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Long Live the ATM: Automated Teller Machines Are Still An Important Delivery Channel for Banks

The automated teller machine may not be as hot as other banking channels, but the ATM remains a critical component of banks' multichannel delivery strategies.

Return on Investment

Of course, ID ATMs can be costly to install across an entire fleet. But even with a higher price tag, next-generation ATMs deliver ROI, since they can offload certain teller and call center tasks and can add value by providing messaging for new products and cross-selling, Mercator's Patterson contends.

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Since encouraging self-service deposits allows banks to redeploy branch staff to improve the customer experience and reduce costs, ATMs are transforming branches, asserts NCR's Tramontano. "Offloading some tasks to the ATM allows banks to rescale their branch size." he says. For example, NCR's Interactive Teller ATM technology allows tellers and customers to talk via videoconferencing, Tramontano relates. This allows banks to centralize tellers, expand their teller reach beyond traditional brick-and-mortar branches, and provide teller service even when the branch is closed, he says.

Although ATMs may be the epitome of self-service, some banks are positioning ATMs as part of a hybrid service model. Mercator's O'Brien says banks are positioning an experienced teller to act as a "greeter" at an advanced-function ATM to answer questions, encourage self-service and even cross-sell, just as they would at the teller line. But banks must be aware of a possible backlash from newer-generation ATMs, he cautions. "Customers process more complex transactions at the ID ATM, increasing queues," O'Brien warns. "An insufficient number of ATMs in a high-volume area can cause customer dissatisfaction."

Chuck Somers, VP, core self-service solutions, for North Canton, Ohio-based Diebold, acknowledges that banks need to be cognizant of customer wait times. But he points out that most transactions at the newer ATMs are not significantly more time-intensive than simple withdrawals or balance inquires.

Nonetheless, the ATM will continue to be a big part of banks' overall channel strategies, Somers predicts. "The key is to make sure that information the customer receives at the ATM is synchronized with other channels so there is consistency," he says.

"Banks want more than operational efficiency from their ATMs," Aite's Albertazzi adds. "They want a competitive advantage by introducing a personalized and integrated user experience supported by ATMs with feature-rich and advanced functionality."

Mobile Devices and the ATM

Allowing customers to use their smartphones to activate and deactivate their debit cards is just one example of a truly integrated customer experience across channels. Chris Rowe, VP of self-service products at Diebold, expects to see continuing integration between mobile devices and ATMs. For instance, Rowe suggests that customers will be able to stage a transaction by initiating a withdrawal via a mobile banking app and then using a one-time PIN, sent to the mobile banking app, or an NFC-chip-enabled card to complete the withdrawal at the ATM.

And rather than print a paper receipt, the ATM can send a text message to a mobile phone, providing an additional level of security, adds Chuck Somers, VP, core self-service solutions, Diebold. A customer receiving a text message about a $200 withdrawal he or she didn't make will immediately report the possible fraud, he explains.

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