Thursday, September 14, 2017
Back in the swinging sixties, the ATM began life as a friendly robot-in-the-wall dispensing cash to customers in the high street. 50 years on, a new “cash robot” is added about every three minutes to what has become an installed base of over 3.2 million machines. Five decades of monumental production, averaging roughly 165 terminals per day, have seen ATMs spread everywhere, from the frozen far north of Alaska to McMurdo’s Antarctic research station near the South Pole, from Los Angeles to Lagos, from Cape to Cairo, from a desert aboriginal community in Western Australia to remote villages in the high-lying Himalayas.
As the ATM industry criss-crossed the planet, it freed up millions of customers to access their banked cash at any time of day or night, changing the way money is distributed in society forever.
Will the ATM, though, get to celebrate its 100th birthday in 2067?
Come with me on a journey to imagine the future of ATMs for the period 2017-2067.
We can look at scenarios that sound like science fiction, such as picturing ATMs on a Mars colony before 2050 or imagining a talking, walking ATM robot helping a branch customer in the 2030s. Or we can spread out on the table an actual blueprint for next generation ATMs. Since such a blueprint has already been signed off by the major manufacturers and suppliers in our industry, along with bank and independent operators, let’s focus on how the ATM intends to reinvent itself for what could become another 50 years of growth.
My take as a futurist is that the world is about to remake ATM technology in its own image. What I mean is that the machine will become much more customer-centric and will be fully connected to the Cloud, to the mobile channel and to the Internet of Things (IoT) which will surely dominate social life in the coming decades. The IoT will include all technologies, devices and systems connected to computers and to the Internet, from the orbiting satellites which enable us to have GPS systems in our cars to digital personal assistants or health and fitness apps on our smartphones. This will be a world in which billions of objects, devices and people will be connected to Internet and to computing power, as well as interconnected with one another. It will be a world increasingly managed by apps and in which the digital and physical dimensions will become increasingly inter-looped. It will be a world in which Artificial Intelligence will be so powerful that smart automation could threaten up to 47% of all existing jobs in the next 20 years.
In this probable future, the ATM is well-positioned to increase its importance in society. That’s because it’s a device that is already highly interconnected through national and international interbank networks, has prime locations in the high street and in the retail environment, and which is already able to perform cross-channel transactions, for example, in cardless cash transactions initiated by a customer owned mobile device instead of a traditional plastic card.
Cardtronics, the world’s largest ATM deployer, managing a vast estate of almost a quarter of a million ATMs, is currently extending cardless access to its US and UK ATMs. Its customers can make cash withdrawals by using a mobile phone banking app. Cardless cash avoids the threat of card skimming while enabling faster transaction times at the ATM through the pre-staging of the payout on an app. Customers can then receive an electronic receipt on their smartphones.
The next fifty years of ATMs will see the mobile device replace the card as the main way for customers to transact with ATMs. Some customers will even use chip implants to interact physically with ATMs from the 2030s onwards.
Near Field Communication (NFC) will provide one of the main technology platforms for this new interface in the 2020s. ATMIA’s Global Innovation Manual indicates that the first NFC-operated ATM in the world appeared in Spain in 2010 on a Fujitsu machine. Soon, there will be tens of thousands of NFC-enabled ATMs, and then hundreds of thousands. We have already witnessed the successful deployment of NFC at point-of-sale devices. Dan Goodman, Vice President of ATM & Cash Access Product Management in MasterCard’s Global Products & Solutions division, explains: “Just as we have seen the emergence and standardization of NFC as the technology of choice at the merchant Point-of-Sale for two-way communication between the terminal and the mobile phone, we believe NFC is the right technology to be used at ATMs for similar purposes and will eventually be adopted by most deployers.”
NFC-enabled ATM transactions will be faster, securer and more convenient than typical transactions today.
Another window into the future of ATMs is what’s happening in the bluetooth space in our industry. When iBeacons are fitted to ATMs, for example, they can radio a message to the bank apps of passing customers, prompting them to make a withdrawal as they approach the terminal. This simple, new kind of transaction revolutionizes the customer experience at the ATM, making it much more personalized, dynamic and interactive than traditional exchanges. Suddenly, the “cash robot” becomes connected to an increasingly smart environment.
Instead of calling customers to come over to the ATM, Idea Bank in Poland decided to take their ATMs to their customers. They launched a fleet of BMW i3 cars fitted with ATMs that take deposits and perform withdrawals. The ATM automobiles can be summoned on a bank app, like Uber for banks. These BMW ATMs give a new meaning to the idea of an autobank.
What is happening with cardless cash, iBeacons and app-based ATM automobiles is that the ATM is becoming more dynamic. Its journey of reinvention into a nimble, intelligent Consumer Banking Touchpoint has begun.
This transformation process in our industry is likely to accelerate when new artificial intelligence (AI) programs are incorporated into ATM software, expanding the range and kind of services which will be available. At the same time, artificial intelligence will provide Big Data analysis capability for ATM deployers to improve efficiencies, security and to automate sophisticated services to customers such as financial advice.
A recent report by Tata Consulting Services (TCS), based on research from 13 different global industries across 4 regions of the world, found that 32% of companies already use AI in customer services, 29% in sales, 29% in marketing, 27% in finance and accounting and 23% in R & D.
