Imagine a machine that makes your dinner reservations, invites your friends to join you at the restaurant and hands you the cash to cover the check. We’re talking about the ATM of the near future.
And that’s just one new application in store for what consumers generally view as trusty “cash stations.”
The future of the ATM looks bright, according to a 2011 Global Industry Analysts Inc. report that estimates banks and retailers will opearate 3.9 million of the machines worldwide by 2017, or roughly 1.6 million more than now.
Along with that growth will come “advanced ATMs with superior capabilities,” the report notes. Which gives rise to some questions: What is a superior capability? What will ATMs look like in 2017? What will they offer that today’s machines don’t?
Financial institutions and retailers often view ATMs as differentiators because of the services they can offer. But equally important are the marketing messages they can deliver to customers, David Albertazzi, a senior analyst and ATM expert with Boston-based Aite Group, tells ISO&Agent Weekly.
ATM executives have spent much of the past couple of years focusing on getting machines from different banks to work together because of consolidation and mergers, Albertazzi suggests. Soon, ATM companies will focus on placing machines that can deliver personal messages to customers regarding their accounts to help retain their business. They also are looking to add an array of other services, he says.
ATMs will remain at the forefront of a 24/7 banking concept, and cash withdrawals and deposits will remain their core function, manufacturers and observers suggest.
Indeed, the machines will remain the “21st century automated tellers” by sticking to the main purpose of automated cash-dispensing, but they need to “look and feel contemporary” while offering other payment methods, Mike Lee, CEO of the ATM Industry Association, tells ISO&Agent Weekly.
“Our best insurance for the future in the ATM industry is for the machine to become a payments terminal as well, and not just for (getting) cash,” Lee contends.
Cell-phone access to an ATM represents a service not widely available just two years ago, Lee says. But today, manufacturers often discuss combining the technology behind cell phones and ATMs to create new consumer services, he notes.
First National Bank of Johannesburg, South Africa, last March launched a service that enables customers who forget to bring a wallet or purse to the bank to make ATM withdrawals with their cell phones.
Future ATM developments may include cash withdrawals, deposits and funds transfers, balance inquiries, bill payments, ticketing, cell-phone airtime and prepaid card top-ups, biometric identification, and software-application downloads, Lee says.
As mobile phones become more prevalent in making payments, ATM manufacturers can expect customers to want their phones to play a larger role in granting access to their accounts as part of the ATM experience, Jerry Verdi, vice president of market intelligence for North Canton, Ohio-based ATM maker Diebold Corp., tells ISO&Agent Weekly.
“As we look to the future, we will see a growing connection between the mobile device and banking channels such as the ATM to ultimately enable convenience for the consumer,” Verdi says.
Ultimately, consumers will view technology such as 4G connectivity as a valuable ATM feature for speedier access to services, Verdi contends. Diebold recently revealed that possiblity at the International Consumer Electronics Show in Las Vegas.
Consumers will expect the ATM to alert them about account problems or cost-saving or interest-earning options, and to offer a variety of payment options and acceptance of multiple cards, Verdi says.
Duluth, Ga.-based NCR Corp. says ATMs may become interactive teller stations. NCR offers such a feature, enabling customers to speak to a live teller using video-conference technology, Bob Tramontano, NCR vice president of marketing, tells ISO&Agent Weekly.
In addition, NCR has created “concept ATMs” that combine the machines with Internet tools and social-media applications so consumer can make dinner reservations and invite friends via Facebook at the same time they are obtaining cash for the night out, Tramontano says.
As long as consumers have a need to convert one payment value–cash, checks or cards–into another, the ATM will remain a useful self-service channel, Tramontano suggests. But the services must remain relevant because “customer loyalty can change at the push of a button,” he adds.
Some observers have suggested the proliferation of mobile payments and “virtual” money someday could eliminate the need for cash, thus leaving ATM relevancy in question. In fact, Albertazzi contends that future trends will focus on “making money movement easier by using a smart phone rather than taking cash out of an ATM.”
But Tramontano sees cash as remaining a vital, and growing, payment option well into the future, meaning the ATM’s core business is not endangered.
“Cash in circulation continues to rise, so I would dispute the points being made about less cash in the future,” Tramontano says. Plus, the ATM will help facilitate emerging payment forms, giving it a vital role regardless of which payment method consumers choose, he contends.
The ATM Industry Association estimates the U.S. has an installed base of 401,500 ATMs. Worldwide ATM installation hovers around 2.3 million, led by the Asia/Pacific market, the association states.
In fact, Global Industry Analysts predicts Asia will continue to have 32% or more of all ATMs installed worldwide over the next several years.
Regardless of where ATMs are located, banks continually will seek ways to enhance their machines to support customer service and as a means for using cash.
But making decisions about the future of the ATM represents a double-edged sword.
“In order to remain competitive and both attract new customers and retain existing ones, banks face a dual challenge at the ATM,” Tramontano says. “They need to control costs and offer an increasing number of products and services [through the ATM].”
Meantime, getting cash and arranging dinner at a bank ATM sounds very much like customer service at an ATM of the future.
