ATM users want choices, so why aren't we giving them any?

Rod Bungey, North America sales director, Renovite Technologies 

ATM users want choices. If ATMs were to offer consumers the ability to open an account, take out a loan and other services normally offered by actual bank branches, ATM usage would probably go up.

As it stands, increasingly, consumers prefer banks branches over ATMs. According to ATM Marketplace's biennial ATM Future Trends Report, in a recent survey, a larger percentage of respondents (43% in 2019 versus 38% in 2017) said they'd rather have a branch nearby than an ATM.

Why is that? Is it because consumers would rather interact with actual humans? Or is it because the variety of financial services offered at a branch dwarf those offered by ATMs? I would suggest the answer is both.

Here's why: the increase in respondents stating they would prefer a bank branch over an ATM suggests consumer experience is increasingly the most important aspect of how financial services are offered. After all, five percentage points is a significant shift over two years. It also reflects a growth in electronic payment systems and a decreasing reliance on traditional "cash-only" ATM services.

In most cases, based on their current architecture, ATMs don't offer a great consumer experience or much choice. Until that changes — that is, until banks get a grip on rethinking the technology underpinning their ATM fleets — this trend is likely to continue.

Consider what might happen if we were to tweak the survey question and ask: "Would you rather have an ATM or a bank branch nearby, if they offered precisely the same services?" Or, how about this: "What if you could engage with a human teller via an ATM video service that offers the same experience as in-branch banking?” My guess is respondents might opt for the ATM, particularly since ATMs are generally open after hours and on weekends. 

In a recent blog post, Jim Tomaney, our company COO, pointed out that ATMs haven't changed much in terms of the services they offer since they first came onto the scene decades ago. He argues that they are held back by proprietary software and outdated infrastructures. If financial institutions want ATMs to evolve, they need to invest in modern technologies, so that new services can be added to the machines with ease.

Will that ever happen? Hard to say, but If and when ATMs do evolve, perhaps consumer preferences will shift back in favor of using them again. The ability to access banking services 24/7, at a time convenient to working consumers, is a fundamental need of the U.S. consumer.

It is frustrating that many of the services bank branches offer, like loans for consumers or cash-deposits for businesses, aren't available at many ATMs. Smart ATMs and so called "banks-in-a-box" are realistic alternatives to bank branches, so long as the right technology is in place to enable them to replicate both the services and experiences offered by the branches.

The emergence of Monzo and other digital-only banks in the U.S. will only increase the pressure on the traditional banking sector to reduce operational costs. As a result, it's likely that bank branches will continue to close. It's going to be up to banks, credit unions and other financial institutions to adapt to what consumers want — or risk losing them altogether.