More than a cash dispenser: How banks are rethinking the ATM

Arguably no banking technology in the last 50 years has been as disruptive as the ATM machine, celebrating its birthday Tuesday. Banking may look different on the surface, but its core functions look the same. Growth of mobile banking usage is slowing, mobile payments haven't really taken off, and banks are re-investing in their branches as an important and evolving channel for their evolving customers. Like branches, ATMs are an important point of contact for banks and their customers that aren't getting phased out because some people are becoming more digital -- they're getting upgrades. Banks want sleeker machines with larger screens and the functionality to perform as an automated teller that does more than dispense cash and take deposits. “The activities you can do on ATMs and mobile are very similar for those who are super mobile users with super high expectations of how an ATM should behave,” said Jose Resendiz, general manager for global financial services at ATM producer NCR. “For those who are not, it’s the perfect training ground for a financial institution to get their customers comfortable with how they're interacting and engaging.” According to PwC, customers are leapfrogging banks’ omnichannel banking strategies and seeing more all-digital users. However, banks are still re-investing in their human interaction channels. TD Bank just employed voice recognition technology for its call centers to help emulate the retail experience in that channel and banks across the U.S. are upgrading their branches. Wells Fargo, Bank of America and Chase are also upgrading their ATMs. “The ATM isn't going away any place yet, it is continuing to grow,” said Kevin Tynan, svp for marketing at Liberty Bank for Savings in Chicago. “The movement is for ATMs to become more convenient. Customers have higher expectations than they did 20 years ago when they just went to an ATM for cash. Now they're looking to do more transactions and they want it more secure.” This month Bank of America introduced “Extreme ATMs” or “XTMs." These 32-inch monitors act as marketing vehicles to display ads and targeted offers to customers, as well as video tutorials to teach people about online banking and to find time with a personal banker. It plans to roll out 100 this year and another 1,000 in the next couple of years. Bank of America is upgrading its whole ATM network with new technology and giving customers greater choice of transaction type, including check cashing, making credit card payments and choosing their preferred denominations when withdrawing cash. It was also the first to deploy cardless ATM capability last year. "We’re really committed to the integration of digital and physical channels to provide our clients with a seamless experience across all channels, including our financial center and ATM network, as well as our mobile and online banking platforms," said a spokeswoman for the bank. Wells Fargo began introducing cardless machines this spring. Last year Chase deployed 5,000 “eATMs” across the U.S. that give a similar tablet-like experience, also with cardless capability. This year, it's focused on migrating transactions that happen through teller to digital, Thasunda Duckett, JPMorgan Chase’s consumer banking CEO, said at the company’s Investor Day in February. Last year, more than 400 million transactions were completed through tellers, 70 percent of which could have been done through a digital channel -- online, mobile or ATM -- Duckett said. Resendiz put that number at 80 percent, and suggested video-assisted ATMs could be something that motivates customers to visit their branches. “The challenge -- and opportunity -- is to make that customer connection across the channels,” Resendiz said. “Cash will still be around quite a while, people will still be able to go to physical channels, but more and more, people continue to adopt digital payment methods and experiences.”