The Future of ATMs

Payments Leader

Posted on July 24, 2014


When Microsoft stopped providing support for Windows XP in April, countless financial institutions were forced to make widespread ATM upgrades and wholesale replacements. As they make the inevitable switch to Windows 7, most aren’t particularly happy with the expense. That said, for many, the upgrade has built a foundation for new ATM software that’s paving the way for Branch Transformation, thus creating a better, more appealing experience for consumers.

ATMs at the Center of Change

Although many initially viewed it as a forced investment, the Windows 7 update does offer substantial benefits. In fact, more and more financial institutions are now realizing the increased efficiency and convenience new technology upgrades generate for their customers.

Enhanced with new operating systems, ATMs are becoming more powerful and diverse, evolving from simple money dispensers into EBKs (electronic banking kiosks), which pair traditional ATM functions with a range of other capabilities. With EBK, customers can conduct virtually all their banking business without ever visiting a branch. This includes check cashing, receiving money in desired denominations and even interacting with tellers via video sessions.

This last feature has been especially valuable for banks, which are using the technology to cut down on overhead. JP Morgan Chase recently cut 8,000 mortgage and retail banking jobs after rolling out approximately 1,000 EBKs throughout the US.

PNC Bank has made similar strides in Chicago, as it adapts to changes in consumer habits by installing so-called “pop-up” branches at storefronts, intersection corners and other places where pedestrian traffic is common. These interactive ATMs allow people to cash checks, open accounts and more. They also provide a key physical presence at a lower cost, while offering greater flexibility and enhanced service.

More Options Promote Change

As more financial institutions take advantage of new ATM devices and technology, the teller footprint will continue to shrink. Faced with new options and conveniences, consumers have less reason to visit an actual branch, especially since they are able to conduct virtually all their transactions at an ATM, online or using a mobile device.

Right now, consumers can use EBKs for deposits, check cashing and to purchase or add funds to prepaid cards. Other features are also in the works as banks look to add biometric scanning and kiosks that utilize mobile phone apps to allow customers to withdraw money remotely, so they can pick it up quickly without having to wait.

New ATMs are cheaper than humans and at pace with consumers’ evolving demands for convenience and rapid service. While many people, particularly at smaller, community financial institutions, still value the personal touch of face-to-face banking, new ATMs also are a great way for smaller community banks and credit unions to keep pace with larger competitors, since they increase physical presence without opening new branches.

As an early adopter of EMV and Windows 7 technology, FIS is at the forefront of advancing payment solutions and technologies, and fully prepared to assist our clients with the most challenging aspects of Branch Transformation. While it may seem like an overwhelming prospect, these changes can have a dramatic impact on even the smallest financial institution, resulting in decreased costs, increased business and better sustainability in an ever-changing business landscape.

Do you believe that the changes to the ATM will really be adopted and bring people back to the banks?

Leave your thoughts in the comment section.

Leave a Reply

There are 2 comments for this article
  1. Radha at 7:35 am

    Hi Jay! Interesting article on the future of ATMs. This article focuses mainly on the ATMs in the developed countries where ATM functionalities will expand to take on branch roles and we will see many ‘pop-up’ branches in the near future. This is the best way in which banks can optimise on the additional outlay on the Windows XP to Windows 7 migration requirement. Some forward looking banks in the developing countries too have started taking baby steps towards this though they are currently challenged by infrastructural, labour and regulatory issues. For these banks, ATMs have become a very potent tool in reaching out to the poor as part of their financial inclusion initiative.But ‘low cost’ being the operative phrase for these banks and their managed service providers, they tend to focus on the primary function of the ATM i.e. to dispense cash. Most of the ATMs in these countries being relatively new, the Windows 7 migration requirement has been hard on their operating costs. FIS is an ATM managed service provider in India managing around 8000 ATMs across 26 banks.

  2. VAL at 2:12 pm

    There is no doubt that the increase in technology is
    continuing to grow and as such, people from all walks of life are embracing and
    learning the various mechanisms as long as it is more economical and convenient
    for them. In regards to the question of whether the changes to ATMs will be
    adopted, I believe it all depends on how user friendly the service will be.
    First, we have to think about the corporate customers and how quickly they
    desire to have results. They want to be able to retrieve information in a jiff
    and be able to understand the different faucets surrounding the new systems in
    place and how it fits well with their business needs. Second, we have to think about
    the retail customers who will more than likely embrace the change, however,
    with the stipulation that the interface will be “user friendly”, and as long as
    the service is very much reliable and convenient. With these elements, I
    believe that the changes to the ATM system will be adopted. On another note,
    the new technology in the long run will decrease overhead expense cost for
    banking institutions, hence, if consumers can also feel the effects of reduced
    cost in banking with a user friendly service which is safe and secure, then
    they will be more inclined to embrace and utilize these changes. The flip side
    to that is that some customers will perhaps like to continue having some kind
    of personal interaction with someone assisting them with their banking needs,
    perhaps outside of normal banking business hours. Now the questions is this, “In
    the future, will we continue to see these changes and improvement occurring
    with ATMs and banking, with the possibility of having individuals interacting
    with a representative of a bank for example, while carrying out their
    transactions at the ATM 24 hours a day, 7 days a week?” There is no doubt that
    changes and development will occur, however, it all boils down to great
    customer service! Providing innovative, user-friendly and convenient service
    will definitely drive customer loyalty, and encourage them to embrace these
    changes. Does this mean increased business for financial service providers? I
    believe this will absolutely increase business for financial service providers.

Payments Leader

Payments Leader from FIS Global provides insights on credit, loyalty, fraud and emerging payments strategies through blog posts from our industry experienced authors.