What's the future of ATMs, ITMs?

As banks continue to digitally transform their operations, the question is how ATMs fit into this strategy. Could it be a case of ATMs disappearing off high streets, like bank branches have, or can financial services institutions look at ways to evolve these devices and adapt them to the changing tides?

Even though 2023 saw a 3% decline in the number of ATMs from 2022, according to the European Association for Secure Transactions, they still hold significant value for customers. ATMs can no longer be thought of as machines that just dispense cash — they should be seen as multifunctional banking kiosks, where transactions, such as money transfers, bill payments, and cheque deposits can be made.

Creating a strong cash management strategy with AI and machine learning

To enable the future for ATMs, banks do need to have a strong cash management strategy that keeps the operating costs of self-service fleets down while assuring the highest levels of cash and service availability.

A way to do this is by leveraging artificial intelligence (AI) and machine learning (ML) to monitor current cash levels and predict future needs based on past activity. Through using real-time data, banks are able to create tailored strategies for each ATM and limit cash over or under supply, so financial services institutions save money by only making necessary trips to refill ATMs. Not only that, AI and ML create more streamlined and efficient back end operations for banks through automation. As such, this ensures minimal downtime of the ATM, and so customers have an uninterrupted banking experience.

Future of self-service banking is ITMs

But it is not enough. The convergence of ATM technology and self-service banking continues to reshape the market. Interactive Teller Machines (ITMs) can be used to bridge the gap between in-person counter services and ATMs.

Traditionally, ITMs either use the ATM network, or required a video teller to control the ATM and teller system simultaneously. Even though customers were able to be seamlessly, connected to remote tellers in real-time and access always-on customer service 24/7, this approach came with a number of limitations. These include the ATM network only accessing accounts tied to the card, network-imposed transaction limits, and video tellers only available within certain hours. The cost of the infrastructure and remote tellers could also be extensive to buy and maintain.

Therefore, to overcome this, the newer, more advanced ITM solutions minimize the use of video tellers, or eliminate it, to deliver even more transactions via enhanced self-service capabilities. One of the most innovative developments of ITMs is the introduction of core-integration on the machine into the banks' systems. As such, customers will be able to access their accounts, perform advanced transactions and complete other banking activities 24/7, without the need for a video teller.

In addition to customers being able to carry out usual ATM transactions on these machines, they will also be able to open new accounts, receive financial advice, and a range of other digital banking transactions. This could also go further to create more personalized virtual banking services.

However, as ITMs are expensive machines, financial services institutions will need to ensure that the opportunity cost between investment and cost-saving are truly worth it. As well as the expense of these machines, banks will need to train, and may need to hire more staff to be virtual tellers. Further, like ATMs, ITMs need to be protected from physical and cyberattacks.