2024 ATM trends: What can we expect?

2023 saw several exciting trends in the ATM space, from the growth of contactless/tap to the expansion of the XFS4IoT standard. Now that we have entered 2024, it's time to look ahead to see what trends we can expect to see this new year with a focus on three key areas: AI, video banking and cash automation.

ATM AI

With the advent of AI, several possibilities have opened for ATMs, which has the potential to drive the industry forward in 2024.

William Budde, VP of banking strategies and solutions at Hyosung Innovue, said that while AI is still in its very early stages, it will be particularly useful for combating fraud.

"AI capabilities are a big topic in pretty much every industry, and banking is no exception. It is still early in the life cycle, but there is a noticeable increase in research and design work around the possibilities that AI can bring to the industry and is something to watch as it continues to evolve and mature in the near future. In banking, we'll probably see some of the first impactful A.I. usage around fraud detection and prevention, as that type of function really plays to the strengths of a decision model that can be taught based on historical data," Budde said.

However for ATMs specifically, there are other use cases, such as improving maintenance schedules and providing individualized offers to customers.

"The evolution of artificial intelligence is driving a shift from reactive to predictive service models, as well as unlocking new capabilities in personalization and fraud detection," Joe Myers, EVP of Diebold Nixdorf, said in an email interview. "By analyzing data patterns, trends, leading indicators, and other key data points, impending failures can be identified, so maintenance activities can be scheduled at a time of low customer usage to avoid an unplanned future outage and maximize the uptime of a device. AI-powered insights have the potential to harness advanced analytics to understand individual consumer profiles, allowing financial institutions to put forward highly relevant and customized/individualized offers and better detect unusual activity."

Video banking

As banks change or reduce the number of branches in their network, they have also explored other ways to reach customers outside of traditional branch hours. Budde points out that as many banks cut back on branches, they have had to rely more on ATMs to deliver those banking tools to customers.

One tool that has been on the market for a while is video ATMs, aka ITMs that are used to deliver banking services to customers outside of regular branch hours. Will 2024 be the year these devices truly become ubiquitous?

"Financial institutions have been laser-focused on their operating expenses, especially as staffing now accounts for over half of the total operating costs for banks around the globe," Myers said. "To reduce operating costs, FIs are accelerating their digital strategies, and we are seeing more interactive video teller ATMs (IVTs) being deployed. Video tellers allow FIs to be more agile and innovative and offer nearly 90% of teller transactions, from denomination-specific cash withdrawals to balance inquiries, KYC and AML checks, account openings, check orders and card replacement, all with per-transaction savings."

Budde said that in many cases banks are replacing traditional VAT tubes with video ATMs.

"Interactive video ATMs have become a popular way to provide additional services to customers, many times extending hours at drive-up lanes or providing additional points of access at stand-alone ATMs between branch locations. Many financial institutions are moving to a model where their primary drive-up service is through video ATMs rather than traditional VAT tubes, providing a more efficient model for offering drive-up service across a branch network."

Cash automation

While cash isn't going anywhere, its usage is decreasing in many markets. As a result, it is more important than ever for banks to deploy operational efficiencies when it comes to handling cash.

Jodi Neiding, VP of Americas banking portfolio at Diebold Nixdorf, said in an email interview that with cash automation solutions such as cash recycling, it can offer "20% savings in total cost of ownership and reduce cash replenishment efforts by up to 75%."

In fact, she sees 2024 as the year that banks will fully leverage cash automation.

"ATMs are transforming from a cash machine to a critical touchpoint in a financial institution's (FI's) digital strategy. Advanced features such as mobile and ATM integration and flexible cash recycling technology will be key levers in driving this trend," she said.

Cash recyclers can save financial institutions money in another way, since Neiding said we are seeing more cassette-based TCRs in the market. This allows ATMs and TCRS to "leverage common service parts and processes within their self-service channel and branch, as well as common services like reporting and monitoring," Neiding said.

"While recycling ATMs have been around for decades globally, and have even been in use in the US for approximately 10 years now, we've seen a sharp acceleration in growth recently," Budde said. "Financial institutions are facing increasing costs associated with managing cash, both in labor costs and interest rates, and are looking for new tools and processes that can improve operational efficiency. As more FIs learn about the benefits of recycling, and more processors add support for recycling functionality, we will continue to see growth in using this technology."

Other trends of note

Of course, these aren't the only trends on the horizon for ATMs, as many are older features just now reaching higher market saturation.

Other trends to watch in 2024 include:

"An increase in mobile and ATM integration driven by dual-factor authentication between ATMs and mobile devices, as well as digital wallets," Neiding said.

Contactless ATMs, which eliminate skimming while delivering a solid customer experience, Myers said.

"Alternate authentication — things like using NFC, a one-time passcode, biometrics, or user IDs," Budde said.

Lastly, all of these isolated trends point to a bigger need in the space: a fully integrated ATM solution that can deliver contactless, cash recycling and advanced software in one package.

"We are seeing the need for an integrated ATM and cash ecosystem: hardware, software and cloud services that work together in both a vertical and horizontal solution assembly using industry-standard, cloud-native technology and APIs," Michael Engel, managing director and VP of software and banking at Diebold Nixdorf, said in an email interview. "From a consumer perspective, this means the removal of friction from silos and the provision of seamless journeys around everyday financial use cases for both consumers and businesses through all consumer touch points. For banks, this means a fully integrated solution stack that provides the robustness of industry-grade standards and out-of-the-box deployable solutions."