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.

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Payments Leader

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