More bang for the buck: Why it's more important than ever to invest smartly in ATM technology
by Anthony Genovese, Vice President, Consulting Services, Compass Plus
This year marks the 50th birthday of the automated teller machine, a device that has served millions of people over the decades, and has advanced right along with the needs of the customer.
There are now an estimated 3 million ATM units in existence globally according to ATMIA. That's one per 3,000 people, installed at an average rate of 165 units per day.
But, in a world where mobile payments and digital wallets are becoming increasingly prevalent, it is perfectly natural to question where ATMs fit in a digital landscape.
While commerce in general has become more high tech — even to the point where biometrics such as fingerprints and retinal scanners are finding their way into the mainstream — customers have not yet lost the desire or, in some cases, the need to use cash.
But in a digital world, convenience is king, and customers still expect ATMs to provide them with the best possible service no matter where they are — and this goes beyond the realm of a glorified cash dispenser.
To meet the diversifying demands of customers, ATMs have been, and still are, evolving.
Innovation at the ATM is a global phenomenon, from floating ATMs (on boats) in Indonesia, to gold-dispensing terminals in the Middle East.
One example of change introduced to meet the needs of the U.S. market includes the increase in fee-free ATMs. Another is the integration of an ATM with a financial institution's other offerings as part of a multi- or omnichannel initiative, providing functionality such as the ability to access internet banking via the terminal.
As brick and mortar banks are no longer the first port of call for the customer — evident in declining numbers of branch locations since 2010 — an increasing number of ATMs are doing much more than just dispensing cash.
These devices are now fulfilling the potential that the name automated teller machine implies.
Today, ATMs can undertake a wide range of tasks that once would have required a human teller, such as bill payments and check-cashing.
However, knowing which facilities to provide requires an in-depth analysis of the wants and needs of today's customers.
The big banks, with their larger budgets and brand stability, are better positioned to take gambles on new features without fear of financial failure, and have taken cues from customer behavior to deliver "beyond cash" features.
It is now up to the challengers and niche players to find their own unique way of utilizing terminals to appeal to existing and potential customers by providing an engaging and useful alternative.
Any FI, independent sales organization or independent ATM deployer — whether large or small — looking to introduce new machines or update an existing fleet must aim to provide a wide array of services.
The customer must be able to see a tangible benefit to the service provided. Functionality must make the terminal and services offered stand out from a typical ATM experience.
This might include cardless transactions as well as location-based services, such as recommendations for movie theaters nearby or acceptance of donations for disaster relief.
As the only channel that allows FIs to interact directly with their competitors' customers, the ATM channel offers an opportunity not to be missed.
To fully capitalize on this opportunity, FIs must choose technology partners carefully. Not only must providers be able to offer all of functionalities on a single platform, but also, they must have a future-proof view of the industry.
Additionally, a provider must have a demonstrable understanding of global trends and how they might benefit an FI in a particular region.
This ability to decipher what "self-service" means in other parts of the world and apply this knowledge to a local market, affords an FI a platform for differentiation from competitors.
Of course, the solution also must be scalable and flexible to grow and adapt to emerging customer and industry trends.
This year is shaping up to be a big one in terms of how FIs diversify their services at the ATM. Institutions that invest wisely in technology that is relevant and valuable to their customers will look back on the ATM's 50th anniversary as the starting point of a new era of customer satisfaction and convenience.