staffing model. So maybe you want to transition some of your teller staff to do other roles like selling or marketing some of your products and you're more concerned about efficiency of your financial institution, so in that scenario they're not spending as much [00:02:30] touch time processing transactions. They really are focused on doing things like cardless authentications or overrides and approvals of checks and the transaction at the consumer's end switches back into a self-service mode freeing up more time for your branch staff or your central office staff to work on other roles within your institution.

Scott Anderson:               Great stuff, thanks for sharing that. And given some of the capabilities that our portfolio offers today in the marketplace, Chris, I'd like to [00:03:00] ask you from the perspective of our advisory teams and the customers you're speaking with, what are some of the more common use cases for the deployment of video by banks and credit unions today?

Chris Gill:                             There are really three different categories of use cases that we've seen in the market.

Chris Gill:                             The biggest one is really around improving branch operational efficiency and in this case the institutions are looking to impact the staffing costs in the branch where they're servicing the drive-up, and they may have certain tellers that [00:03:30] are servicing the drive-up. Whereby replacing the drive-up lanes with ATMs with two-way video, they can impact the staffing levels in the branch and reducing the costs of operating those branches. At the same time, sometimes, there are some branches where the drive-up area is removed from the lobby area, and it creates some inefficiencies in handling branch traffic, so a video solution there can again, help with the operational efficiency [00:04:00] and require less staffing.

Chris Gill:                             We do see there are some instances where there are certain types of branches where the use case is more compelling. We've had a couple customers that are looking at in-store supermarket branches where they're eliminating the teller counter and replacing it with ATMs with two-way video. That way they can focus in those branches on opening up new accounts and interacting with people in the store and not doing transactions so that's kind of [00:04:30] one use case in this category.

Chris Gill:                             Another one would be where they have branches in smaller markets or remote markets, where the low transaction volume branches, yet they still have to maintain a certain minimum level of staffing to handle transactional activity. And in those cases again, they could really eliminate the teller role but still provide the routine transaction capabilities but with video agents instead of tellers in a branch. So for the most [00:05:00] part improving operational efficiency is really the primary business case.

Chris Gill:                             Now, I think the use case around institutions that are looking at expanding their branches into new markets or to fill gaps in their existing markets, but they're looking to do it at a lower cost. So we've had discussions with a number of organizations that the opportunity here is to build a branch where they can still provide routine transactions using video, and they [00:05:30] have a couple people in the branch that are there for customer service and opening up new accounts. So it's perceived as a way of not having to spend as much money on a new branch, but they can still provide that face-to-face service albeit over video.

Chris Gill:                             And then the last kind of use case that we've seen is around improving customer convenience and hours of operations. So some institutions have video tellers that are available until [00:06:00] let's say 7:00 PM or even 10:00 PM, that provides a competitive advantage in the market where they can provide teller service at longer hours of service. Or we've seen a couple institutions that are in markets where they are competing against institutions that are seen in stores that are offering longer hours and so their competitive response is offering video to match their competitor's hours of operation advantage.

Chris Gill:                             So in North America, I would say those are really the key use cases. Now in, [00:06:30] outside of the US, we've seen, typically in the Middle East, where they're using video primarily from an expanded transaction set point of view. So for example, the Middle East where they can provide greater withdrawal amounts in cash leveraging video rather than enabling at an ATM, so they can provide longer hours for that but provide that capability leveraging an ATM with video.

Chris Gill:                             So again, in some markets they're looking at the [00:07:00] ATM with video as an opportunity to provide additional transactions that cannot be done on a standard ATM.

Scott Anderson:               Interesting, so lots to think about for financial institutions who are trying to make some decisions around what video might look like as part of the retail banking strategy. What do you think some of the key criteria that institutions need to consider when they're contemplating video as part of their retail banking strategy?

Chris Gill:                             So I think there are really three different areas that institutions need to consider when contemplating [00:07:30] video.

Chris Gill:                             Number one, is looking at their customers and members, currently serving or in the markets that they're looking at serving. So we've done some research in this area around consumer acceptance of self-service and video and not surprisingly younger consumers tend to be more self-service oriented and so they tend to have a higher level of interest in video than older consumers okay. So looking at your existing customer [00:08:00] member base, or the markets that you're in, it's important to really look at the characteristics of those consumers and are they more open to using alternative methods to doing their transactions than other segments are, so I think that's number one.

Chris Gill:                             Secondly, is important to look at what kinds of activities are they doing, are you doing in the branches and again,

Summary:

In this podcast we discuss the utilization of self-service and teller automation technology and the implementation of recycling to drive more efficiency and to improve the overall customer and staff experience.

Resources:

Self-Service Reloaded Guide

Diebold Nixdorf Website

Blog: Rethink the ATM-Reload Your Self-Service Strategy

Webinar replay

COMMERCE NOW pocast website

Transcription:

Scott Anderson:               Hello. I am Scott Anderson, senior director of Evangelism, and I'm your host for this episode of COMMERCE NOW. On today's podcast, we welcome Diebold Nixdorf's Jim Flannery, global advisor for Banking Channel Transformation and Tim Hoover, principle product manager for System Solutions. We're together today to spend time talking about how cash automation, and in particular, recycling can have positive impacts on today's branch environment. As we all know, the cost and controls around handling cash is a major factor in branch economics. [00:00:30] Tim and Jim have joined me to discuss the utilization of self service and teller automation technology and the implementation of recycling to drive more efficiency and to improve the overall customer and staff experience. Let's kick this off. Jim, I'd like to start with you. As you spend time with financial institutions of varying size and location, what opportunities do you see to streamline the cash handling processes for both customer and staff journeys?

Jim Flannery:                     Yeah, so any cash automation is going [00:01:00] to provide tremendous upside for a bank or credit union. Something like teller automation, which has been around for quite a while, we've seen lots of customers see efficiency gains, throughput improvements not only reduce cost but also provide a better experience for the customers, shorter queues, obviously shorter wait time, so those type of things. I think it gets a little more interesting when you start talking about self service recycling.

