If the consumer public were to have a slogan to characterize its willingness to change, "Out with the old, in with the new" might be an appropriate mantra. Witness the digital revolution, which in a fairly short period of time, has fundamentally transformed life as we know it. From do-it-all-for-you smartphones to intelligent home personal assistants, more than 8 in 10 Americans now use products with AI features on a regular basis, according to Gallup polling.
Several of these same digital technologies are also used for payment purposes. Take this holiday season as a classic example. Digital payments – specifically those administered via smartphone – reached $4.1 billion not on Black Friday, but on Thanksgiving, according to Salesforce. Transactions such as these are in line with the general theme in recent years, as cash purchases aren't quite as common. In fact, data from the Pew Research Center found that nearly 30% of Americans make exactly zero purchases using cash in the typical week. That's up from 24% as recently as 2015.
Given consumers' diminishing reliance on physical currency, some within the banking community question how branch technology like ATMs can stay relevant. After all, the ATM has been around for more than half a century now. And while ATM terminals are more ubiquitous than ever, cash dispensing has slipped.
Do ATMs maintain a place in the new digitally-driven marketplace? In a word: absolutely.
No infrastructure, no Netflix
Consider video streaming services, such as Netflix, Hulu, Amazon Prime and AppleTV. As evidenced by the number of households who have "cut the cord" and discontinued their cable subscriptions in favor of web-based programming, streaming has fundamentally altered how we consume television and movies.It has won favor by allowing people to customize their viewing options, which has also helped them save money.
At the same time, though, Netflix and the like probably wouldn't be as widely available or influential as they are today without the physical and telecommunications infrastructure that allows streaming services to appear on television screens, laptops, tablets and smartphones. That's because these systems have evolved and "kept up with the joneses." Few could have imagined as recently as a decade ago how far the internet of things era has come and the systems that support wireless connectivity.
ATMs, similarly, are no longer used solely for one purpose. While it's safe to assume most people still go to ATMs to obtain paper currency, they're increasingly almost as multifaceted as smartphones, with some newer models being capable of dispensing every dollar denomination, print lottery tickets, authenticate identities, pay bills and continue transactions that were originally conducted from other computerized means.
In short, ATMs haven't been stuck in yesteryear; they've kept up with the times in response to the digital revolution.
"ATM technology has evolved," Nguyten Viet Hung, vice president of Bank for Investment and Development of Vietnam Bank Card Center, told ATM Marketplace. "Many newer ATMs offer a wider range of convenient services – including cash and check deposits, cardless transactions, person-to-person payment and check cashing – and cardholders are taking notice."
"Even though ATMs were born in an analog era, they've grown up and matured in a digital world."
Supported by consumer response to new features, financial institutions are expanding their ATM networks. Indeed, 47% of respondents in ATM Marketplace polling said they will either increase both their branches and ATMs in the coming years or at the very least the number of operable ATM terminals.
Even though ATMs were born in an analog era, they've grown up and matured in a digital world. Their legacy origins can make it seem like they're off on an island, but in reality, they can't be separated from digital strategies. ATMs and digital are inextricably linked. The digital experience shapes retail expectations and vice versa. Ultimately, financial institutions are compelled to develop and execute a strategic plan that considers both.
However, you may be surprised by just how many FIs have yet to formulate a "real" digital strategy. According to the Boston Consulting Group, that figure may be as high as 43%. That's a surprisingly large share, given that 86% of financial institutions recognize the fact that digital will ultimately "fundamentally change" the economic and operational realities of banking as well as the landscape when it comes to competition from other organizations.
BranchServ can provide your FI guidance with regard to the ATM-digital equation and how it interconnects with your overall optimization strategy. We can help you put your best branch forward by servicing your ATM terminals through future-proofing technology and software so that they are a strong complement to your customers' digital demands. Advanced terminals are not only the wave of the future, they're the here and now. We can provide the installations and solutions so your systems remain relevant and readily equipped for ongoing success. Please contact us to learn more or request a free demo.