Nov 02, 2022

3 Self-Service Banking Trends Poised to Proliferate

Prior to the pandemic, digital transformation among financial institutions was moving at a steady pace. Fast forward to today, that quick clip has turned into a mad-dash. For instance, in 2019, only 17 percent of banks had begun their digital transformation journey, according to polling conducted by Cornerstone Advisors. That rate has since changed to 41 percent who either have or soon will (14 percent in 2020, 27 percent in 2021).

Much of financial institutions' focus in this regard is on expanding — or introducing — more self-service technologies. From interactive teller machines at drive-thrus to advanced ITMs or ATMs strategically located in vestibules, several of these enhanced capabilities brought some sense of normality and flow when COVID-19 upended society. With banking customers more reliant on self-service banking, financial institutions are doubling down on the equipment that makes automation possible.

The following are a few of the self-service banking trends that were discussed at the Ventus' Cash in the USA event held in Chicago on October 18th and are expected to gain further traction.

1. Cash recycling ATMs

A staple in most financial institutions, ATMs are as popular today as they were when they were first introduced. So much so that approximately 47 percent of financial institutions globally have between 1 and 500 ATMs and 36 percent have 501 to 2,000, according to polling conducted by ATM Marketplace.

Increasingly, ATMs also have cash recycling capabilities, which in addition to dispensing bank notes, validate, authenticate and accept them, and in multiple denominations. This makes cash management and storage that much easier for employees and incentivizes consumers to make cash deposits.

According to estimates from strategic research and consulting firm RBR, the forecasted growth of cash recycling ATMs is poised to jump 133 percent among North America-based financial institutions between 2019 and 2024. It's even higher than that in Latin America (248 percent).

Since cash recycling ATMs don't need to be replenished with banknotes as frequently as traditional ATMs, they're also ideal for other businesses in which people congregate and carry cash, such as casinos, shopping centers, train stations, and retail. It is this remote deployment of cash recycling ATMs that benefit from a managed network solution maintaining a dedicated secure private network separate from the remote location's network to maximize uptime and provide access for remote management.

2. Interactive teller machines

ITMs boast just about all the bells and whistles as ATMs, but are more versatile and cost-efficient. ITMs are "branches in a box" because of the additional functionality and their ability to provide video-based tellers. Thus, many of the financial transactions that a customer can do speaking to a teller in a face-to-face setting they can do with an ITM, including cash checks, pay bills, examine their balances (savings or checking account) and transfer funds. Plus, ITMs can be positioned in outdoor environments and vestibule areas, so they're available at all hours of the day or night regardless of what time banks close.

Juliet D'Ambrosio, managing director of strategy for the research firm Adrenaline, told The Financial Brand that ITMs are without question the future of banking because of their convenience, cost-efficiency and simplicity.

"For financial institutions, the benefits are clear," D'Ambrosio explained. "This self-service technology serves as a bridge between the physical and digital, improving customer experience and increasing revenue per customer. It can serve dual purposes — automating routine banking activity while providing access to bankers for higher-value consultations."

Since ITMs are capable of performing 95 percent of all transactions typically done by in-person tellers, financial institutions wind up saving more money on a per-transaction basis.

ITMs proved to be a lifeline during the height of the COVID-19 pandemic for those financial institutions that had them in place, in part because they're highly secure and don't require ongoing management Currently, about 25 percent of FIs operate at least one ITM. Over the next three years, however, 60 percent of banks plan to add an ITM to their existing networks, The Financial Brand reported from Adrenaline research.

How well they performed during the pandemic has likely contributed to planned ITM adoption among financial institutions. Matt Lilya, VP of Business Development at Ventus added, “Branch ITM network isolation has been successful in providing business continuity and limiting the scope of PCI compliance within the branch.” The desire for customers to maintain the level of support they received in the branch prior to the pandemic is being maintained from a safe distance. Some of the most successful deployments of ITMs have been with drive-thru locations. Efficiently moving up to 75 percent of customers out of the branch to efficient drive-thru ITMs and new ITM branches.

3. Cardless and contactless technologies

Contactless capabilities are the height of convenience and simplicity. Traditionally, cards serve as users' "ticket" to entry (at bank vestibules) ATM access and user identification. While cards may still be widely used, contactless capabilities found in smartphones or passports have made swiping passe'.

Plus, with Americans paying more attention to the things that they touch — a product of the highly contagious coronavirus — contactless and cardless technologies serve as a safer, more hygienic way for account holders to take care of their basic banking needs. ATMs, ITMs, cash recyclers, and more all have contactless or cardless capabilities. Perhaps unsurprisingly, during the pandemic, card-free transactions at Bank of America rose 25 percent over a six-month period (March to September), according to U.S. News & World Report.

As ATM Marketplace reported from its polling data, approximately 38 percent of FI respondents said they already had equipment or services that leveraged cardless or contactless (36 percent) technology. For those that don't, more than 40 percent (43 percent for cardless, 45 percent for contactless) plan to invest in these solutions within the next few years.

Whether you intend to roll out one of these technologies in 2022 or all three, a managed network solution can make it possible. Ventus is your go-to source for managed connectivity. For ITMs, ATMs, and branches. Ventus can help you improve your operations and maintain your customer experience expectations as these new technologies develop. Contact us today to learn more about managed network-as-a-service solutions and our other offerings.