Industry Insights: Automated Tellers—the Next Wave

Banks and credit unions revitalize a traditional channel

ATMs were the original banking self-service—a channel now booming with new technologies. They gave customers their first taste of 24-hour convenience, and allowed banks and credit unions to reduce their workforces. Teller transaction volumes have dropped 40% just since 2010, according to a 2016 ATM Insights study.

Lest we overstate the case for self-service, however, many recent studies also show that consumers—particularly millennials—continue to need personal service as well. So, the next wave for financial institutions is to become an omni-channel provider, allowing individual account holders to customize their banking experience.

Interactive teller machines (ITMs) are a key element in the hybrid personal/self-service banking service model. They combine 24-hour ATM functions with video remote teller interactions when needed—typically not 24-hour, but often more than branch hours. Teller costs can be optimized, as in call centers, while users receive best-of-both-worlds flexibility.

And just like that, a whole new set of possibilities opens up: targeted marketing, rapid decisions, cross-channel services, robo-branches and more.

Does your institution use ITMs or video tellers, and do your future plans address upcoming transitions? This collection of recent articles will help you make the most of your ITM strategies:

• The Evolution of the ATM, Credit Union Journal. A quick timeline of ATM technology iterations over the past 50 years. Considered against this context, ITMs, which are among the more recent developments, can be seen as a pivot point in the development of the hybrid personal/self-service model.
• Why big banks are in an arms race to upgrade the 50-year-old ATM, American Banker. Update on ATM use by the largest retail banks, from Federal Reserve 2016 data. Interestingly, ATM withdrawals have remained steady at +/- 5.8 billion a year since 2012, even as branches became more automated and started to adopt artificial intelligence. Article suggests that the whole traditional ATM channel is entering a high-tech transformation.
• Facility Solutions: Robo Branches, the Next Big Thing? CUES. Recent information about this early-stage development being worked on by financial institutions. Combines an ATM with video conferencing to connect account holders with a variety of financial institution specialists.
• 9 Best Practices To Operate Interactive Teller Machines, creditunions.com. Both credit unions and banks will find advice about how launching ITMs can help their account holders overcome barriers to conducting transactions a new way.

About the Industry Insights Series

Alogent’s Industry Insights—this blog and the companion newsletter series—track insights into transformative financial technologies as they happen. Our diverse team of experts pulls the threads together and weave in thoughtful—often actionable—analysis to help banks and credit unions keep their competitive edge and meet new generations of consumers where they’re going next.