Utilising the ATM to enhance customer experience

By Boris Demin, VP & Managing Director, Americas at Compass Plus

By Boris Demin | 18 February 2019

Non-cash transactions grew by 10.1% globally 2015-2016, according to the 2018 World Payments Report. In the US, the growth rate reported was much lower than the majority of markets - at just 5.7% - however, in terms of the number of non-cash transactions, it dominated with 148.5 billion non-cash transactions made. Despite the sheer volume of cashless transactions, cash remains the most frequently used payment method in the US, representing roughly 31% of consumer transactions.

Housing approximately 16% of the world’s ATMs, the US has the second largest installed base of ATMs globally. According to Retail Banking Research (RBR), each of these ATMs averages over 1,000 cash withdrawals per month, and more than 10 billion transactions are performed via them every year. However, these self-service banking channels are often under-utilised and just thought of as ‘cash machines’, despite the fact that they have come a long way from the purpose they were originally invented for. Today, financial institutions (FIs) are equipping them with much more functionality, making them more than capable of supporting a range of transactions beyond simple cash withdrawals. 

While their functionality varies significantly, ATMs are increasingly being used to offer consumers more than the common banking transactions they’ve come to expect – balance enquiries, printed statements, etc. – and as the only touchpoint with competitors’ customers, FIs are utilising ATMs to not only showcase the value they can add to new customers, but to enhance customer experience.

Bridging the gap between physical and digital

Two-thirds of Americans use internet and mobile banking as their primary banking channels, with just 18% preferring branch banking, according to the American Bankers Association (ABA). These stats highlight the need for FIs in the US to seek new ways of bridging the gap between the physical and digital – the ATM is enabling them to do this. Some FIs are replicating the mobile banking app interface on the ATM screen to ensure their customers have a consistent user experience across all channels. While others are opening peopleless branches filled with ATMs that allow them to make deposits, as well as schedule appointments and view product offers to enable them to get better value from the branch.

Convenience is king

With mobile wallet and mobile banking usage increasing, some FIs in the US have introduced ATMs that are accessible without using a card. These cardless ATMs can offer quick contactless tap-and-go transactions or enable transactions whereby consumers start an ATM transaction on their smartphone, for example, enabling the consumer to ‘pre-stage’ the transaction and collect the cash from any of their bank’s ATMs within 24 hours. In a bid to make ATMs more convenient for consumers, another feature some FIs have implemented to enable cardless transactions, is allowing its customers to request an ATM code via their mobile banking app to give them access to their accounts at any of the banks’ ATMs, without their debit card.

Reaching the unbanked

Last year in the US, Mastercard launched a cash-by-code service called ‘Cash pick-up’ that allows both individuals and companies to send money to a recipient via an ATM. The service works as follows: the sender sets up a cash pick-up order; the issuing bank funds a virtual card, an SMS is sent to the recipient with the order number, PIN and directions to the nearest ATM, the recipient puts the codes into the ATM and receives the cash. With recipients not needing to have a bank account or debit card to receive the money, the service is a way of reaching the unbanked – a portion of society typically hard to reach for FIs.

Value-added services

In addition to the more innovative banking and cash-based services FIs are offering via ATMs, many FIs are also beginning to offer non-banking transactions via the machines: the ability to make donations to the American Red Cross during relief efforts for hurricanes, wildfires, floods and other disasters, as well as local non-profit charities, for example, or enabling customers to buy stamps via them. In some major cities, such as Las Vegas, there are even ‘Gold-to-go’ ATMs that allow consumers to purchase bars of gold at them. Integrating other functions outside of financial services that add value and bring convenience to consumers is a good way of potentially bringing in new revenue streams for FIs.

While it is often underused by both FIs and consumers, the ATM provides so many opportunities for adding value to consumers and increasing an FI’s bottom line, and with consumers demanding more convenience from their FI, utilising the ATM is a no-brainer for any financial institutions. The newer innovations, such as the introduction of cardless ATMs, are certainly a step in the right direction for enhancing customer experience, however, there is a world of possibilities that ATMs have to offer.

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