ATMs are an integral part of most financial institutions’ (FIs’) service portfolios, sparing customers from visiting bank branches for key services like cash withdrawals, checking account balances and a host of other services. Online and mobile banking have been growing steadily more popular for years, but digital channels cannot handle all tasks involving cash, thus securing ATMs’ place in customers’ financial lives. Studies show that the average ATM is used approximately 300 times each month, with some in 24-hour convenience stores experiencing up to 3,000 transactions in that same length of time. The pandemic is prompting uncertainty in the space, however, as cash use has plummeted and customers’ utilization of ATMs to make withdrawals has fluctuated dramatically over the past year. This shift has left FIs looking for new ways to innovate when it comes to ATMs, including Boston-based Santander Bank, N.A., which operates more than 2,000 ATMs.
Santander and other banks face myriad perennial obstacles when managing day-to-day ATM services, the first of which is where to place machines. Customers may not use ATMs set in inopportune locations, while those set in heavily-trafficked areas might see so many users that cash management trams cannot keep up with replenishing their stores. Each ATM can be expensive to manufacture, purchase and maintain, making proper placement a necessity. Cloud-based ATMs can be especially beneficial for smaller banks, but even large FIs are recognizing their advantages when it comes to ease of use, improved customer experience and the greater institutional knowledge that comes from working with dedicated industry experts. Cloud-based solutions also allow banks to focus more on large-scale digital transformation initiatives. Outsourcing ATM management enables in-house staff to devote their full energy to banking apps, online services and other programs. Care must be taken to ensure that ATM providers’ partnerships with banks line up with FIs’ digital-first goals to offer seamless experiences. Cloud-based solutions could go a long way toward advancing banks’ digital-first initiatives, but they must complement other services to work as one part of a cohesive whole. FIs that effectively implement such services stand to ease customer frustrations and foster loyalty while pursuing future innovation strategies.