The Forgotten Channel – the fall and rise of ATMs – Themes from BAI 2011

For years the ATM channel has been taken for granted by the banking industry. The focus of innovation has been on other channels like mobile, but this is rapidly changing. Evidence presented at BAI 2011 by BBVA Compass suggested that ATMs are very important in driving customer satisfaction.

So despite the buzz over digital channels, according to David Dove of Dove Capital Partners, the real action is around ATMs. In fact while cash seems to be on the way out thanks to technology, the use of cash per capita is growing faster than GDP according to a Federal Reserve Bank of Boston study.

ATMs are a growing business. There are 2mm ATMs around the world today going to 2.5mm by 2013 according to estimates from Dove Capital Partners. Research from Dove suggests 57% of consumers consider ATMs important in choosing a bank. But location is more important than numbers. 

Consumers are more concerned about access.

Consumers don’t just go out to get cash from ATMs; they also run errands at grocery stores, restaurants and gas stations. Therefore locating ATMs at locations where those errands take place rather than at branches may be a better way of expanding their usage. It also drives traffic to other customers that depend on consumer access to cash to increase sales.

From automated teller machines (ATMs) we are rapidly moving to intelligent teller machines (iTMs).  New technologies are reinventing ATMs. Image technology is one example. Seeing the image of a check on the screen gives customers almost the same feel as an actual teller and added reassurance that the transaction has been credited to their account. Making ATMs real time also resonates well with consumers as does extending the cut-off times so they can get good value later in the day.

ATMs have even attracted the attention of the most creative design agencies. IDEO worked with BBVA to create next generation ATMs supplied by NCR using Microsoft technology in some of their branches in Madrid. These ATMs have bigger screens and smaller casing than traditional ATMs. Customers can see their cash counted out before them in different denominations on the screen before they cascade down to the single slot where transactions go in and out.

The biggest obstacle to ATM usage is surcharges. Banks are rediscovering the value of their ATM networks but it’s not just technology that matters. Pricing and location are also important.



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