Shared ATM Network and ATM As a Service models expected to gain traction with community financial institutions during the second half of 2023

Self-directed commerce has become ubiquitous, and banking is no different; consumers want choices in how they engage, banking when, where and how they want. These rising expectations for self-service – along with community banks and credit unions looking to improve efficiencies and optimize margins – have created some notable trends to watch for the second half of the year, according to NCR Banking. For example:

More institutions will embrace a shared ATM network model for self-directed banking. Branch traffic continues to decline as customers and members treat the branch as more of a place to discuss high-value topics instead of a location for routine transactions. For simple transactions, however, consumers increasingly want the ability to self-serve at their own convenience. That is why more banks and credit unions are embracing a shared ATM network.

By plugging into an existing network with ATMs located in trusted retail locations such as grocery, convenience/fuel and big box stores, institutions can provide a way to withdraw cash when a branch isn’t nearby. Some are even starting to embrace machines that enable cash deposit capabilities, incorporating even more branch functionality into the places customers and members live and shop.

This provides a cost-effective, simpler alternative to building new branches in growth or legacy markets while still extending the institution’s presence out into the community. Plus, such an approach allows community and regional institutions to better match the scale and reach of even the largest bank brands.

The ATM support model is being reimagined with ATM as a Service. While ATM endpoints remain a crucial component of a successful customer and member service strategy, the traditional ATM deployment model – with its capital requirements, multiple vendor relationships, upgrade cycles and always-evolving experiences –makes it more challenging for institutions to quickly innovate and react to changing market forces. Support costs, aging technology and difficulties attracting and retaining talent add additional challenges.

These factors are prompting more financial institutions to outsource partial or complete management of ATM operations, from ownership to management, via an ATM as a Service model. This strategy allows banks and credit unions to boost efficiencies, since employee resources no longer have to be allocated toward ATM distribution, installation, maintenance and cash management. Instead, employee time can be focused on more strategic initiatives, like growth plans and strengthening customer and member relationships.

The ATM as a Service model also offers a more consistent cost structure and centralized security and compliance support. Plus, availability and uptime are optimized, and the right partner will help quickly introduce new features and functionality as innovations emerge. This can help community institutions match or exceed the experience offered at larger banks.

Interactive Teller Machines (ITMs) will enable greater automation in branches. Another strong way to optimize an institution’s physical footprint and reduce costs is to implement smarter branch technology. For example, a wide variety of tasks can be efficiently completed on ITMs. Transaction types can include cash withdrawals, transfers, check deposits, statement generation, balance inquiries, ID scan and more complex teller-assisted transactions, such as account openings and loan initiations.

ITM use cases are extensive. They can be deployed in locations where a larger physical footprint isn’t necessary or be leveraged to extend branch hours. According to Forrester’s ITM Sentiment Study conducted with NCR, since introducing ITMs, 41% of financial institutions have improved efficiency between 10-20%. And over half have seen a decrease in session wait times.

“As more consumers want options for self-directed banking, community banks and credit unions are challenged with how to make the most of their physical footprints while maintaining meaningful interactions,” said Don Layden, EVP, president, ATM, Network & Banking, NCR. “Those who embrace ecosystem trends such as shared ATM networks and ATM As a Service models and continue to invest in smart technology will be able to offer exceptional experiences while simultaneously operating more efficiently.”

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