Jim Flannery:                     In [00:01:30] the US and in Canada, we'll say it's been a little slow for the banks to adopt that, but we're finally seeing enough cash coming in where the migration of transactions from the teller line to the device, which have traditionally been on the more costly side for the banks to do, it's finally hitting that tipping point where we're seeing an opportunity to attack that CIT cost, that high cost of cash in transit, which has been a sticking point for many FIs that they want to see maybe reduce.

Scott Anderson:               [00:02:00] Excellent, thanks very much. I think when we consider what's been happening over the last I'll call it five, ten years, technology has really come a long way in this regard. Tim, perhaps you can share with us your opinions around how recycling ATMs can augment the branch transaction processing.

Tim Hoover:                       Sure, Scott, and essentially let the technology do the work. There's now, with this technology, the ability for accounting, denominating, bill fitness sorting, counterfeit [00:02:30] detection and all that can be done at high speeds like 10 notes a second through this technology. In addition, this technology is now coming on the fourth, fifth generation of product, and it's very secure, efficient and reliable.

Scott Anderson:               Now that we've got technology and Jim, as you've said, there seems to be a little bit of take up hear in the North American space in particular and certainly this has been very prevalent globally, especially if we look at some western European [00:03:00] countries. I think about what traffic we see in the retail branches and some of the segments who place some real heavy demand on branch cash processes, really small and medium business come to mind in this regard. Tim, what advantages do you see with technology such as recycling ATMs compared to how we typically manage the segment over the counter or even with teller automation?

Tim Hoover:                       Well, Scot, we've seen some surveys, recent surveys that have shown that merchants now are more willing to use this self service [00:03:30] technology for their daily or even weekly withdraw needs. They would expect and they've mentioned that there would be less waiting in lines at the branch during peak hours or Fridays. It would allow for immediate credit for their cash or check deposits and then this technology ... And for merchants, there would even be the possibility even to promote for this SMB customer segment that maybe [00:04:00] the use of technology at 24 by 7 vestibules that are let's say close proximity to their business may be in malls or outlets, those types of places.

Scott Anderson:               Interesting, so really would I think probably improve how this small business customer would perceive the financial institution as giving them a little more access to automation to allow them to handle some of those cash deposits on a more frequent basis, so that makes a ton of sense to me. Jim, assuming [00:04:30] we have this opportunity to leverage recycling systems more holistically and to drive more transactions to self service, what positive impacts do you see for staff productivity and even consumer engagement?

Jim Flannery:                     Yeah, so industry wide, we see roughly 30% of deposits are occurring at a self service channel, so for the most part, consumers have become comfortable with depositing checks either at the ATM or more recently on their mobile device, but [00:05:00] historically, cash has always been somewhat of a sticking point, getting consumers to deposit that cash for whatever reason was always more difficult. I think some of the it goes back to the envelope deposit days of ATMs, where the trust factor of not have a valid count or inventory of what was deposited was something that consumers just wouldn't part with.

Jim Flannery:                     Now with recycling and having a growing set of consumers that are okay with cash deposits, we're seeing quite a few of those traditionally [00:05:30] cash deposits that were happening at the teller line or through the drive up teller now moving to the ATM. I think that really opens up two interesting points to be made is one, fewer transactions at the teller line allows the banks to be more judicious in how they staff their teller line, so being able to take potentially a small reductions in head count, which will reduce the cost of servicing. But I think the broader point is freeing up more staff time to spend with customers, having conversations, doing [00:06:00] investigative dialogue, where they can uncover potential gaps in products that consumer may be looking for, so really using that time that they're not spending head down, counting cash as a lower value transaction, now becomes an opportunity to cross sell and really have a more productive conversation that can deepen the relationship and hopefully create more satisfied customer.

Scott Anderson:               Interesting. Just to play on that, I think one of things we probably need to consider then [00:06:30] in the branches is some good lobby leadership so that the small to medium business customers who are coming in with bulks of cash understand that the self service devices now with larger acceptance and even recycling can support them. Anything you would add to that sort of thought process? How important is it for banks to be thinking about, banks and financial institutions, around lobby leadership and directing these consumers to the right use case?

Jim Flannery:                     Yeah, I mean clearly you need to understand the needs and the expectations [00:07:00] of the different segments, so in the research that we do, what we find is that generally younger consumers with above average income are kind of target audience for more advanced self service transaction and then as you get into older segments, and to some degree, segments of more modest income, their dependence on the attended teller, primarily the channel that has that extra help is going to exist.

Jim Flannery:                     Your point on lobby leadership is spot on. Being able to identify [00:07:30] who would be a good candidate for introducing or demonstrating the self service deposit versus some consumers just aren't going to change their behavior and they're going to expect that I guess we'll call it hand holding for even a routine transaction.

Jim Flannery:                     Now I think it becomes more interesting with the small business segment because traditionally when you look at the lower end of it, it's often the principle of the business that's doing most of the banking and their time is so important because they're running a business [00:08:00] and banking is not something that they enjoy doing. And when you think about recycling and having the ability to perhaps forgo standing in line at a busy time and use that device for despot is pretty intriguing. I think it becomes even more interesting when you start looking at other things that could enhance that, whether it's cardless or one-time use pins where they can send a runner to do the deposit where they'll get some sort of notification where they don't even have to go. They can send somebody else and it can be after hours or it could be during busy [00:

Summary:

Listen in as Diebold Nixdorf's Jerry Langfitt and Carl von Sydow, discuss how retailers are empowering their customers to shop and check-out the way they want, faster and without friction.

Resources:

Transforming Your Retail Business with DN Vynamic^TM Retail Suite

Retail Homepage

Join the Storevolution^TM

Transcription:

Jerry Langfitt:                    Hello, I'm Jerry Langfitt, and I'm your host for this episode of COMMERCE NOW. On today's podcast we welcome Diebold Nixdorf's Carl von Sydow, Director of Self-Service for Retail in the Americas. We will discuss how retailers are empowering their customers to shop and checkout the way they want. Faster, and without friction. Welcome, Carl, it's a pleasure to speak with you today.

