An ATM packed with high-tech functions may seem like a science-fiction dream come true, but business realities may keep many of the fanciest features on the drawing board for years to come.
Such gizmos as face recognition, touchless operation and holographic displays simply will not pay off, observers say.
Consumers appear unlikely to shell out enough in added fees to justify the cost of offering those whiz-bang innovations, many observers contend. Even if the gadgetry comes at no charge, it probably will not make the public switch from their regular ATMs to using a competitor’s high-tech machine, they say.
Instead, the next wave of innovation from manufacturers will take the more mundane form of technology that lower costs, makes the machines more convenient to use and provides additional services deployers can sell, industry experts generally agree.
“Adding technology to an ATM is really like any other business decision,” says Jim Block, director of advanced technology at North Canton, Ohio-based ATM maker Diebold Inc. “You have to look at what it will cost you and what kind of payback you can expect.”
Reducing operating costs is one of the “overarching” motivators driving innovation in machines right now, Block says. And “smart ATMs” that have operational intelligence built into them can help achieve that goal.
For example, some ATMs now “sense” when they need service or are not operating at peak efficiency. Such machines could communicate directly with the service department and request service if, say, one of the drive wheels is not as efficient as it should be or if something is operating outside a fixed tolerance.
Other near-term ATM upgrades may result from proliferation of technology that already exists, says Bryan Bauer, president of Kahuna ATM Solutions in Bloomington, Ill.
That could include such functions as on-screen opt ins and opt outs, bill payment, and prepaid card account preloads, Bauer says. Those functions appear likely to edge out science fiction-inspired offerings because, functions have to prove themselves before ATM makers add them, he says.
First, the technology upgrade should make good business sense. It either must promise new, reliable revenues, or drive down the costs of maintaining and operating the machines, Bauer says.
“The problem with most ancillary pieces is that they don’t provide enough revenue to make up for many of the logistics they require,” Bauer says. “Things like cash delivery and picking up checks can get exceedingly expensive, and so many new technologies will likely address driving those costs down.”
ATM operators find cash replenishment and deposit collections cost a lot, and they would welcome any function that reduces such a labor-intensive expense, Bauer says.
Security improvements represent the next highest priority driving innovation, according to Block.
Some may view biometrics, such as using an algorithm derived from a fingerprint, as worthy means to improve ATM security, and such companies as Diebold and NCR Corp. are exploring measures that do not come with the stigma of being “fingerprinted.”
One such option Diebold is developing uses a third channel, such as a mobile phone, to verify the identification of a person withdrawing cash. That “closed-loop” step could help keep crooks from using fraudulent cards created with magnetic stripe card skimmers, Block says.
Display technology also seems ripe for evolution. The most high-tech technology that ATM makers are starting to demonstrate involves 3D holographic displays, including the one Sao Paulo, Brazil-based ATM maker Itutec SA demonstrated earlier this year at the Ciab Febraban 2011 trade show (
But holographic images at ATMs appear unlikely to become widespread in the United States anytime soon, largely because of their high price tag.
“When it comes to holographic displays, well, that is very unlikely–as in, it’s not going to happen”–because no business case exists to include that kind of display on an ATM, says Paul Race, vice president of marketing and communications at Duluth, Ga.-based NCR.
“When we are thinking deployment, we are thinking ‘what should we do, not just what could we do,’” Race says. “Just because we can doesn’t mean we should.”
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