AI works through machine learning, whereby the computer can make improved decisions based on all the data it can continuously process at breakneck speeds. This will mean more targeted and personalized advice and service to customers. Live tellers via video at ATMs could well be augmented in future by avatars operated by AI.
“There’s a great opportunity to turn users’ interaction with the ATM from a mere transaction to an engagement tool,” comments Andy Mattes, president and CEO of Diebold-Nixdorf. “Our industry will innovate more in the next five years than we’ve done in the past 50.”
Overall, taking all these developments into account, we can say that the whole concept of ATMs is shifting from simple vending to smart, dynamic banking. The ATM will become a bank in a box, able to carry out most transactions and advisory services currently provided by a branch, sometimes through the increasingly popular self-service technology of video-conferencing. CaixaBank ATMs in Spain and Garanti Bank ATMs in Turkey can already offer around 200 different transactions. Worldwide, there’s a vast array of value-add ATM services, from tax payments to charity donations, from remittances and fund transfers to cash deposits, from social benefit payments to cash recycling, from ticketing and printing coupons to paying fines, from the opening of new accounts to the securing of loans and mortgages.
“A new wave of ATM innovation is approaching,” predicts Peter Kulik, Citibank’s Director of Digital ATM. “An industry blueprint for a next-generation network is emerging.”
These smarter ATMs will be especially crucial for a time of fewer bank branches. Britain alone has lost half of its bank branches since 1989, and bank branch closures have accelerated since the 2008 financial crisis. Not that the branch will ever become extinct. But branches are becoming smart, retail-style places with video teller services, robo-advisers, self-service devices and some live customer services personnel offering high-level advice.
Next generation ATMs will be linked to APIs (application programming interfaces) and Cloud architecture. APIs and the Cloud will allow ATM services to expand and to get to market much quicker. There will be payment hubs possible at these levels of software to provide a variety of payment types at ATMs. There will be account management hubs where a customer can carry out a range of financial services transactions including managing insurance policies, mortgages, funeral policies, loans, etc. In addition, the API ATM ecosystems will function as information hubs using AI and big data analytics to provide great data on, and for, customers. The new generation of ATMs will locate AI capacity in at the level of APIs or in the Cloud, which can be used to secure systems against hacking. I can attest that a wide degree of consensus on this kind of blueprint for next generation ATMs, among major vendors, banks and independent operators, has already been reached. We foresee an increasingly interoperable API ecosystem supporting an App based model for ATMs.
In an era of smart consumer banking, the AI-enabled ATM becomes a data-point as well as customer transaction terminal. NCR’s Bill Nuti has articulated this point as follows: “As one more of the connected devices that provide digital experiences, the ATM will be a great source of behavioral and transactional data that financial institutions can use to provide highly personalized recommendations to consumers and make better business decisions for their own organization.”
The data-rich ATM will continue to complement other bank channels – and not just the mobile channel. Francesco Burelli, Managing Director of Accenture Payment Services, sees ATMs as a support for online banking, too, providing a “physical touchpoint for banks to service its customers”. Already digital wallet transactions, for the likes of Samsung Pay and Apple Pay, are possible at cutting-edge ATMs. The more ATMs become a hub for connecting online and mobile channels, the stronger their future will be.
Implementing a global blueprint for an API App model over the next few years will provide a whole new generation of relevant ATMs. As this next era, in turn, enters maturity in the late 2030s, there will already be technologies, such as advanced and miniaturised robotics, chip implants and renewable energy systems, as well as technologies which do not yet exist, which the ATM will be ready to absorb, just as it has integrated cards, biometrics and mobile channels throughout its evolution.
However, before we become too futuristic, let’s remember the old saying of the French writer Jean-Baptiste Alphonse Karr (1808–1890) that the more things change, the more they stay the same (“plus ça change, plus c'est la même”). Often, for example, digital assets and digital transactions end up being converted into tangible assets like cash. Examples of this financial “gravity” effect include digital wallet transactions at ATMs, Bitcoin ATMs, where cash can be exchanged for bitcoin and vice versa, cash-on-delivery services for online orders, P2P money transfers via ATMs, cash fulfilments of M-Pesa mobile money transfers and PayPal payments, as well as Uber Cash programmes.
Although the ATM is becoming a Consumer Banking Touchpoint, it still carries out the original goal of its co-inventor, John Shepherd-Barron, which was to vend cash out on the high street. Cash, growing in terms of currency in circulation at rates significantly higher than average GDP rates, definitely isn’t going into the museum in this generation or the next. It has proved one of history’s most endurable and popular technologies and has been the most dominant form of money ever. Given that cash is not “broken” and that there is no compelling business case to remove cash, I can safely assume it will still be needed in 2067. As Tom Pierce, Chief Marketing Officer of Cardtronics, the world’s biggest ATM deployer, points out: “Even as consumers embrace the digital transformation of banking and retail, there continue to be a multitude of instances where cash is still exactly what people want – and increasingly they want it on-demand. The ATM is emerging as the vital physical component of the digital model.”
When the ATM becomes a centurion on 27th June, 2067, it will have evolved into a complete bank in a box, intelligently connected to the home, the bank, digital channels, satellites, sensors and, most of all, to the customers it will have served for a hundred years.
 Global ATM Innovation Manual, p. 27.
 Global ATM Innovation Manual, p. 30.
 “Measuring the Impact of AI” TCS, 28 February, 2017
 Global ATM Innovation Manual, p.12.
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