Carl von Sydow:                Thank you Jerry, the same to you.

Jerry Langfitt:                    Before we get moving can you tell us a little bit about your background?

Carl von Sydow:                Yeah, well, my background is I've been working with retail for [00:00:30] 20, 25 years, and the last 15 has been very much focused around self-service. I've been working with retailers on self-service, from Australia all the way through Europe, Asia, and now I ended up in the Americas. I moved to Columbus, Ohio, last year. I'm from Europe, as you might hear on my accent, but I've been all over the world, talking serf-service. I'm really burning for that concept. I love the fact that the checkout process is something that everybody [00:01:00] is doing every day, but it's still something that evolves. It's a great challenge for the retailers to do this in a good way and meet the customer's expectations.

Jerry Langfitt:                    Okay. Well, let's dive in. I'd like to start off by talking about consumer behavior and how it impacts self-scanning. There seems to be a lot of journeys being done at grocery stores now. I can do curbside pickup, I can do delivery, I can do self-scanning. Why do I see an explosion of different ways to shop?

Carl von Sydow:                Well, [00:01:30] I always like to put myself in the shoes of the customer or the shopper and look at the customer journey. I'm really happy that we are starting at that point as well. We are not talking products the first thing we do, we're talking about customer journeys, and what makes a customer journey attractive for a customer. If a retailer can meet that then the customers will come to their stores. They will go where they can have their best shopping experience. For me, self-service in general is [00:02:00] of course a very attractive customer journey, and there are many different versions of self-service in customer journeys. Depending on which retail vertical you're in you have different pros and cons for different solutions, but the topic for today, hand scanning, for me, within grocery, it's the ideal customer journey. From a customer perspective, to start with, but also from a retailer's perspective.

Jerry Langfitt:                    Let's describe it real quick, just to make sure, since I've just experienced it recently [00:02:30] at a local grocery store. Let's just quickly, for the audience, what is hand scanning?

Carl von Sydow:                The concept is that the customer enters the store and at the point where you enter the store the customer will take a device in a bracket in the entrance, and there are two options there. You could have a loyalty-based solution, where you swipe your loyalty card or identify yourself somehow, and you will get a dedicated device with your name on it, basically. It says, "Hi Carl, [00:03:00] welcome to this store." Or you have a different solution where you can pick any device, and you're anonymous when you go through this customer journey. I prefer the first one, of course. There are many benefits with a loyalty-based solution. But you get this handheld device provided by the retailer. You typically could have a bracket on your cart where you can put this device, so you don't have to carry it around when you're shopping.

Carl von Sydow:                On that device you will have a big screen, [00:03:30] like on a smartphone, and on that screen you will have what we call a virtual receipt. On that virtual receipt you will see every product that you're shopping. You have an article description and a price and you have a summary and everything. What that means is that the customer will have full control of the transaction. The customer will always see and be aware of how much of my budget have I spent right now, with the products that I have in my cart or in my basket? As you go shopping you pick one item [00:04:00] from a shelf, you scan it with this device, and you put it in your bag. When you have done shopping you go to a pay station. That pay station could be a standalone pay station or you could also go to a normal checkout and pay, but what you do then, depending on the solution, you scan a barcode at the end, or just put this device that you have been carrying around, you put that device back in the bracket on the wall, and then the system [00:04:30] automatically will recognize you and your transaction, and you will pay at the pay station and leave.

Jerry Langfitt:                    Now, that seems pretty interesting, because I know that when I'm shopping I rarely keep track in my head what I've put into my cart. This really does provide the consumer information that directly affects their purchase. Do they buy more? Do they buy less? What do we see in the industry?

Carl von Sydow:                Well, across Europe, hand scanning is very a known concept. It's difficult almost [00:05:00] to find a retailer in Europe that do not have hand scanning as an option. There have been a lot of different studies made in Europe about hand scanning. There are a couple of significant messages in these reports, one of them being that the average value of a transaction in hand scanning is between 10 and 15% higher than a normal basket in a normal, manned checkout lane. We see the same [00:05:30] trend in hospitality, where we have kiosks nowadays where you can go and order your hamburger. Also in hospitality, with self-service and kiosks, where you have also full control of your transaction, you can do all the different up-sale ... modify your burger to whatever you want. We see a higher increase in hospitality, between 15 and 20%, actually, on the average transaction value. [00:06:00] Empower the customer with the transaction to feel in control, that will increase the transaction.

Jerry Langfitt:                    It really seems like it, because I know if I'm shopping with my wife and we're putting stuff in the basket we're usually surprised at the end, going, "Oh my god it costs this much," but if we had a running tally I'd be more apt to go just over. It does give myself, just knowing the information, I think I would probably [00:06:30] buy more as well, because now I'm fully aware as I'm going through this. It can affect my journey probably to the betterment of myself, and the retailer.

Carl von Sydow:                That's one of the great benefits with hand scanning is that you're in full control of your spending. You know exactly ... if you have a budget, you can follow it. With hand scanning I can go on forever talking about this, this is one of my favorite solutions for self-service. There are two other main benefits, one very important one being that [00:07:00] you only touch ... whatever you buy, you only touch the item once. That's when you take it down from the shelf and scan it and put it in your bag. If you go through the store in a normal way, to a manned checkout, if you count the number of times anyone, someone, touch your items, it'll be anything from three to four times. You will put it in your bag and you will put it on the lead-in belt at the checkout, then the cashier will scan it, and then you will have to bag it or someone will have to bag it. At least four times, [00:07:30] compared to one time when you do hand scanning.

Carl von Sydow:                The other benefit of that is of course ... and if you are a trained user in hand scanning you know all this ... so if you do, as you pack your bag, so you can have the heavy items first, like the milk packages or whatever, and then you put the produce at the end on the top of your bags. You can plan your bagging process yourself, instead of feeling very rushed at the end at the checkout, or have someone else [00:08:00] bag your stuff for you and the eggs are broken when you get home. It's another benefit.

