Banks at a crossroads: The future of ATMs
by Philippe Préval, CEO, Lusis Payments
Although cash delivery activity seems to be decreasing due to contactless payments and wallets, in North America, the automated teller machine channel is still maintaining its central role as a core banking touchpoint with the consumer.
The ATM channel has become an integral part of the banking omni-channel experience, not only playing a key role in the broad context of modern banking but also being a major enabler of mission-critical "access to funds" functionality within financial inclusion initiatives. The channel is taking an even more important role as branch network optimization leads to a reduction in the number of branches while consumers still express a preference for banks with a physical presence.
On the other side of the ocean, some European major companies seem to see the ATM business as a dying activity that can be easily outsourced to service providers that provide a low cost/poor user experience.
So, who is on the right path between these two radically different approaches? New features that are coming in front-line for ATMs may be giving evidence of a really interesting future for those teller machines putting the truth on the United States' side.
Financial institution initiatives
There are interesting initiatives related to activation of classical cash functions using contactless devices, including Smartphones. New functions for providing cash to one individual using his or her Smartphone are already very popular in the U.S. and totally marginal in Europe.
There are two ways of delivering cash to someone:
1) Using a smartphone-based radio-frequency identification capacity and wallet to allow a customer to retrieve cash from an ATM, there is a wallet device primary account number used in place of a card. The DPAN is also known as the digital primary account number. Once the wallet is authenticated, even the on-us transactions are available for the user. On-us transactions are those for which all transactions for an ATM or a point-of-sale device originate from the same bank. The only condition is to re-authenticate the wallet every time the user chooses a function.
2) Cash can be sent to a third-party holder using wallets. An ATM is then used to dispense cash to the destination user.
ATM vendor initiatives
Following is a brief discussion of two interesting initiatives proposed by the two market leaders.
NCR Corp. ITM
The NCR Corp. Interactive Teller Machine is an assisted service hardware solution. It has the same footprint as an NCR Self Service ATM system but has integrated two-way video conferencing with additional software and hardware to support live interaction with a remote teller.
The NCR ITM includes audio capabilities beyond a typical ATM, as well as incorporates peripherals to support the member experience like a phone handset for privacy or a signature pad to require customers to sign for certain activities. The ITM can be supported as a stand-alone video teller solution.
Diebold Nixdorf ILT
The Diebold Nixdorf In-lobby Teller is offering branch services without a real branch and tellers or inside a branch but with fewer teller agents. It is an innovative solution that redefines the branch experience for both the bank and its customers. The ILT bridges the gap between the teller and the ATM by combining the convenience and accuracy of a machine with the natural and personal interaction of a human.
All operations that a customer can do in a branch are available, including deposit, withdrawal and all home banking functions.
A dramatic productivity increase is anticipated with ILT, with one teller being able to pilot the dialogue of several ILTs in various locations.
Philippe Préval is CEO of Lusis Payments