Modern digital banking is part of a banking strategy.
In recent years, ATMs have changed a lot. As a result, they now sit at the intersection of digital and physical worlds and can function as 'the branch'. ATM technology is now similar to a smartphone, app-based, open-sourced, and programmable, enabling developers to write programs for ATMs.
Modern ATMs can track consumer data, such as mobile phone data, as well as conduct cash-based transactions, like a teller, at the same time.
In a world where consumers are using mobile wallets and contactless cards to “pre-stage” or initiate ATM transactions (commonly known as “cardless ATMs”), the ATM experience is becoming less seamless than it was in the past.
The ATM experience was initially much like this one, when consumers had to locate a machine that accepted a certain debit card or network. This is one of the objectives to ensure that the ATM experience is seamless.
However, a major benefit is that because the program is app-based, it will make it easier to add a wide range of banking services to ATMs, such as currency conversion, gift card purchases, and cryptocurrency, without requiring software upgrades.
ATM will evolve into a self-service machine that
provides all of the financial services and payments the consumer requires.
However, banks are reopening branches to in-person traffic slowly and carefully, branch limitations of one sort or another may persist. More advanced ATMs, once they are more widely deployed, may compensate for the limitations.
ATM's of the future will help bridge the gap left by the closure of many full-service bank branches, by checking ID's for loan applications, providing customer service video chats, and more. ATM manufacturers already have advanced models that can be equipped with fingerprint scanners and NFC readers. Moreover, which are becoming increasingly common in financial institutions ordering new machines, are automated (envelope-free) deposits of cash and checks and cash recycling.
Cardless ATMs are becoming more popular.
According to PaySpace Magazine, 78% of consumers prefer to use a cardless ATM solution than carry a physical card. Pre-COVID-19, the most popular motivation for preferring a cardless ATM was convenience. The coronavirus may have further stimulated interest in cardless ATMs as a consequence of safety concerns.
According to PaySpace, institutions use different types of cardless ATM technology, which Embry referred to as seamless acceptance. Some institutions use QR-code scanners, while others require a verification code sent by SMS, and the most sophisticated ones can authenticate users based on facial features or palm scans, among others. Mobile wallets can be used when an ATM is NFC-enabled.
According to ComputerWeekly, CaixaBank has used facial recognition technology on about 20 ATMs since early 2019. The biometric authentication capability allows consumers to withdraw cash without a PIN, The bank said in June that it would add another 100 machines equipped with facial recognition technology,
With some cardless ATM applications, one-time codes can be sent to another person’s mobile phone allowing them to withdraw a certain amount of cash from the sender’s account.
It's important to keep in mind that banks that offer cardless ATM services must regularly caution customers about fraud. Phishing scams are already taking advantage of these new technologies.
Despite the fact that ATMs have re-established their place in the world, consumers and banks view them in different ways. In the past, changes would have otherwise taken five years to materialize; now, they happened in only a year. Consumers were forced to use remote banking at the start of the epidemic, but now they are much more digitally active and familiar with their mobile devices.
Banks, which had already closed branches before the pandemic, are taking advantage of the situation by deploying more ATMs in spots where branches are shuttered. In-lobby machines are also being added, although branch traffic has declined significantly.
No cards are required for capabilities and customization.
The most important and significant aspect of ATM enhancements, is the continuous integration of digital and physical capabilities. ATM manufacturers are including more functionality for cardless transactions and mobile interaction with the machines.
In 2018, cardless ATM use was predicted to be the “next big thing.” However, because of the epidemic, many people have switched to mobile payments, the dynamic has changed. Banks also trying to offer the personalized experience that consumers want through ATMs just as much as they do in their branches and other services.
They are taking a lesson from the growing popularity of kiosks in retail and dining establishments. The executive agrees that digital banking is also beneficial because it gives people the ability to customize their experience. People want to be in control, to have the ability to do what they want at any hour and any location, according to the executive.
An ATM’s personalization might go beyond a personal welcome and include customized fast cash options based on the individual’s ATM history. Having the ability to help the person reset their PIN, for example, might be useful.
Reduced-Cost Expansion and Efficiency.
Banks are reconsidering how and where they deploy ATMs in response to the growing demand for self-service banking. Because of the growing demand for self-service banking services, multiple ATMs are now often placed in the same location to provide redundancy in case of an outage. According to Diebold Nixdorf research, one of the greatest frustrations for consumers is ATM outages.
