Re-inventing the ATM, Globally

Since its introduction in the 1960s, the ATM has evolved to become an integral part of day-to-day life. Suffice to say, the ATM has grown from a simple cash dispenser into its namesake of a fully-functional automated teller. In many countries worldwide an ATM can essentially cover almost all of the banking services offered in branch, from making transfers to applying for loans. However, in other regions, the potential ATMs offer financial institutions (FIs) is often one of the most underutilized and overlooked. 

For example, while FIs in many countries across the globe have adapted and evolved their ATM strategies to suit changing digital requirements and even overcome geographic obstacles, U.S. banks have only just begun to dip their big toe into the ATM re-invention revolution. Below is a list of five successful global uses of the humble ATM that U.S. banks could consider:

Cardless ATM operations. Recently generating some press in the U.S., cardless ATM operations have been available in countries such as the UK, Australia, Egypt and Azerbaijan for a number of years. These range from emergency cash initiatives to real-time funds transfers. The concept is essentially the same: using a code sent to a mobile device as an identifier at an ATM to receive money should you find yourself cardless, whether from your own account or from an acquaintance. Increasing the scope to include money transfers to non-bank customers opens the door to the unbanked/underbanked populations, a feature that has been especially popular in many countries across Africa, where there are more mobile phones than bank accounts.

Customer notifications. The payments industry today revolves around the concept of customer-centricity. However, due to geographical necessity and often for security reasons, FIs in Eastern Europe and the Middle East have been utilizing the ATM as a customer service channel for some time. Typical customer notifications include reminders that bank cards are available to be picked up in-branch, which is especially useful in countries where the post is unreliable and collection is the more secure method of obtaining a new bank card.

Customer notifications can also include more detailed screen messages. For example, if an ATM screen states the message “This action cannot be performed,” FIs offer explanations as to whether the issue is at their side or simply down to a lack of available funds. This is to give the customer peace of mind especially should the issue be on the bank’s side. Another great example of notifications used to improve customer experience comes from PrivatBank in Ukraine; if an ATM is out-of-service, the screen offers directions to the nearest working ATM.

Customer acquisition. In Europe, FIs have been known to actively recruit new customers from their competitors at the ATM. When a card from a competing FI is entered, the ATM runs a separate scenario should the customer fit a certain profile. This scenario can offer anything from a prepaid card with money preloaded onto it or the opportunity to be entered into a prize draw should the person in question provide their phone number and agree to be contacted directly by the bank. FIs also use the ATM to demonstrate the breadth of services they have available, some of which are also available to non-customers, such as issuing virtual prepaid cards that can be loaded with cash for the purpose of secure Internet shopping. 

Express loans. A number of banks in Russia, such as Leto Bank, offer this functionality, which is a service provided to cardholders, and in some instances, non-cardholders that qualify. Everything from the loan application to receipt of the cash is carried out at the ATM, negating the need for a cashier. Non-cardholder loans may require up to an hour for a decision, whereby they receive an SMS with the bank’s decision and then have up to a week to collect the funds at any self-service terminal of that particular bank.

Partner initiatives. In situations where it can be considered lucrative for all parties involved, FIs can partner with other large institutions to fill a business need. A great example of this are partnerships with universities, whereby ATMs on campus run scenarios tailored for students and staff, essentially blurring the lines of functionality between simple cash dispensers and informational kiosks. Utilizing their student and faculty cards, students and staff can receive scholarships and salaries and use ATMs to transfer funds to pay for tuition, utility and mobile phone bills. In some cases, such as one pioneered by Moscow Industrial Bank, an additional menu can be configured to offer a more personalized approach, whereby students can view their class schedule or information about outstanding library fees or accommodation fees; they can even receive personal messages from the university administration.

Innovations at the ATM don’t stop there; there are plenty of global examples of where the ATM has been used beyond its standard functionality. From dispensing precious metals in the Middle East to making charitable donations in South America; buying tickets to concerts and sporting events in Europe to floating ATM islands in Indonesia; the possibilities for extending the shelf life of this self-service device are infinite.

Recent research by Retail Banking Research (RBR) found that the installed base of ATMs across the world is forecast to grow by 44% between 2012 and 2018, taking the number of ATMs worldwide to 3.7 million by 2018. With the switch over to EMV in the U.S., FIs have never been better situated to enhance the functionality of their ATM networks.

Ms. Cowper is head of International Marketing for Nottingham, U.K.-based Compass Plus Ltd. She can be reached at [email protected].