Carl von Sydow:                The second big one is that the whole payment phase of a shopping journey is eliminated to like a minute, because the only thing you do when you checkout in hand scanning is that you pay for your transaction. You don't scan any items, or you don't do anything really, you just go to a pay station and you pay with cash or with card. That [00:08:30] typically is less than a minute. Overall, hand scanning is by far the fastest customer journey through a store, independent of number of articles, I would say. If you buy five or 50 it's still the fastest.

Jerry Langfitt:                    Now, doesn't this give us an opportunity for either promotion or personalization if I'm using a device and a loyalty program?

Carl von Sydow:                If you have a loyalty-based hand scanning solution all options are [00:09:00] available for you. To push advertising to

Summary:

In this episode of COMMERCE NOW, we are joined by Steve Gotz of Silicon Foundry, and we discuss how banks are increasingly creating new environments and structures to pursue innovative ideas and build new capabilities.  We explore one specific kind of innovation structure: the Venture Studio (also known as a Company Builder).

Resources:

Silicon Foundry

LinkedIn: Steve Gotz

Twitter: @stevegotz

Blog:

The Rise of the Venture Studio

Transcription:

Amy Lombardo:                Hello again to our listeners. This is Amy Lombardo, your host for this episode of Commerce now. Today I am joined once again by Steve Gotz, of Silicon Foundry, who is a known expert at helping organizations navigate the complex world.

Amy Lombardo:                So today we're going to discuss how banks continue to increase and create new environments and structures to pursue innovative ideas and build new capabilities.

Amy Lombardo:                So Steve, welcome back to COMMERCE NOW.

Steve Gotz:                        Hey thanks Amy, excited to be here.

Amy Lombardo:                Great. So it's been couple months here since we spoke last. So what have you been up to here lately?

Steve Gotz:                        So, just quick refresher for everybody, my background. I spent a long time launching new ventures for corporations. I've done that as an investor, an entrepreneur, university researcher, and a corporate executive. And most recently I was co-founder and COO of Pivotus Ventures, which was a venture studio I created with Ray Davis at Umpqua Bank. And coincidentally was acquired by Kony recently.

Steve Gotz:                        Currently a partner at Silicon Foundry, where I advise large corporations on their new venture strategies. In that role that we're talking about some of the ideas today.

Amy Lombardo:                Got it. Okay. So in our last podcast we focused more on transformation strategies. We gave examples, both from banks and even other industries on when they kind of when they hit that wall, that roadblock, and how they partnered with new and other types of organizations [00:01:30] to think about what's next.

Steve Gotz:                        Yeah.

Amy Lombardo:                So let's shift our conversation here and talk about what an organization knows they need to transform. Kind of this idea of migrating to a new business model, a new environment, and really the intent of Venture Studios.

Amy Lombardo:                So maybe we can start with discussing the evolution of this idea of like the Accelerator Business Model.

Steve Gotz:                        I think Accelerators is an interesting place to start. So Accelerators, as we know them [00:02:00] today, have been around for about a decade. And they were started during this rich period of famense, right? So it was 2005, a couple years after the dot com bubble. And in many ways, the Accelerators that started back then, and that was Y Combinator, Techstars, would be great examples, they laid the foundation of what's to come today, right?

Steve Gotz:                        And Y Combinator recognized that there were some economies of scale to be had by launching start-ups in a different way. And the Accelerator Model [00:02:30] is young teams, lots of bets, and a little bit of money. And when you do that well, you get really interesting companies.

Steve Gotz:                        And that's what we've had for the last decade but I think what we're seeing now, is things are starting to change. Technology is starting to change. Corporate strategy is starting to change, which is why now we're starting now to talk about the rise of Venture Studio. Which is a new forum that organizations are using to build new things.

Amy Lombardo:                Mm-hmm (affirmative). So does the Accelerator Business Model, does it kind of [00:03:00] compliment the Crowd Storming Idea?

Steve Gotz:                        Yeah. So, Accelerators as they started a decade ago, really about bringing young teams together to pursue big opportunities. And at that point if you think about it, right after the dot com burst there was a lot of opportunities so there was a lot of opportunities that the infrastructure had been laid to build things in a cost-effective way. So companies are using Accelerators as part of their innovation strategies.

Steve Gotz:                        Now what's happened in the last decade is [00:03:30] a lot of that low-hanging fruit has gone away. The ability to launch a business to scale quickly. The dynamics are slightly different in the current day and age. Because startups need data, they need distribution, they need access to capital. So what we're seeing is that traditional Accelerator Model evolved into the Studio Model. And Studios are different in a couple new ways that we can talk about them but we're entering this period of change when it comes to innovation strategies. And the Studio is just one manifestation [00:04:00] of the change we're seeing.

Amy Lombardo:                So talk to me a little bit about this change. Dive into that for me and just kind of talk to me about why and how.

Steve Gotz:                        So I think, in Silicon Valley, the era of "Move Fast and Break Things," is over. I think what we're starting to see are more diverse teams, in a broader sense, gender, age, background. I think there's a recognition that launching new ventures requires a diverse skillset. And it needs new kinds [00:04:30] of partnerships.

Steve Gotz:                        Launching a start-up by itself as an Accelerator doesn't work as efficiently as it could. Launching a new start-up in collaboration with a corporate that gives you data, that gives you distribution, that helps you access customers. That's really powerful.

Steve Gotz:                        So what we're seeing is more and more start-ups. More and more entrepreneurial teams and Venture Studio is coming together, launching new ventures in collaboration with corporates. And that's a really interesting dynamic that we're starting to [00:05:00] observe.

Amy Lombardo:                So is it still in these high-tech areas like Silicon Valley? Or where is the Venture Studios? Where are you having the most luck?

Steve Gotz:                        Hmm. So this is what's really interesting, right? So Accelerators largely, when they started, were concentrated in Silicon Valley, right? Y Combinator, in the Valley, Techstars in Colorado. What we're seeing with Studios is a dispersion, right? We're seeing Venture Studios crop up [00:05:30] across the country, across the globe. And oftentimes they're locating themselves close to large corporations.

