What do you think of the new ATMs?
Ready or not, here they come. Next-generation ATMs already are on their way to the public, and early signs show they’re meeting consumers’ needs. So what can you expect from this new wave of cash machines?
Next gen ATMs are expanding services rapidly
Manufacturers like Diebold and NCR began creating these ATMs which use video tellers to perform numerous transactions yet still offer a personal touch, to enable banks and credit unions to interact with their customers more cost efficiently.
The good news is that responses seem positive. For example, members’ reactions to NCR’s interactive teller machine at the State Employees Credit Union in Maryland have been stellar. The video ATM allows the credit union to offer expanded teller hours – a greater convenience to members – at a lower cost.
As these new ATMs roll out, the number of specialized services that customers can access is rapidly expanding – from simple cash dispensing to providing cardless cash options that pre-stage transactions and eliminate skimming – and beyond. Additional services include check cashing (down to the cent), bill payment, account transfers, money orders, check orders, prepaid reloads, new account and loan initiations, and acceptance of stacks of bills and checks.
Two major use cases
I believe that next-generation ATMs will gain the most traction within two types of facilities:
- high-traffic retailers like grocery stores
- high-traffic branches where long lines put pressure on tellers
Placing these ATMs in grocery stores, for example, could bring major benefits to both financial institutions and their customers. From the institution’s perspective, the ATMs create brand presence, where people regularly shop, without the high overhead of a mini-branch. Both rent and payroll are lower – and, assuming the video teller expense is spread across multiple locations, there is less downtime for the teller. In addition, there’s great convenience for consumers to access their money in the same place where they spend a large percentage of their money.
Next-generation ATMs also can pay off in high-volume bank branches, as I personally witnessed at a Chase branch in Milwaukee. With bankers on hand to help customers master the new machines, the eATMs were seeing strong use. Chase actually reports that its eATMs can perform 60 percent of teller functions, with the expectation that that number will rise to 90 percent as more functions are added. The bank benefits because the ATM relieves pressure on the teller line, but still allows for a handoff to an in-person banker, if required. Meanwhile, consumers save time because they don’t have to wait in long lines for a teller, and the eATM can perform many transactions faster than a teller.
In the future, I see potential for digital banks that want to establish some kind of face-to-face interaction with customers without investing in brick-and-mortar locations.
Biometric authentication – facial recognition, very likely – should be expected soon. This will greatly improve authentication and eliminate the need to carry a card to access this new breed of ATM.
These next generation ATMs are exciting, but make sure you’re:
- Articulating your future branch strategy to determine the appropriate use cases for implementation. Ask yourself what this will replace: Grocery store branches? Low-performing freestanding branches? Tellers at high-volume branches?
- Assessing the viability of your business case. These machines are much more expensive than a traditional ATM – $50,000-60,000, according to a vice president at NCR. In addition, NCR estimates that it costs financial institutions around $2 for an interactive teller transaction versus $1.25 for a traditional ATM transaction. That represents a much more expensive transaction, although still only half of the estimated $4 per traditional teller transaction.
- Creating a plan to educate customers on how to use the new ATMs. Consider piloting the machine in a current branch to gauge how much assistance your customers will require to climb the learning curve and feel comfortable using this new technology.