The ATM: the future consumer banking touchpoint

Since its invention 50 years ago in the UK and in Sweden, the ATM has become a friendly robot cashier to millions of cardholders worldwide. With an installed global base of over 3.2 million ATMs and a new one arriving about every 3 minutes, it has changed the way money is distributed and managed forever; automating cash distribution and account access on a monumental scale across all seven continents, including Antarctica.

The ATM has always been at the forefront of automation, born to provide convenience. Now it stands on the threshold of reinvention. In the next few years, the ATM will undergo an extreme make-over, from its interface to its operational software.

The core concept of ATMs is shifting from simple vending to smart banking. In an era when a leading nation like the UK has lost half of its bank branches since 1989, and with the decline in bank branch numbers accelerating since the 2008 financial crisis, the ATM needs to evolve into a branch in a box, fulfilling most of the transactions which today can be carried out in a branch, including applying for a new bank card. ATMs, in short, are becoming smart consumer banking touchpoints.

There’s a vast array of account-related functions currently available at ATMs including balance inquiries, mini statements, statement requests, account transfers, PIN management, chequebook ordering, money remittances, funds transfers (both international and national), new account opening and the securing of loans and mortgages. The ATM is well on its way to becoming a bank in a box, complete with virtual tellers connected to the customer through video conferencing. CaixaBank ATMs in Spain, for example, now offer about 200 different transactions.

I don’t think the bank branch will ever be a dinosaur but in future, there will be far fewer branches, and those that remain will be mostly smart, retail-style places with video teller services, robot-advisers, self-service devices and a handful of customer services personnel doing the high-level selling. Metro Bank, for example, often uses the term “store” rather than a branch. David Smith, Business Development Manager of Auriga, a leader in branch transformation strategies based on software re-engineering, sees these retail bank branches as essential for maintaining a relationship of trust with customers.

In this evolving context, ATMs will continue to automate convenience, becoming ever more intelligent. That’s because they will be linked to APIs (Application Programme Interfaces) and Cloud architecture, which will greatly expand the services they can provide. In addition to these powerful levels of software, there will be payment hubs to enable different kinds of payments through the ATM. There will be account management hubs where a customer can carry out a range of transactions such as managing insurance policies, mortgages, funeral policies, loans, etc. The new generation of ATMs will even be able to use AI via the Cloud to secure systems against hacking and to provide the capacity for “Big Data” analysis.

ATMs will need to stay competitive in their transaction time, especially in light of faster payment initiatives by numerous national payment systems around the world. While the ATM knows how to deliver convenience, the ATM industry is currently gearing up for increased demand for quick, efficient and convenient services in its new global initiative of agreeing to an industry blueprint for its next generation of products. I can attest that a wide degree of consensus on this blueprint among major vendors, banks and independent operators has already been reached. We foresee an increasingly interoperable API ecosystem supporting an App based model for ATMs which connect to customers through mobile devices.

While the ATM is fast becoming a Consumer Banking Touchpoint, it still carries out the original goal of its co-inventor, John Shepherd-Barron, which was to issue cash around the clock outside of traditional bank opening hours. With a bright future ahead for the ATM, and cash in circulation growing at rates significantly higher than average GDP rates, cash is definitely isn’t going into the museum in this generation or the next.

by Michael Lee, CEO of ATMIA and Full Member of the Association of Professional Futurists (APF)