Blog
Back to the future; ATMs still must provide the cash!
October 31, 2013 by Richard Buckle — Founder and CEO, Pyalla Technologies, LLC
It's always a treat to return to Sydney, Australia, my former home town, despite having to first pass through immigration and customs and then battle to make it through the crowds anticipating the arrival of friends and loved ones.
Sydney airport has witnessed considerable progress and getting around there is now a lot easier. Fortunately, there are numerous ATMs, and for travelers unfamiliar with the Australian economy, you need plenty of cash — it's now among the most expensive cities in the world to visit.
There are many symbols of progress in Australia, but watching a mechanical "dragon" eat a building near my hotel on Australia's Gold Coast provides stark evidence of changes underway. With mechanical jaws, steel ridges like teeth, and exhaling mists of water vapor to suppress dust, it would prove hard for children gaping in awe not to believe in dragons!
Ripping out the old and replacing with the new is among the most basic of instincts, no matter what the practice. Be it buildings, automobiles, video equipment, phones or computers — we all want to surround ourselves with the latest.
While it was very easy for me to address a potential marketplace for luxury ATMs recently and dispel any thoughts a vendor might have that such a market exists, trying to explain to colleagues and friends alike that new ATMs are better than old ATMs is not as easily accomplished.
However, as we look at what is available, the question needs to be raised — should we be looking backwards as we consider the future of ATMs? Is there anything that ATMs of the past can tell us?
Costs continue to determine the success or failure of an ATM; capital expenditure is still an item CFOs look at long and hard before any agreements are reached. Yet some of the properties of new ATMs I still find questionable — an ATM alongside the entrance to my Gold Coast hotel blasted promotional advertisements as people walk by. So much so, that I deliberately distanced myself from the offending contraption each time I left the hotel.
Progress? Perhaps to some yes, but to others like myself, totally unnecessary and unlikely ever to draw me in to pursue a transaction.
Ripping out ATMs to reduce costs does occur as former networking protocols (once viewed as the industry standard) have become legacy. ATMs that had been dependent on IBM's SNA for so many decades have been pushed aside — if it wasn't easy to swap out the communications controller and upgrade the networking software then the residual value of these older ATMs dropped to zero pretty quickly.
When it came time to ditch PS/2 controllers for Windows-based machines it facilitated the upgrading of the network protocols, but even so, many ATMs warranted little more than to experience the wrath of a mechanical dragon's hydraulic jaws.
Costs and technology incompatibilities aside — the issues are more complex than that — ATMs should no longer be considered as simply one technology or even one product. There are now families of ATMs aimed at different markets and addressing the needs of different communities.
There are probably five or even six different types of ATMs, from simple cash dispensers to full-function units that duplicate the services provided by a branch office teller. There are those that are mobile, capable of being installed anywhere, including special events. There are many colors (apart from white and gray) of ATMs as well, denoting different brands.
However, introducing a new line of ATMs that solely dispenses cash is not a step backward. There will always be a market for such devices. Surrounded by out-of-control bushfires along Australia's east coast this weekend, I am reminded of just how important getting at our cash can become; losing everything to the inferno changes priorities, and puts cash at the top of the list.
Greater variety of bills dispensed is always high on my list. Adding video and connecting to video services may look modern but certainly doesn't put to shame less capable ATMs; sure, I would like to see the very same user interface as may be on my laptop or tablet but not every time I use an ATM — I just want cash from the ATM, and now!
The introduction of biometrics may represent progress to some and may be the only way to validate a transaction. But even here, this is not anything new or with universal appeal.
My point is that as long as cash is king, ATMs will emerge in every color and style imaginable and with or without similar functionality. They will be at home both in very sophisticated markets and, as we say here in Australia, "in the bush!"
Perhaps industry analysts such as Gartner are correct in suggesting that financial institutions will turn to cloud computing for the processing of transactions (although in time there will be as many families of clouds as there will be ATMs), such a transition to a virtual world will have little impact on the requirements of real, physical ATMs. No changes of communications controllers will be needed this time — but the ATM family will grow larger.
Smart CFOs will always be looking forward but only up to a up to a point. It's hard to ignore our history and where we have come from. However, we will not be so much trying to replicate the mechanical models that inspired us forty years ago so much as we will be looking more keenly at matching capabilities to requirements — a practice we have engaged in for more decades than I care to count.
Perhaps the only future consideration for our beloved ATMs will continue to remain one of cost and simplicity and the ease with which they can be integrated into their surroundings. Only then will we turn around and take a longer look at what the future might hold!
Read more about ATM innovation.
About Richard Buckle
Richard Buckle is the founder and CEO of Pyalla Technologies, LLC. He has enjoyed a long association with the Information Technology (IT) industry as a user, vendor, and more recently, as an industry commentator, thought leader, columnist and blogger. Richard participates in the HPE VIP Community where he is part of their influencer team.