Steve Gotz:                        So, High Alpha, one Venture Studio, and they're located in the Midwest. Primarily because the companies that they're building new ventures with are in the Midwest as well. There's another studio in Seattle called Pioneer Square Labs and they're up there and they're looking at really interesting consumer ventures, direct consumer ventures.

Steve Gotz:                        [00:06:00] So I think you're seeing the capabilities moving to the most natural place. And that may not be Silicon Valley. That may be somewhere else across the globe.

Amy Lombardo:                So even though these corporations might be in these major metropolitan areas, is the talent there as well? Or are these innovators being found then all over the world based on what the need there is?

Steve Gotz:                        Yeah, so, it's across [00:06:30] the world, right?

Amy Lombardo:                Okay.

Steve Gotz:                        It's where is the need?

Amy Lombardo:                Right.

Steve Gotz:                        And it's launching ventures as close to the need as possible, right?

Steve Gotz:                        So a good example would be Heidelberg Cement. So, Heidelberg is one of the World's largest cement companies. They have operations in virtually every continent. And they're launching a Venture Studio and what they're doing is really smart. They're building new ventures in country.

Steve Gotz:                        So the problems that you have with cement distribution, say, in Latin America and Brazil, [00:07:00] are fundamentally different than some of the challenges you have in a place like California. So it's natural to take your best people and put them at the edge. Put them close to those problems and say, "solve these problems and do it different ways."

Amy Lombardo:                Right. So clearly I know nothing about cement, so I can't even think of the next question.

Steve Gotz:                        Nor do I.

Steve Gotz:                        But think about this, right. Because there's a lot of similarities between the cement business and the banking business. [00:07:30] Right?

Amy Lombardo:                Oh both are important, here we go. Let's get what you're going to say here.

Steve Gotz:                        So look. These are both largely commodity businesses, and they're easily swappable, right? You could get a bank account from Wells Fargo, B of A, or any one of the 7,000 or 8,000 banks in America. And largely the product is the product. What can you do with that?

Steve Gotz:                        You can innovate around that experience. That's what Heidelberg is doing

Summary: In this special episode of COMMERCE NOW, we team up with Pymnts.com's Karen Webster and Diebold Nixdorf's Uli Seeman and discuss convenience stores (C-stores) and how consumers who only ever pause for gas, and never even set foot inside the store, are a major lost opportunity for additional sales. 

Content: 
Pymnts.com Feature Article:
Moving C-Stores from a Fuel-Plus to a Plus Fuel Model

Blog: Three Ways to Improve Loyalty in Fuel and Convenience  

Transcription:

Speaker 1:                           Some convenient stores are great when it comes to innovative experiences. But according to Diebold Nixdorf's head of service station and C-stores, the majority of them aren't. In this payment's original podcast, he tells Karen Webster that while the independent operators that dominate the industry want to innovate into the digital age, they are held back by the lack of off-the-shelf products that make that transition possible.

Karen Webster:                [00:00:30] Uli, thanks so much for making the time to be with me today. I'm excited to have our conversation about innovation in a very exciting space in retail, the convenience store. Thanks again for making the time.

Uli Seeman:                        You're welcome. Looking forward to it.

Karen Webster:                Okay. So let's take a trip down memory lane here, and talk about when convenience [00:01:00] stores first hit the scene. So actually two dates of note 1913, way long time ago when in Pittsburgh, there was a gas station, the Gulf gas station, which became the first gas station to sell food, so that technically checks the box. But from the standpoint of convenience stores that I think many people regard as the C-store experience, that was actually in 1927, when in Dallas, [00:01:30] the Southland Corporation, now 7-11, opened a store, small format store, to sell bread and milk and other things that consumers needed to buy, but couldn't buy because grocery stores had very different hours back in 1927. They weren't open on Sundays and closed very early.

Karen Webster:                So the name, convenience stores, were open longer hours and seven [00:02:00] days a week to provide that convenience. So here we are today, and the environment's different. So there a lot of places that are open lots of different times, seven days a week, for consumers to buy things that were once only available to them at these smaller format stores.

Karen Webster:                And I guess my question to you, Uli, to start things off is, how do you think convenience stores have evolved to keep pace with that change?

Uli Seeman:                        My view to it, [00:02:30] truly, yeah. You mentioned that they started very, very early, providing convenience, providing not only fuel to their customers, but past the implementation of paying at the pump, which is a kind of self-service, they lost a little bit of pace and did stop leveraging innovations and leveraging IT for the advantage. So yes. They are open in many cases 24 by seven, but it's still [00:03:00] the old-fashioned format: forecourt is selling gas, you can pay there, you cannot purchase anything from in store at the forecourt, you have to walk inside and you do your purchases.

Uli Seeman:                        No support of anything. Lately they are starting implementing mobile payments and loyalty schemes, and some kind of advanced technology but it's still far behind the rest of the retail industry.

Karen Webster:                Yeah I would agree with you, and there are certainly some chains [00:03:30] that have done a good job of trying to integrate that experience and use mobile technology, to do that, and encourage through things like coffee and other convenience items, the loyalty and repeat purchasing by consumers. But why has this wave of innovation left this format behind? Is it that they got comfortable with being [00:04:00] convenient? Because people were stopping for fuel, and therefore they had an opportunity to convert some of the people into consumers in the store, and they didn't think they needed to do any more? Why stuck in the past?

Uli Seeman:                        I believe, we have a few very, very good examples of advanced C-stores,  like Bucky's to name a few -

Karen Webster:                Yep.

Uli Seeman:                        They have plenty of more. They are really advanced, [00:04:30] they provide complete different user experience, than the store on the corner. I believe one of the key reasons they are all large enough to have capabilities to implement these newer services. Because, in many cases, these larger chains are using IT environments, IT solutions, which are coming out of, more out of the retail world than out of the C-store world - where the focus is only to the forecourt, or [00:05:00] mainly to the forecourt and very specific solutions have been installed. So these more advanced ones, they have higher sophisticated solutions, and with tremendous effort in many cases of professional services and customization, they can provide the services they have at the moment, which are exceptional.

