The ATM at 100, a forecast for 2017–2067: Part 1

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by Mike Lee, CEO, ATM Industry Association

Back in the swinging sixties, the ATM began life as a friendly "robot in the wall," dispensing cash to customers in the high street. Fift 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 crisscrossed the planet, it freed up millions of bank customers to access their cash at any time of day or night, changing forever the way money is distributed in society.

But will the ATM get to celebrate its 100th birthday in 2067?

Come with me on a journey to imagine the future of ATMs from 2017 to 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 be 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, 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 that enable GPS systems in our cars to the digital personal assistants and 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 interlooped.

It will be a world in which artificial intelligence will be so powerful that smart automation could threaten up to 47 percent of all existing jobs within the next 20 years.

In this probable future, the ATM is well positioned to increase in importance to 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-million ATMs, is currently extending cardless access to its U.S. and U.K. ATMs. Its customers can make cash withdrawals by using a mobile phone banking app.

Cardless cash eliminates the threat of card skimming while enabling faster transaction times at the ATM through the prestaging of the transaction on an app. Customers can then receive an electronic receipt on their smartphone.

The next 50 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 onward.

Near field communication will provide one of the main technology platforms for this new interface in the 2020s. The ATMIA 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.

According to Dan Goodman, MasterCard vice president of ATM and cash-access product management in the global products and solutions division, "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, more secure 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 ATMs are fitted with iBeacons, for example, they can radio a message to the bank app of passing customers, prompting them to make a withdrawal as they approach the terminal.

This new and simple 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 attracting the customer to the ATM, Idea Bank in Poland decided to take the ATM to the customer. They launched a fleet of BMW i3 automobiles outfitted with ATMs that take deposits and perform withdrawals.

These ATMs can be summoned via a banking app — like Uber for banks. They give 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 touch point has begun.

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The journey will continue in part 2 of Lee's commentary.