The Dramatic Evolution of the Humble ATM

December 19, 2019 – Since the ATM first appeared in 1967, it has undergone a dramatic evolution which continues to this day. Once, just a simple cash dispenser available in major cities, ATMs now provide a wide range of services with millions of installations around the world, even in regions as remote and sparsely populated as the Himalayas. Over the years as the ATM has grown and developed, it has earned a place at the heart of modern banking and today provides financial institutions (FIs) with a vital touchpoint for customers and members, be they at home or abroad.

Let’s take a look at the ATM’s remarkable journey.

ATMs have evolved steadily over the last 50 plus years as hardware and software technology has advanced. Today, they provide many complex services, including cash and cheque deposits and cardless transactions. However, ATMs are now much more than a convenient provider of financial transactions services to people on the go; they have gradually become a valuable platform upon which FIs can build major operational efficiencies as well as customer loyalty.

In recent years, as FIs have begun to embrace the digital transformation of their organization and its offerings, ATMs have become a catalyst for their digital strategy in terms of customer engagement. Customer engagement has become a key focus for FIs in our digital and increasingly mobile world. As more and more transactions can be made remotely via mobile devices, FIs are rethinking not only what offerings they provide but how and where to provide them in terms of costs and efficiency.

For example, many banks and credit unions are transforming branches to be more welcoming and conducive to high-value transactions such as mortgages and investments where face-to-face interaction has the greatest influence. ATMs play a key role in this effort as FIs carefully differentiate the routine, day-to-day banking experience — which is becoming increasingly technology intensive, automated and self-service oriented (ideally served by ATMs) — with personalized, human interaction where a face-to-face, consultative approach is most effective.

Let’s take a look at today’s ATM and what we will see in the future.

“Contactless ” ATMs – Just as many retailers provide contactless payment terminals, increasingly, ATMs are offering this because there are a number of advantages to tapping vs. inserting your card. First, contactless transactions are faster and can reduce wait times for ATM access which is particularly beneficial in high foot-traffic areas such as concert halls and sports arenas. Second, you have the option of either using your card or your mobile device to conduct transactions, providing choice and augmenting the customer experience. Finally, contactless transactions are more secure as the card never leaves your hand which makes it harder for fraudsters to capture your PIN and other information they need to create counterfeit cards.

ATMs as Marketing Tools – ATMs provide FIs with frequent and direct access to individual customers/members and a unique opportunity to deliver information about services beyond their current transaction. Compelling on-screen messages provide customized offerings such as mortgages and GIC rates and create a highly personalized, persuasive experience, without the sense of a hard sell. Today, whole campaigns can be created and delivered via ATMs.

Remote Teller Machine – Another emerging development is for FIs to group tellers off-site and make them accessible via video at Remote Teller Machines. This type of video banking may seem futuristic, but Remote Teller Machines have already been launched by many major Canadian banks and credit unions. Remote Teller Machines can perform 95 per cent of the activities performed at a branch which not only enhances the customer experience, but enables FIs to extend their reach into locations where establishing a full-on branch is not economical.

Security and ATMs – With more complex ATM capabilities comes the need for more complex software and security to withstand the relentless onslaught of fraudsters and hackers —- and even physical attacks on ATMs. This is one of the objectives for the Industry’s migration to Microsoft Windows 10 Operating System. However, this does not have to be burdensome for FIs. Everlink offers services such as monitoring and remote diagnostics to ensure high ATM availability as well as measures to prevent the installation of unauthorized software. Everlink also offers a full turnkey, outsource option via our ATM Express™ platform. By outsourcing ATM software and security management FIs can eliminate the costs of dedicated IT staff, meet PCI and regulatory compliance requirements, and significantly reduce the occurrence and costs of fraud.

With all these advancements being made in the ATM industry and the popularity of mobile banking, it’s important to note that research indicates the most common way to interact with a bank or credit union remains via the branch. In fact, according to new research from Mintel, 86% of Canadian bank consumers have visited a branch in the past year, with 25% saying they visit their local branch more than once a month on average. Branch banking and the ATM remain core to the overall customer experience, even if their roles are changing. Undoubtedly, as ATM technology continues to advance, they will remain important to the banking industry. In fact, technological advancements are expected to grow the global installed base of ATMs to a staggering 4.3+ million by 2024.

Everlink certifies and supports approximately 3,000 ATM units among 300 clients across Canada. To learn how we can help you create, implement or enhance your ATM strategy please visit https://www.everlink.caline-of-business/atm-managed-services-3/