Uli Seeman:                        They provide kiosks, they provide order terminals, but they are customized and limited to their chains, and [00:05:30] the adoption into the other piece of the industry is quite difficult. Although keeping in mind that about 50 to 60 percent of the C-stores, gas stations, you have are owned by single owner.

Karen Webster:                Wow.

Uli Seeman:                        So they don't have an IT company, or IT capabilities like the ones I mentioned before, these larger chains. For them it's very, very tricky, to get into such advanced technology.

Karen Webster:                So, how are they [00:06:00] able to do that? Because yes, I agree with you that the large chains have embraced technology - mobile apps, and are doing lots of things to engage consumers and to habituate that experience. Not only when people stop to fill up, but for purely the convenience of being able to pop in and pick up things, including now better food than what used to be the case back in the 1970's. But the 50 [00:06:30] percent of those who aren't that fortunate, how are they able to keep up and compete? What kind of technology should they be thinking about? Or are they thinking about?

Uli Seeman:                        First of all, to take a little comment on what you said healthier food, food in general - so all of them have the challenge, that they need to find compensation for the declining sale in tobacco. And in some areas which are the margin carriers, for these stores.  So they are trying one way or the other to come up with food, with healthy food, with prepared food, in order to maximize their business. So, now looking on the implementation side, on the solutions side, the focus is for them to find providers with more box solutions. Means where the implementation effort to adopt it to that particular owner or, [00:07:30] small chain is very, very limited and where they can do even where there are low capabilities of IT management.

Uli Seeman:                        And where they can do an adjustment in order make it, to customize their solution and have a look and feel for their particular store. On the other side, the IT, that solution provider, they are slowly following that trend, but many are coming out of the larger retail environment, larger retail customer scene, so they're [00:08:00] used to have a model, a business model, which is based more on professional services than on solution sales. So this gap is slowly getting closed, but it's very slow. That's why you don't find any implementations, many self check-outs, or kiosks in this smaller store format today.

Karen Webster:                To the point about margins, and the considerations for making these investments. I mean I think we all know that, margins on fuel purchases are quite thin. And so the [00:08:30] opportunity, is to drive people from the forecourt into the store to make higher margin purchases. On top of that there are obviously the labor cost associated with staffing these stores. So there is a lot of appeal, you would think just based on the numbers, for a self service environment. I think it could perhaps even help some of the brand imagery of some of these stores, that need to signal that there are [00:09:00] new innovations awaiting inside.

Karen Webster:                But is there such a thing as a turnkey self solution, for these independently operated players who have the most to lose frankly? Because people will stop to get gas but that's about it?

Uli Seeman:                        Slowly evolves in this direction. So coming from this big implementation into, like I mentioned before about solutions. Some of the providers [00:09:30] are looking into this, there are some first solutions in the market which are focusing truly to a low cost implementation, in order to enable them. Like you said, you're absolutely right the challenge ahead at the moment is the wage increase. In many cases everybody's discussing this fifteen dollar wages - in many cases it's already there, if you see the signs we are hiring, an attendant is making already in some metropolitan areas thirteen dollars and more, an hour.

Uli Seeman:                        [00:10:00] So they have to overcome this hurdle, and new technologies are providing from my perspective, quite sophisticated solutions in order to lower implementation

Summary:

Devon Watson and Thomas Karakalos discuss emerging trends in retail and banking services.

Resources:

Blog: Services for a Connected World

Diebold Nixdorf AllConnect^SM Services Transforms Bankdata IT Strategy

Diebold Nixdorf Website: www.dieboldnixdorf.com

Podcast site: www.commercenowpodcast.com

Transcription:

Amy Lombardo:                           00:00                    
This is Commerce Now.

Devon Watson:                 00:14                     My name's Devon Watson, chief marketing officer at Diebold Nixdorf. I'm joined this week by Thomas Karakalos, who's our head of the services business in Asia Pacific. So Thomas, why don't you give us a quick background. Who you are, what you do out here. Fantastic to have you on the show.

Tom Karakalos:                 00:30                     Thank you, good to be here. So I've been with Diebold Nixdorf for the last three years. So prior to the integration with Diebold, heading the managed services business for Asia Pacific.

Devon Watson:                 00:39                     Okay.

Tom Karakalos:                 00:39                     My history, my background is deep in the systems integration room. So, heavy in tier one, systems integrators ... did a decade there, then moved into more niche kind of data storage security.

Devon Watson:                 00:50                     Okay.

Tom Karakalos:                 00:51                     Working in a global role, driving engagement, driving sales, driving project management. From there, a little entrepreneurial blood in the system.

Devon Watson:                 00:58                     Fantastic.

Tom Karakalos:                 00:59                     So then moved out, did my own thing. Still having in the background, but then it got to the point where I said, "Okay, next challenge." The next challenge was, Diebold was transitioning at the right time. Jump in really help move this ship towards services.

Devon Watson:                 01:11                     Fantastic, fantastic.

Tom Karakalos:                 01:12                     Yeah. So the focus is all about managed services, yeah.

Devon Watson:                 01:14                     Great and that's a perfect segway. And I love the fact that you have an entrepreneurial background because, as I look at how banks and retailers are going to have to navigate all this change that's happening around them, you need some entrepreneurial blood there. Because we're solving new problems, we don't even know sometimes what the next problem's going to be and how to kind of navigate all these forces.

Devon Watson:                 01:32                     So talk to us a little about what you're seeing is kind of the emerging trends in the services business in managed services and how our customers, in Asia Pacific in particular, are kind of looking at the partners, like us, that they have to help drive their business.

Devon Watson:                 01:48                     What is it they're trying to get out of this general shift towards services?

Tom Karakalos:                 01:51                     Well, as we know the whole industry is transitioning. It's transforming at the moment. So an organization, be it either in the financial industry or a retailer, is really thinking about, "What is core to my business?" There are so many moving parts, there are so many technologies and input points that they're interacting with their consumers, that they really have to take a seat of, "Okay, I cannot do everything, I cannot be everything to all men. I need to really focus on what is my core business and I need to trust partners that can come in and support."

