The ATM was born just a stone’s throw from Swingin’ London in 1967. The first drive-thru pulled up moments after “The Great Gatsby,” in 1930. Two technologies, it would seem, better suited for a Time-Life documentary reel than the real demands of today’s life and times.
And yet, bank history fans, they persist.
For all the artificial intelligence, apps and wi-fi in the world, we can’t seem to do without our pneumatic tubes and four-digit PINs. Why can't new channels take these ancient technologies away? And if they’re here to stay—cash, after all, has been around for millennia—how might they be improved upon? Tweaked? Repurposed?
“The focus of banks is always about customer choice, so even while we move towards a cashless society, a sizable portion of consumer transactions are still in cash,” says Aubrey Hawes, senior director product marketing, Oracle Financial Services.
And so the connection: Cash, the oldest banking constant of all, plays a key role in keeping ATMs and drive-up service alive
“As long as cash is in play, there will be demand for ATMs and drive-ups,” Hawes notes. “In the U.S. today, 24 percent of consumers still use cash for all purchases, and many more use both cash and credit. That means cash is still in play in a significant way.”
This also has something to do with age demographics, as it’s common knowledge that baby boomers utilize cash more than digital-native millennials and Gen Z. Thus, “We see the need to keep ATMs, even though digital transactions are fast becoming the de-facto,” Hawes says.
Jaime Dominguez, director, product strategy, bank solutions at Fiserv, agrees. “As long as there is a need to withdraw cash, ATMs will exist.”
That said, this earliest of financial services technologies needn’t be excluded from a digital-age face lift.
“There’s a need to transform ATMs into smarter machines that offer more self-service capabilities and facilitate both greater convenience for the customer and greater operational efficiencies for the bank,” Dominguez says. “This is important because our last, best experience becomes our go-forward expectation.”
So how might these old standbys be fashioned for the future?
Once the hub for all physical transactions, branches today exist more “for customer relationship building and cross-selling,” Hawes says. “We are seeing more data-driven integration, where branches take digital customer information and use it to enhance their customer knowledge and make interactions more personal. We’re also seeing branches become smarter digitally.”
Here, recent history in high-tech retail is instructive. With its first brick-and-mortar location in 2001, “Apple saw the need for the Apple Store as an extension of its digital relationship,” Hawes says—adding that banks will always experiment based on how they expand their customer relationship.
Questions of convenience
If ATMs, drive-thrus and smartphones have a common denominator, it’s convenience—though the past, however written in stone, could give way to a future written in code.
“While ATMs and drive-thrus remain convenient for some, the global demand for modern banking conveniences is growing,” Hawes notes. “In response, ATMs will either grow smarter—perhaps allowing for contactless transactions or biometric authentication—or be replaced by something new and better, such as rapidly evolving mobile wallets.”
It’s also possible that data-driven ATMs will take on additional roles, which in a sense would make them more “automated” than ever. The future could seem them integrate with mobile technology, adding on features such as location mapping. Or remote cash withdrawals, completed in transit, could be picked up at an ATM or drive-thru.
And so follows this lesson: Technology, no matter how newfangled or old school, must decisively solve a pain point and change with the times to guarantee its staying power.
Here’s what that means looking ahead: “Evolution in banking is happening so fast—even as implementation lags behind—that the most successful technologies project to adapt seamlessly to whatever the future brings,” Hawes says.
The future’s in the instant cards
Meanwhile, are any up-and-coming branch technologies poised for success? Instant issuance—where institutions create new or replacement debit and credit cards on-site—continues to gain critical mass.
The process is fast, grants cardholders immediate purchasing power, saves money on mailing and creates a frictionless experience, says Rob Dixon, head of product and business development for Card@Once at CPI Card Group.
“Instant issuance is helping drive branch transformation for banks and credit unions everywhere, with Aite Group predicting that more than half of all financial institutions will have the technology by 2021,” Dixon says.
The convenience and instant gratification “can do wonders for a branch’s customer experience, especially given consumer appeal for all things on-demand,” he adds. “When adopted through a Software-as-a-Service (SaaS) model, instant issuance doesn’t have to be complicated or an IT burden for branches. … It can also drive incremental activation rates, transactions and interchange revenue, giving financial institutions even more bang for their buck.”
And with Bank of America’s Erica paving the way, “Technologies such as customer service chatbots and digital payments providers serve distinct, relevant purposes,” Hawes says. “Yet they should remain scalable and flexible enough to adjust as consumer demands evolve. We can also certainly predict success for technology capable of undergirding and optimizing the banking industry such as blockchain.” (Listen to a former Bank of America executive discuss Erica on this BAI Banking Strategies podcast.)
With all that to look forward to, there’s still a chance some vestigial banking appendages will hang in there. Like…
“Paper receipts still seem to be around in some banks,” Dominguez said. “Another big one, which I’m not sure I would get rid of, are cookies. Whenever we’re in town and walking around, my kids love going in for the free cookies. I won’t lie, I like them too.”
Though at least for the time being, there’s no ATM capable of dispensing them—yet.
Jeanne Pinder is the founder of ClearHealthCosts.com, an award-winning startup bringing transparency to the health care marketplace. She was an editor, reporter and human resources executive at The New York Times for close to 25 years.