Getting better all the time: It’s the ATM’s golden anniversary
Lyndon Johnson was in the White House. “Bonanza” and “The Andy Griffith Show” topped the TV ratings. The Rolling Stones, Beach Boys and Beatles ruled the record charts.
In fact, less than 30 days after The Beatles celebrated the release of “Sgt. Pepper’s Lonely Hearts Club Band,” another watershed moment was taking place just 12 miles due north of the Abbey Road recording studios. On June 27, Barclays Bank rolled out the first ATM at its Enfield Town branch.
Cutting edge then, the simple ATM has grown up to become the Swiss army knife of banking throughout the world. Can it really be a half-century since the automated teller machine was introduced?
One thing is for sure: The ATM has certainly evolved beyond its modest beginnings. Latest-generation ATMs now comprise the foundation for self-service banking—and thrive as part of omnichannel banking deployment for many of today’s tech-savvy banks and credit unions.
No longer a basic appliance with a singular mission to allow small cash withdrawals (with limited note selection), the ATM now serves as the banking experience epicenter for many customers. This always-on, 24/7 channel now anchors today’s self-service transactions, and it’s about much more simple cash withdrawals—or even rudimentary banking needs. Today’s transaction options include the following:
- the sale of mobile phone top-offs
- transit tickets and prepaid cards
- utility and credit card bill payments
- currency exchanges
- payroll withdrawals
- the setting and re-setting of card PINs, and
- the delivery of targeted marketing messages
Yet at the same time, cash remains an important payment method—and ATMs represent the preferred method to access money for many consumers. Cash is available from more than 400,000 ATMs strategically located at financial institutions or through independently-deployed ATM in the U.S. Worldwide the number of ATMs has surpassed the three million mark.
And as the times get more high-tech, so ATMs have grown more sophisticated. Today’s widespread use of intelligent ATMs that use image-deposit technology in banks and credit unions has spurred an increase in new features and functionality offered to customers and members. Besides offering envelope-free deposits, these ATMs typically offer easy-to-use touch screens, an ability to offer a wide variety of deposit and withdrawal options and in some cases, beacons and other proximity locators.
This intelligence can even extend beyond the ATM itself. More financial institutions are embracing self-diagnostics systems to assess the condition of their hardware, software and network systems. These solutions—which include condition monitoring and application performance management variants—alert financial institutions about potential failures. By being proactive, FIs can schedule preventive or corrective maintenance before a malfunction occurs and thus reduce or eliminate downtime.
Meanwhile, ATM ubiquity remains important to many consumers and businesses. A 2014 study from the Federal Reserve Bank of San Francisco noted that consumers choose cash for about half of all transactions valued at less than $50, and cash remains the payment method-of-choice in many spending categories. A mobile phone may help you access that kind of money. But as digital devices go, an ATM will always stand alone in putting paper currency directly in your hand.
That said, a valuable convergence of ATMs and mobile devices is taking place today. This includes cardless, card-free, and mobile cash withdrawal variants (depending on vendors’ choice of terms) that can include QR code or PIN authentication. Other features are on the horizon or just beginning to appear, such as acceptance of EMV cards; communications with near field communications (NFC) devices; access of person-to-person (P2P) transfers; enhanced bill pay options; and other features that had previously only been available at the teller booth.
The ATM at the half-century mark has certainly aged well. Besides becoming the foundation for self-service banking, it also serves a vital tool for today’s connected banking customer. It is also critically important to the success of many banks’ and credit unions’ omnichannel banking efforts. To say it’s changed banking—and stands as the equivalent of a breakthrough album and pop culture milestone rolled into one—is putting it mildly. Indeed, it’s getting better all the time.
Ed O’Brien is EVP, research and strategy, for ath Power Consulting, a premier provider of research and customer experience solutions for the financial services industry. Ed can be reached at [email protected]
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