Tom Karakalos:                 02:16                     So, there is a tendency and an increased tendency towards outsourcing, that's something that we're seeing heavily in the region. We're seeing it on two sides, we're seeing organizations that have never ever outsourced anything that are actually saying, "You know what, I've finally realized, take the whole thing because it really isn't part of my core business." And we're also seeing a lot of organizations come together as consortiums and think, "How can we drive the investment that we've already put into either solution or product or technology," to bring high utilization, a better card holder experience for their people.

Tom Karakalos:                 02:46                     So that situation is opening a lot of conversations with us because, from a managed services perspective, when we come in and give them a business outcome, that's exactly what they're looking for. So, they're great conversations what we're having.

Devon Watson:                 02:57                     Absolutely, absolutely. Obviously, that storyline around focusing on your core competency and then taking the things that are ancillary to that and pushing them over into the partnership landscape, right to those subject matter experts, like ourselves, that can take that on. It brings a lot of operational efficiency of course, but one of the things that I think is particularly interesting, and I'd like to have you add some color to this, is the agility that that brings, right? So in particular, one of the things that I know we're working with customers around the world on, is things like branch and store lifecycle management, total implementation services, things like that. And to me that's also the cost story and it's a lot more of an agility story. So, maybe shed some color on that.

Tom Karakalos:                 03:38                     Absolutely. Well, I'll hit the retail one to begin with because that's more predominant. So if you think about store lifecycle management and our offering, which is new store opening,

Summary: 

Anna Istnick, Marketing Director of Global Banking Solutions at Diebold Nixdorf discusses self-service retail banking strategies with Diebold Nixdorf’s Brand Evangelist, Scott Anderson.

Resources:

ATM Solution Fitness Assessment

Blog: It's Time for Your ATM Solution's Annual Checkup: Take the Assessment

Transcription: 

Anna Isnick:                        00:00                     Hello, and welcome to COMMERCE NOW, your source for fintech conversations, along with emerging trends in the banking and retail industries. I'm Anna Isnick, marketing director of global banking solutions at Diebold Nixdorf. I will be discussing self-service retail banking strategies with Diebold Nixdorf's brand evangelist, Scott Anderson. Welcome, Scott, and thanks for joining me today.

Scott Anderson:               00:21                     Thanks Anna. It's great to be here.

Anna Isnick:                        00:24                     To begin, would you mind telling our listeners a little bit about yourself and your background please?

Scott Anderson:               00:29                     Sure. My background, I actually came from a retail banking history. I spent 10 years in a large financial institution, spanning everything from branch, call center, product management, you name it, and had a lot of great experience from a banker's point of view. I kinda get where they're coming from. I've probably spent the better part of 20 years in the self-service industry and working with folks like yourself over the last handful of years and looking at ways to help banks be more relevant in their consumers' minds.

Anna Isnick:                        01:00                     That's awesome. With that breadth of experience that you have looking at things, Scott, from the view of the banker, what role do you see the self-service solution, or ATM, playing in the market today in 2019?

Scott Anderson:               01:12                     That's a really great question and I think there are a few different lenses that the industry and bankers in particular, or even ATM deployers in general, can really look at the ATM, or self-service channel, through. First and foremost, I think the self-service channel is becoming way more strategically important to financial institutions. In particular, as they look at ways of engaging their customers on what is probably the most frequent touch point, that the customer engages with them physically. In addition to that, there are other financial institutions and deployers out there who really look at their ATM channel as a utility. It essentially dispenses cash. It was sort of the first branch transformation, if you will, 30, 40 years ago. I think what's really important when we think about that, equally to both camps, the importance of the ATM is critical, and the availability of that ATM and that trust factor that unattended 24/7 environment is going to be able to fulfill that consumer's need.

Anna Isnick:                        02:11                     Do you see it focusing more on the self-service as an experience? Or you called it a utility as an expense for a financial institution.

Scott Anderson:               02:19                     I think it can be both and I think it is both depending on who you talk to and where those financial institutions or deployers are in their journey of bank transformation. My opinion is that it is a strategic asset to a bank. If we look at the world of fintechs today, they are grasping at ways to enter the physical space and the physical world of their consumers. Banks have this huge opportunity to leverage one of their best assets, which is their physical presence being the ATM.

Anna Isnick:                        02:50                     So true. How do you feel like, from a security standpoint, that FIs are looking to really ensure that that experience is secure?

Scott Anderson:               02:58                     This is one of those areas where banks are grappling with very limited resources to be able to do what they need to do on a day-to-day basis. Security and protection of their brand in their consumers' eyes is critical. That's why I think it's important from a self-service channel perspective that not unlike having a vehicle, we don't let that go without being serviced on a regular basis. We don't let it go without rotating the tires. Most of us aren't even driving cars that are more than five or six years old. I think the ATM channel, because of the importance that it plays as a utility to dispense media and to accept media, but also as a strategic touch point, security and being up to date with security and making sure that that channel is fundamentally trusted by the consumer is critically important.

Anna Isnick:                        03:50                     I totally agree with you on that. I was reading recently about cars and how they said now the cars may slowly decline in the world today because with Lyft and Uber and everything going on that there's gonna be fewer cars. Do you see that analogy with ATMs, or do you see them more as that strategic thought?

Scott Anderson:               04:08                     I think there's a little bit of both going on there. My point of view is, until that last note or dollar is out of circulation, there really is going to be an ongoing need for ATMs. The management of cash and the ability to automate some of those processes instead of having that manual intervention that we have traditionally seen in the branches, the ATM will play a critical role. I don't think it's gonna go away. The operating model may change slightly. It may be, instead of owning it outright, maybe I rent that capability. Maybe I outsource that capability. Ultimately, the importance of that channel, both to fulfill the consumers' needs for cash, but also as that critical touch point in the strategic digital engagement model is still paramount.

Anna Isnick:                        04:54                     You mentioned that cash and how cash is still relevant today. Taking that channel and making it more efficient, do you feel that recycling will continue to grow across the globe and maybe get some pickup in the United States?

