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The rise of the ATM — self-service banking’s main touch point

How could the dinosaur that is ATM technology possibly survive — much less thrive — in a country full of tech-obsessed millenials? Convenience.

June 17, 2014 by Rebecca Hellmann — Marketing and Sales Coordinator, Welch ATM

Recent studies have shown that millenials are completely OK with branchless banking, and an Accenture survey of nearly 4,000 retail bank customers in the U.S. and Canada found that 27 percent of consumers would consider a branchless, digital bank if they were to leave their current institution.

Considering that the digitally oriented millennial generation will dominate the U.S. landscape by 2020, many financial institutions should be shaking in their boots.

But this is great news for the ATM.

Did I lose you there? Are you wondering how the dinosaur that is ATM technology could possible survive — much less thrive — in a country full of tech-obsessed millenials?

Convenience.

The millenial obsession with technology is largely based on the idea of self-service as a convenience tool. The option to pay at the pump at gas stations equates to avoiding the trip into the convenience store and possible lines at the register. Starbuck’s payment application means saving precious time in line — simply wave the phone under the POS reader to pay.

The ability to bank online, or through a mobile device, means not having to plan a trip to the nearest bank or credit union branch during branch hours.

ATMs were one of the first convenience tools introduced by financial institutions to provide cash and account access outside of regular branch hours. Since their inception, ATMs in the U.S. have steadily grown in number — and the introduction of surcharge-free networks has served to make ATM use that much more appealing. Automated Teller Machines have become the always-open minibranch.

True, millenials will regularly opt to use a desktop PC, laptop, or mobile device to handle bill payments, account transfers, and a slew of other typical banking features. And they will be likely to seek out the most convenient way of getting cash without having to deal with long lines and real people. They will use the ATM.

Does this mean ATMs are immune to changes in technology? Absolutely not!

Just because ATMs are a default doesn’t mean that millenials will be happy about using them as long as they retain the same look, feel and experience they've provided for decades. Remember that key word “convenience”? How about the fact that half of millenials use their smartphone to bank?

It’s time for ATM providers to start ditching the card and integrating more thoroughly with the devices upon which future generations are coming to rely. ATMs might benefit from the branchless convenience trend now, but millenials will eventually abandon technologies that don’t conform to their time schedules and lifestyles.

To keep riding the tide of the branchless technology boom, it is time for the ATM industry to start thinking mobile and global — or risk becoming irrelevant.