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The consumerization of finance is putting intense pressures on banks that are already grappling with the rising costs of maintaining the local branch and the "internet of things." Customers reside in a world of Spotify and ApplePay, where speed, usability and reliability are critical. And yet, many bank customers still have to wait in line at the teller window to replace a lost debit card or to pay off your bank credit card. Can't and shouldn't bank ATMs get a bit smarter? If Amazon can tell you what you might want to buy next, couldn't your ATM offer more services tailored to what you might need?

Without a doubt, the branch is still a crucial part of the banking infrastructure, despite the growing number of digital transactions. According to a recent Celent study, only 26% of banks expect their branch count to decrease in the next five years. Why? Because branches still remain a huge source of new sales opportunities. Additionally, customers still need the local branch, but are expecting higher value interactions. McKinsey & Company found that customers using mobile and online banking more than once a week are also over 60 percent more likely to be active retail branch users.

The ATM plays a crucial role in the branch transformation journey, to deliver greater efficiencies as well as creating better, higher-value interactions with customers, not only between the ATM and the customer, but empowering the teller with smarter technology as well. First emerging as cash machines in the 1960s, these “automated teller machines” have evolved to provide a wider range of functions from check deposits to money transfers between accounts. However, the vast majority of ATMs are unable to create a truly dynamic interaction between the customer and the bank. The US in particular is an innovation laggard when it comes to ATM functionality. In Latin America, for example, the typical ATM has 50 to 75 features, compared with 25 in the US, enabling customers to pay water bills or open up new accounts.

The future of ATM transformation is rooted in creating smarter ATMs that offer application-rich functionality designed around the customer and his/her needs. Polish bank Idea Bank recently introduced a literally “mobile ATM” – a car with a built-in cash deposit machine that can come to you within 30 minutes. Within the ATM platform itself, banks are starting to explore integrating video teller functionality where customers can stand at a kiosk and speak with a financial rep at a call center via video conference. Biometric scanning will allow for better security. Tablet-enabled ATMs will allow untethered tellers to roam the branch to interact with customers freely and directly.

In an increasingly inter-connected environment, ATMs will also become more internet-enabled and app-oriented, opening up a vast array of potential new services. For example, consumers may soon be able to walk up to an ATM and instantly get a loan or overdrafts based on their credit scores. A more app-oriented interface will allow banks to not only offer banking services to their clients via the ATM but also to purchase airline tickets, pay bills, and more.

With the ubiquity of the smartphone, consumers may soon also be able to pre-load transactions on their phone on their way to an ATM, walk up to the machine and quickly finish that transaction – bridging the gap between bank mobile apps and the physical branch.

At Polaris, we believe that ATMs are due to go through a revolution, not an evolution, and that as part of this process, that banks need to innovate. This is the only way that bank branches can deliver the kind of high-value experience customers are looking for, even as customers leverage omni-channel banking experiences for transactions.

About the Author

Amhit Bute is the Global Head of Payments for Polaris.  He is a subject matter expert in payment and settlement systems with specialization in Financial messaging systems and standards and payment-related regulations. He can be reached at

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