Although ATM machines will be part of the financial industry for a long time, they can’t stay the same forever. ATMs need to evolve to meet the demands and expectations of the modern consumer.
Whether we like it or not, ATM machines are in the category of “technology.” And, people expect technological devices to do more than ever. Essentially, that means that people will continue to expect more services from ATMs.
And that’s the whole reason smart ATMs were created in the first place. So, what is a smart ATM? What does it do? And—most importantly—how will these new ATMs affect you, as an ATM machine owner (or future ATM owner)?
What is a Smart ATM?
Smart ATM machines aren’t new. They’ve been around for a while. But, they’ve been fairly uncommon for many years, because there hasn’t been a huge demand for them. And, they demand more capable banking and ATM processing networks.
As such, smart ATM machines have been slow to take off because the supporting infrastructure and consumer demand was a bit behind the smart ATM technology.
A smart ATM is just an ATM machine that’s capable of doing more than dispensing cash. Banking customers can use one to deposit funds, open accounts, transfer money, and other things that can usually only be done at a bank branch.
Smart ATM machines that offer all these services are called “microbranches” or “branch-in-a-box.”
Now, not all smart ATM machines offer complete branch-in-a-box functionality. Some only offer an additional service or two beyond dispensing cash. But, it’s possible for ATM machines to provide almost all the services that a physical bank branch offers.
More powerful ATMs bring us one step closer to true 24-hour, self-service banking.
If you own a smart ATM machine, offering additional services increases your opportunities for transactions, since people have more reasons to use your machine. And, that’s always a good thing.
Smart ATM Technology
An ATM needs slightly more advanced technology to achieve all the functionality that smart ATM machines require. The hardware and user interface on traditional keypad ATMs isn’t quite enough to perform more in depth financial transactions.
So, smart ATM machines must be equipped with a few key capabilities to deliver microbranch capabilities.
Touchscreen ATMs can do a lot more than keypad ATM machines. And, the ubiquity of touchscreens on smartphones, tablets, and laptops means that customers are much more comfortable using a touchscreen ATM than in decades past.
A touchscreen also makes it possible to perform banking functions that require a signature, which is a requirement for true branch-in-a-box ATM service.
Cash recycling is a vital capability for smart ATM machines, since they enable users to make deposits.
In short, cash recycling is using deposited bills for dispensing cash for ATM withdrawals. It’s just common sense to do this if your ATM accepts deposits. However, there’s an additional benefit: the ATM owner doesn’t need to restock their ATM machine as often.
Intelligent deposit sounds fancy. However, intelligent deposit just means that customers can make cash or check deposits through an ATM.
ATMs that offer intelligent deposit usually make digital copies of checks. And, the ATM owner has no control over when the funds are available. That’s up to the bank.
All the additional services require that your ATM machines have solid connectivity with banks. If you run smart ATMs, that means that you need to choose your ATM processor carefully. There’s a lot more data transfer involved with bank-in-a-box functionality, and your ATM processor needs to support that connectivity.
How Smart ATMs Will Change the Banking Industry
Smart ATM machines aren’t going to cause some massive disruption. But, they’re creating a new channel for customers to access banking services.
A significant percentage of consumers already use ATM machines as their only method of interaction with their bank. And, better ATM machines will likely cause that number to increase, because there will be fewer and fewer services that are not offered through an ATM.
So, banks will want smart ATMs. These machines help them make more money (though, not necessarily through ATM fees). And, many banks will outsource their ATM services to avoid the upfront costs of purchasing new machines.
This presents new opportunities for third parties—ATM machine owners—to provide the software and infrastructure to support services through this expanding channel. At the end of the day, more capable ATM machines mean a larger, more profitable ATM industry, and more potential for ATM owners.
Do You Need a Smart ATM?
We’re all about owning ATM machines here. So, the important question to answer here is whether or not smart ATMs are a good idea for ATM business owners.
First, you don’t need to start transitioning to smart ATM machines or start with one as your first machine. Cash dispensing ATM machines will make plenty of money for ATM machine owners for decades to come.
However, smart ATM machines offer a lot of banking functionality that makes them attractive to banks. If you want to partner with banks to provide branded off-site ATM machines, being able to provide more banking services through your ATM makes your offer more attractive to the bank.
So, the viability of smart ATMs in your business depends on where you want to place your ATM machines. Most traditional locations don’t have a huge demand for branch-in-a-box services.
In the long-term, it may be wise to buy ATM machines with the core capabilities of a microbranch ATM, like touchscreens and cash recycling. But, there’s no hurry.
If you’re a new ATM business owner or looking to expand your fleet of ATMs, you can safely continue to use cash dispensing ATM machines.