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Cutting-edge ATMs are cutting costs at the branch

Adding more teller-like functions at the ATM has allowed FIs to meet the needs of more customers while reducing branch operating costs.

March 11, 2015 by Jim Ghiglieri — Senior Vice President, Corporate Communications, SHAZAM

Recent advances in technology have allowed the more than 400,000 U.S. ATMs to move beyond simple cash dispensing capability. Virtual tellers, cardless ATM access, lottery ticket and stamp dispensing, smartphone-ATM hybrids, varying bill denominations, and the ability to transfer funds between accounts are just a few features of new and enhanced ATMs.

Allowing consumers to complete more teller-like banking functions at the ATM has enabled financial institutions to meet the needs of more customers while cutting down on branch operating costs.

There are two factors behind the continued rise of the ATM and its resulting benefits to FIs:

Convenient, 24/7 cash access — Offering an easy-to-use, readily available option for cash withdrawals and deposits at remote locations has resulted in less foot traffic in the branch. This allows FI branches to increasingly focus on providing other financial services, including loan origination.
Cash recycling — Automating the cash handling process cuts down on costs for FIs. Additionally, when merchants recycle cash via an ATM, they get quicker access to their money, and there’s a ready supply of cash for consumers to withdraw.

Although the convenience and addition of new banking capabilities at the ATM has led FIs to replace some brick and mortar branches with less expensive ATMs, the traditional branch isn't going away completely; rather, advancements in ATM technology are serving to complement what the branch offers.

How to balance ATM capabilities with quality, personal interaction within the branch is important for FIs to consider as ATMs continue to get smarter and offer more enhanced banking services.

photo courtesy jack zimmerman | flickr