Wells Fargo took its first shot at creating envelope-free ATMs around 2002, but the technology wasn't up to it. Optical character recognition couldn't read the words on checks well enough, and the machines jammed too often. So the Wells Fargo IT team shelved the idea for several years.
When character recognition improved, they took another crack at it, but it still took many iterations, working with hardware makers, to overcome the jams. They had to persuade ATM makers to upgrade to faster Intel processors to provide the personalized features Wells Fargo wanted, and they had to educate customers as to how and why they should use the new machines. Now the bank has 1,852 envelope-free ATMs in California.
"It wasn't an overnight success," says Jimmy Wang, a Wells Fargo VP in the ATM technology group. But the envelope-free ATM project was typical of Wells Fargo's approach to innovation, which its leaders describe not as a particular initiative or project but as part of its constant pursuit to bring something better to customers. Says Wang, "If we had a culture of 'good enough,' we wouldn't have developed envelope free."
It's been an extraordinary year in banking, with last fall's financial crisis requiring massive taxpayer-funded bailouts that included $25 billion for Wells Fargo. (CEO John Stumpf told Bloomberg Television this month it would repay the TARP loan "shortly.") Wells Fargo also cut one of the industry's biggest deals out of the crisis by acquiring Wachovia in a government-backed deal. Amid crisis, merger integration, and intense public scrutiny, how do you keep IT teams focused on innovation?
Modjtabai describes a culture that, for a group of bankers, seems more comfortable than you'd expect with soft ROI measures when it comes to customer-facing technology. Efforts such as showing a customer's three most-common transactions on the ATM screen don't drive incremental revenue, but they're what the bank thinks it must do to keep pace with customer expectations.
"None of them are about the next three-month or six-month return," says Modjtabai. "They tend to be about continually deepening our relationship to our customer, or retaining their business, or share of wallet. A lot of it is about sustainable opportunities with the customers."