ATM Industry Trends (and Forecasts)
The future of the ATM industry has been a topic of debate since the possibility of a cashless society appeared on the horizon. So far, that cashless society hasn’t materialized. The ATM market is expected to be worth over $21 million by 2020. And, 80% of consumers still use ATMs as the primary form of interaction with their bank.
So, ATM machines aren’t going anywhere. But, consumers are changing, and they expect more services and a better experience from ATMs. Now, ATMs are improving to meet customer demands for convenience and functionality.
Here are the most important ATM industry trends and forecasts that will take the ATM business into the future.
Updating ATM Machines Is Big Business
90% of ATM machines shipping globally are sent to replace existing ATMs. Older models are being replaced to meet younger users’ expectations of performance and convenience.
New ATMs provide contactless transactions, mobile pre-staging, and financial institution “branch-in-a-box” capabilities. These new ATMs can provide up to 90% of branch-based technology and services. Brighter displays, dynamic branding, video banking, and touchscreens will also become more common in modern ATM machines.
The new features are designed to cater to younger, digital-first generations who expect greater ease of use and digital capabilities from automated services.
Replacing older ATM installations to appeal to a younger user base means more opportunities for ATM owners to install ATMs in prime locations which already have an ATM. ATMs that target the younger generations also indicates that cash will remain king for a long time.
Cash Recycling Is On the Rise
Globally, more banks than ever accept automated deposits from ATM machines. And, an estimated 16% of the world’s ATMs are capable of cash recycling.
Cash recycling, combined with automated deposits, offers an excellent opportunity for ATM owners to reduce their ATM vaulting workload and costs, while providing ATM users with valuable functionality.
Ultimately, this means more potential daily uses, with less cash management.
ATM Personalization and Marketing
Modern ATM hardware offers more opportunities for ATM owners to use software to differentiate their ATM machines from the competition. ATM machines that connect to CRM systems can display personalized messages, and seasonal and location based marketing. This means more possibilities for revenue generating partnerships between businesses and ATM owners.
Improved ATM software also helps ATM machines meet consumer demands for a seamless transition between mobile and physical channels.
These improvements bring ATM machines closer to functioning as complete, automated bank branches.
Smart ATMs are Coming
2019 could see smart ATM machines become a mainstay in the ATM market. Smart ATMs can offer:
- Multi-currency cash dispensing.
- Loan repayment.
- Bill pay.
- Ticket dispensing.
- Account opening.
Not all smart ATMs are capable of providing all of these services. But, smart ATMs will give banks new incentives to work with third-party ATM owners. These partnerships would help banks reduce costs and offer more convenience to customers. And, more opportunities to provide ATM machines to financial institutions will be a boon for ATM owners.
But, smart ATMs won’t replace standard cash-dispensing ATMs. Cash-dispensing ATM machines are the best option for high-traffic and temporary ATM locations, where banking services are unnecessary.
New ATM Designs Will Open Up Opportunities for ATM Owners
Solar and wireless ATM machines are fairly uncommon, right now. But, these new designs enable ATM owners to place ATMs in previously inaccessible locations or provide a more reliable ATM solutions for remote and temporary ATMs.
Additionally, solar ATMs may offer ATM owners more pitch angles for persuading location owners to accept an ATM, since solar technology is popular with environmentally conscious customers.
ATM machines with larger screens will also become more popular as ATMs offer additional functionality.
Overall, ATM machines are getting better. And, they can provide more value to businesses. That means more business for ATM owners.
ATM Security Will Continue to Improve
EMV will continue to expand in the ATM industry. And, other security features, such as cardless ATM transactions, will become more common. Security features that add security and increase convenience will be in high demand, once the service has proven itself secure.
However, new security measures are not predicted to have any significant effect on current ATM models. The adoption of new security measures depends on consumer acceptance. Most ATM users know and trust the current batch of ATM security protocols. So, customer adoption of new security features will be slow.
Managed Services Is the Fastest Growing Segment of the ATM Market
The managed services segment of the ATM market is expected to grow 9.6% between 2015 and 2020. Businesses that have traditionally owned their own ATM machines are outsourcing their ATMs, and paying for ATMs as a managed service.
This is great news for independent ATM owners, because it means that there are more opportunities for ATM owners to partner with banks and provide off-site ATM locations.
Yes, there are alternatives to cash purchases and ATM machines. But, people still prefer cash for everyday, low-value purchases.
Although cashless options are valuable, financial institutions aren’t working toward a completely cashless society. The goal is to provide the best cash and cashless options. That way customers can access their accounts when and how they want. This means that ATM machines will remain a staple in the purchasing and banking cycles.
In fact, it’s most likely that ATMs will play a greater role in the future as ATMs adapt to provide a more seamless interface between the digital and physical economic spaces.