The ATM at 50, part 1: How do you innovate after half a century?

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By Tom Harper on ATMmarketplace.com

As I look back on my 20 years in the ATM industry, I'm surprised by a few things: 1) how fast it's gone; 2) how much has changed; and 3) how little has changed.

Yes, I just contradicted myself. But I feel the industry has done the same thing. It's had its watershed moments for sure (like the lifting of the surcharge ban and occasional groundbreaking mergers and acquisitions), but when I walk the aisles at ATMIA conferences these days, the booths don't look much different than they did two decades ago.

I see many of the same faces, too, and sense a similar optimism for the future. The recognizable old regulatory cloud still floats overhead, rumors of IAD and bank consolidation still circulate, and the familiar peal of high-stakes competition emanates from the manufacturers.

The past few years, though, I've heard a word on the lips of my colleagues and friends so often that I wonder if it's become more of a marketing term than a fact.

The word?

Innovation.

Why the definition matters

What does innovation mean to you? Peter Drucker defines it as "change that creates a new dimension of performance."

As I've researched this concept, I've wondered whether the ATM is in fact an innovative technology or just an "old school" invention fighting inevitable decline.

The answer obviously matters to our industry's future. If we all work together to transform the machine rather than simply update it, we can sidestep the commoditization nipping at our heels

Innovation in three dimensions

This requires us not only to define and discuss the concept of innovation, but also to drive the essence of it into our industry. Several writers refer to it as a two-sided coin, combining form and function. But that coin is actually three-dimensional. Wikipedia summarizes it well:

The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem …

The ATM has faced many "problems" — regulation, security, mobile competition, and operating system upgrades to name a few. Some of our market's responses have been radical, but mostly we've seen a steady stream of smaller changes.

After 50 years, the larger problem is how to reinvent the ATM so that it flourishes for another five decades. The following initiatives flesh out this challenge in three dimensions — though I'm sure you could come up with several more.

1. Design for responsiveness. In web design, "responsiveness" simply means that the layout of a page changes based on the dimensions and orientation of the user's screen. (Flip your phone from vertical to horizontal for a quick demonstration.)

While the look, feel and functionality of the ATM can be configured to fit the needs of the customer, innovation requires us to constantly think up new designs that adapt the ATM to multiple environments.

This means making it not only smaller, but also weather-durable, solar-powered, crime-resistant, green, mobile-enabled, retail-friendly, impervious to sand and salt, and any other off-the-wall feature we can dream up!

2. Deliver increasing value. A well-designed machine must offer more than just reconfigured hardware. It must also deliver new opportunities to increase ROI through customer-centric features such as improved reliability, convenience, usability, video functionality and customer service — and competitive transaction costs.

The challenge for architects of back-end software, communications and graphics is to reduce friction and constantly increase consumer value. But at the same time, industry leadership must enhance the ATM business itself through increased transactional profit and efficiency.

3. Distribute services more efficiently to the masses. Cash in circulation has grown at a consistent rate of more than 8 percent annually. And consumers worldwide will always want easy access to their wealth.

The cashless movement is no more than a footpath along the ever-widening ATM highway (just consider that the global estate has more than doubled in size over the past 10 years!)

As the global population grows and shifts demographically, demand for cash and other forms of payment will increase with it. More people equals more money moving about.

This growing demand requires us to rethink the way we distribute cash. Recycling is a perfect example of the type of creativity we need.

I'm confident that the cash management, cash-in-transit and first-line maintenance sectors will lead us to further advancement in this area.

When was the last time you rethought your own corner of the industry? I'm sure you've got some big ideas that need to be heard.

I have a feeling that 20 years from now our lovable ATM will look very different.

Will it turn into a simple app on our phones, hunting for the nearest retail cash register with enough currency to fulfill our withdrawal request? Perhaps, the way our world is going.

Three things I'm sure of: The time will go fast; technology will evolve beyond what we can imagine now; and we'll still be wrestling with many of the same issues we face today.

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Tom Harper is CEO of Networld Media Group (publisher of ATM Marketplace and several other portals). He is also co-founder of the ATM Industry Association and currently serves on its board.