Scott Anderson:               05:07                     Yeah. That's a really interesting place. I know you spend a lot of time thinking about this as well and talking to some of the customers that you interface with on a regular basis. If we look outside of North America, recycling has really gotten a very large foothold. Because of the fact, most of the branch optimization, most of that getting automated processes off a teller line has taken place. Therefore, the ATM does a lot of heavy lifting for cash. As that becomes more and more prevalent in a certain environment, or an area, of the world, obviously cash management, cash in transit, all of those things that go along with mor

Summary:

Banks’ investments are leaning heavily toward technology upgrades – especially those that make self-service, digital banking easier for customers, as Karen Webster with Pymnts.com discussed in a recent conversation with Diebold Nixdorf Vice President of North America Solutions Heather Gibbins.

Resources:

Pymnts.com Article:

Diebold Nixdorf: Why Bank Branches Need to Move Beyond the Transaction

Blog:

Is Your Bank Embracing These Key Mega Trends 

Why Digital Is Important Right Now

The Future of Payments is Fast Evolving, but the Direction Might Surprise You

How Innovative is Your Banks Culture?

Summary:
In today's topic we're going to discuss the very interesting year of 2018 in the retail industry and we'll talk about what's to come in the new year.

Resources:

Blog:

How Self-Service is transforming Fast Fashion and In-Store Retail Experiences

Our Mobile Shopping Innovations are headed to EuroCIS

Transcription:

Amy Lombardo:                00:00                     Hello and welcome to COMMERCE NOW, your source for emerging trends in the banking and retail industries. I'm your host Amy Lombardo, and in today's topic we're going to discuss the very interesting year of 2018 in the retail industry and we'll talk about what's to come in the new year. I've got a special guest joining me today. It's Andrew Busby, one of the UK's most influential retail analysts. Hey Andrew, thanks for joining us.

Andrew Busby:                 00:27                     Hi, Amy. It's great to be here.

Amy Lombardo:                00:29                     Good. Let's talk a little bit about your background first. You have a 20 year plus career in the retail space. How did you get started? And talk to us a little bit about your passion?

Andrew Busby:                 00:40                     Amy, my career, I guess started about 20 years ago. I joined Kingfisher, one of the major retailers in the UK, and I was working there for a number of years. Retail I think, is really one of those things where you either love it or you're not so keen on it. And I just love the sector. It's so relevant to all of us. Unlike some of the others, we have relationships with our favorite retailers or brands that we don't necessarily have with utilities or telcos or whatever. So, they become part of our lives, and I think that for me is one of the great things about retail. And also particularly now as I'm sure we'll talk about, there are just so many things that are happening right now in retail, and lot of things which will common both in the US market and here in the UK and Europe, and I think a lot of the retailers are going through the same issues and challenges.

Amy Lombardo:                01:36                     Very good. Talk to us a little bit about those challenges. 2018 was a pretty interesting year here. You saw so many different store models go digital, offering different convenience options for consumers. With that said, how would you define the 2018 year for retail?

Andrew Busby:                 01:59                     I think that what we're witnessing ... and it is happening. I think this is a real watershed moment in retail that we're going to look back on. I think 2018 and going into 2019, what we're witnessing in front of our eyes is a transition from what I refer to as old retail into new retail. What I mean by that is that the old model, the more traditional retail models are quite hierarchical. They're commanded and controlled from the center, they're top down in a way that they're organized.

Andrew Busby:                 02:31                     And of course they were founded long, long before the Internet was ever around, let alone this online shopping and e-commerce that we see today. They've had to adapt. And of course then you get the new retail that doesn't have all the burgage, if you like, and the old and out of-date infrastructure that old retail has. They can build their systems, which are absolutely ... and also their structures, which absolutely fit for purpose around what they want to do. I'm thinking in particular of the pure play online brands, which have a ... I guess have a sense of purpose about what they are in business to do that some of the others perhaps don't, if that makes sense.

Andrew Busby:                 03:17                     I think that we're really seeing this transition, and it will continue over the next couple of years. I don't normally like to look too far than two or three years out, because I think the pace of change is so rapid that it's almost impossible to look further than three years out. We simply don't know quite what's going to happen or what's going to be adopted by the consumer. In one word, I would say that it's change, and in five words, I'd say it's change, change, change and more change. That's what we're seeing at the moment.

Amy Lombardo:                03:51                     It's interesting that you say you can't predict that far out because there are so many storylines that hit the new cycle this year that you never anticipated. We have everything from smart fridges and locker concepts and then you think, "Okay, well what's possibly next?" And have we created this society that it's almost become so convenience based. Will we ever go back to a simplistic retail model? I don't know.

Andrew Busby:                 04:20                     I don't think we will. I think we've got so used to the ease and convenience, which we're seeing right now. But of course the thing to remember there, which I think you were alluding to, is that that's getting even more convenience. Take payments for example, which is in some ways the most exciting part the retail landscape, but also its scenario, which is developing quite rapidly. And we'll get the point within the next few years where we'll see far more invisible payments. Whether you'd be filling your car up with gas, you'll just fill up and you'll drive off because it's automatically been ... payment's been taken.

Andrew Busby:                 04:57                     We're seeing far more frictionless experiences. Of course there's Amazon Go, which we know about, and we'll see more of that. I think ease and convenience in whatever way and forms that it takes is going to continue. And of course online and having deliveries to not just at home but to wherever we want, that will rapidly become the norm. And I think for ... one of the biggest challenges for retailers is having the supply chain and logistics capability to deliver very, very quickly to pretty much ... and by very, very quickly, I mean almost within the hour to almost any location.

Andrew Busby:                 05:36                     In order to be able to do that, they have to have in real time 100 percent, or as near to that visibility of their inventory, which almost without exception, none of them currently do. Some may come reasonably close to that, but ... so I think that's an area that we're going to see a lot of development going into.

Amy Lombardo:                05:55                     It's interesting, we were talking Christmas time, and I think one, two years back, whereby at the beginning of December, you get the messages that say, "Okay, if you haven't placed your order, it's not going to arrive to you by Christmas." Well, that's not the case today. You probably c