At a time when customers are growing comfortable depositing checks on their smartphones, it may come as a surprise that the ATM is a key area of innovation for banks. Rather than being earmarked for retirement, major banks are rolling out a new generation of hi-tech ATMs—some resembling iPads, others equipped to deliver Skype-like videoconferencing. The business case for banks automating traditional teller tasks is clear: the per-customer cost of transacting at an ATM is less than half that of using a human teller. And banks bet that moving high-volume, low-value transactions into self-service channels will free their branch staff to engage customers in higher-value advisory and sales conversations.
In this context, we see the ATM becoming more critical—not less—for banks’ business strategies. Firms hoping to move more complex tasks to self-service will require ATMs with greater functionality to handle more complicated demands. And the banks able to deliver an ATM experience as user-friendly as an Apple product have the potential to drive greater customer adoption, reduce costs, and transform the scope of in-branch activities. This is why banks are unveiling new machines that are not only more aesthetically appealing and intuitive than their blocky relatives, but also drastically expand the functional customer experience.
Here’s a global snapshot of recent developments at banks that are already grasping the potential of the ATM of the future:
- BBVA in Spain was one of the first major banks to re-imagine ATM design and functionality with large, colorful, interactive touchscreens similar to an iPad (pictured above).
- Chase and Bank of America’s new self-service stations can cash checks and dispense money in multiple denominations.
- “Citibank Express” terminals in Singapore are equipped with biometric sensors and can transfer a customer’s transaction from a mobile device to the ATM screen for completion.
This new approach has its detractors. Many worry that the loss of human touch could have lasting business and customer experience implications. Coastal Credit Union, a leader among credit unions embracing next-gen ATM technology, offers one potential solution. The North Carolina-based financial institution gained industry attention by transitioning its entire teller staff to Personal Teller Machines (PTMs), which resemble traditional ATMs but use a built-in camera and video screen to connect customers with centralized support. Today, Coastal’s tellers work out of the credit union’s headquarters and videoconference remotely with customers through their PTM network. The conversion allowed them to reduce branch and staff costs while actually expanding the service hours and expertise available to customers.
Ultimately, the transformation of the ATM is driven by what banks want to do in their branches—as more complex activities move to self-service, branch roles will evolve away from handling transactions. One result may be a move to a more retail-like environment, where customers not only bank but can also shop for other products and services. Like iPhones.
This model has already emerged in South Africa, where FNB’s new retail-focused “dotFNB” branches sell iPhones and other Apple products alongside traditional banking activities. In fact, FNB is now a leading smartphone retailer in South Africa, just one of many unlikely changes to banks’ business models as they continue to roll out the ATMs of the future.