ATMs and some types of interactive teller machines (ITMs) are being used to expand their presence without the costs of a branch, in addition to regular ATMs. Using two-way video, ITMs provide a “bank in a box” concept with real-time human assistance. When used in conjunction with billboards and other marketing efforts, strategically placed ITMs can make a bank appear larger and more ubiquitous.
A financial institution can benefit from using a next-generation ATM.
Apps rule the world:
An app on a consumer's mobile phone may be used to operate a next-generation ATM, making the machine more like a tablet.
Integrate ATMs into the mobile-digital world and ATM vendors can distribute downloadable software, and issuers will have a development kit for their mobile app to authenticate. This kind of capability will allow the ATM industry to update machines more quickly and at a lower cost. Interacting with the ATM through mobile phone rather than a screen on the machine. There are other new features in progress and will be introduce in the near future.
ATMs are already capable of performing cryptocurrency transactions, and another new function will allow consumers to obtain an emergency cash advance from their credit card company and retrieve it from any ATM.
Any ATM that accepts cash may soon be able to accept cash deposits from any bank, thanks to a concept being developed by the consortium.
Banks might benefit from ATM transactions being processed by the machine, so denomination selection is also gaining traction. Consumers will go with the path of least resistance when making deposits and withdrawals at an ATM if the rules are more difficult than at the teller line, for example if the funds are not available.
Consumers continue to value denomination selection the highest when using an ATM, Powley says, and these business rules make the ATM more accessible for funds.
Cash usage worldwide will continue to fall.
Cheerleaders of cash note that the consistent 1% increase in global cash sales proves that cash remains king. Cashless advocates argue that cash usage is still on the decline, particularly among purchases under $100. While global inflation pressures create economic and political risks, people around the world continue to hoard currency as a hedge. This demand forces the creation of large denomination notes, which in turn requires the use of cash for remote debit and credit purchases.
It is difficult for governments and card brands to prevent payments via cash, but governments and card brands are actively discouraging the use of cash. As cash usage decreases, consumers will have the option of paying for their purchases via cash, although less consumers will choose to do so in 2022.
The global ATM sector is mature. Because there is an excess of worldwide capacity, manufacturers are wagering big on product enhancements and non-hardware futures including ATM as a Service, ATMs that are recycled, FI core replacement speedups, crypto ATMs, self-service checkout, hospitality automation, and gambling kiosks. In the last 24 months, we've witnessed a surge in acquisitions by NCR, Euronet, Brinks, and Cennox, as they gobble up their competitors.
Moreover, independent ATM deplorers continue to sell out as operating margins shrink and owners choose to retire as a result. Despite high debt burdens on ATM manufacturer balance sheets, M&A transactions are likely to increase in 2022 as a result of a lack of organic expansion opportunities.
ATMs will increase in number, and will become simpler.
Even though financial establishments continue to struggle with branch transformation, ATM spending will continue to be dominated by the "barbell effect." On one end, big banks are using increasingly sophisticated, six-figure ITM/ VTM ATM technology to transform their branches. These ATMs provide higher functionality and lower running costs at branch and off-branch locations. Many financial institutions would like to speed transactions up, make consumers happier, and reduce employee expenses.
On the other end, smaller banks are switching to cash-dispensing ATMs that are cheaper and more economical. These ATMs are supported for decades without software updates and are therefore untethered from regular Windows ATM upgrades.
The casualty will be mid-range ATMs that have check and cash deposit capabilities along with cash dispensing. Financial institutions are beginning to recognize that the costs associated with this traditional ATM approach often exceed the benefits.
The future of the ATM is up for change.
ATMs will be a lifeline to populations who are not comfortable with digital banking or who rely on cash.
Banks that choose to include multifunction technologies like two-way video, account opening, instant card issuance, and check book printing, among other things, may find that ATMs become relationship-building tools rather than strictly utilitarian, transactional tools.
24-hours-a-day service can someday be provided by an ATM become a Teller Machine, not just a source of cash. In addition to being a source of cash, self-service technology can redefine the retail banking experience.
Demand for ATMs and devices using the same hardware and software technologies will determine how many are deployed around the world, and we will see a replacement program for cash-and-dash machines being replaced with recycling and deposit equipment as well as 'assisted service devices' that meet consumer demands at a cost-effective level.
Destroying and razing is not the answer.
Legacy banks are experiencing a perfect storm; customers are switching away from traditional banking channels to digital-only solutions, leading to substantial losses.
Blowing up branches and pulling out ATMs from communities that are not prepared to see them leave has been a crude instrument used to reduce costs and increase efficiency. However, there is a danger in terms of lost customer loyalty and reputational harm. Self-service can help mitigate this.
Legacy banks and fintech seeking to disrupt the market may offer assisted, remote, and self-service to complement digital-only banking.
The banking sector must come up with more imaginative ways to use technology to enable community banking branches to function as a hub for financial services. Modern ATMs can be customized to provide additional services such as paying a bill or conducting a live video chat with a financial product specialist, resulting in extra revenues that can assist in subsidizing cash access.
Self-service provides benefits.
Every consumer has personal needs and receives distinctive benefits from their bank's channel choice. Customized customer journeys, informative and promotional messages, or context-based marketing messages are just a few examples of what consumers receive.
People who are dependent on cash will rely on self-service ATMs to keep their businesses open. Self-service ATMs will prevent economies from losing all banking services, preserving their retail centers. Banking can be done 24 hours a day through branch without contact.
Banks have for many years relied on technology to reduce their costs and increase efficiencies, so that they can distribute their products and services to their customers using the most appropriate and cost-effective channels. Customer-oriented technologies have provided the data and tools to manage relationships in the most profitable way.
Every innovation in retail banking delivery, however, has created physical distance between the bank and its customers. Banks are now more vulnerable than ever to competition, given the near-limitless choice available.
Banks, for the first time, are being constrained by technology. Their self-service infrastructure is typically reliant on decades-old technology, which is expensive to maintain and difficult to innovate with. That infrastructure needs to be modernized so that banks can realize the potential of these technologies.
Automating branch operations using hardware and software is vitally important to deliver a 24-7 banking experience anywhere there is demand.
When we discuss tech, we typically refer to AI. Banks could also benefit from AI in delivering personalized customer experiences (omnichannel marketing) and managing banking assets and cash more efficiently (think of predictive maintenance).
In future, banks will have to adapt to all of their customers' needs. Allowing clients to pick how they interact with the bank's services will just be the first step. A mobile-only experience might not be reliable, and it won't help a bank differentiate itself in a world of choices. Customer-centric doesn't mean forcing everyone to a mobile-only experience.
Banks should require comprehensive security and control using tools.
Banks must also guarantee security behind everything they do. It is an issue that is so important and so public, yet one that is often treated as a side issue.
Those who stick with a legacy infrastructure will find change, innovation, and adaptation too difficult, too risky, and too complex. In turn, they will be unable to keep pace and innovate, and they will consequently risk losing their customers and business.
Their customers will be deprived if branches are closed, and others will be turned off if they are not offered an alternative through emerging technologies.
If we do not keep pace, we will see a race to the bottom in financial services, and customers will flock to a range of app-based companies that offer comparable services.
Banks should consider Next Generation Branch because of the following reasons.
A Next generation branch is a facility that provides everything a traditional branch does, but it can be located anywhere. It is fully automated but provides a safe environment for both digital and personal interactions with a bank.
It can be used for a variety of purposes and can be customized to suit the community it serves. Because of this, the business case for a branchless bank will be very different from a legacy branch and will have a different footprint.
It will provide lower costs and increased revenues while providing a platform for promoting complementary third-party products and services. It will let communities and individuals know that they are cared for.
The future of the ATM is really exciting.
There might be a need to find a new name for the ATM, because people seem to be so reluctant to see it as anything other than a cash machine.
Banks will redefine the spaces we use to engage with them and the hours they are open for business by combining self- and assisted-service technology, delivered securely to industry standards.
Banks will be able to deploy fully automated branches where bank staff can provide high-value services, thanks to the same technology that powers our ATMs today. However, the infrastructure will be modernized in order to maximize its potential.
Reference:
2.
https://www.cebih.org/the-future-of-atms-in-banking/
3.
https://www.atmmarketplace.com/blogs/what-can-atms-learn-from-kiosks/
4.
https://blog.burroughs.com/solving-quick-serve-dilemmas-with-the-self-ordering-kiosk
https://www.intel.com/content/www/us/en/financial-services-it/cloud/smart-atms.html
Disclaimer:
This article is purely my personal thoughts on the subject area and my interest based on the references that I came across with. It is my personal view and my blogging journey that I wish to share if the information makes sense and a reference. This article has no relation with my previous and current employer. Thank you for reading.
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