May 15, 2024

How Interactive Teller Machines Can Be a Boon for Your Business

Start writing here...1967 was a transformative year for the banking industry. With the introduction of the automated teller machine (ATM), customers had the ability to withdraw cash like never before, creating a new level of convenience, access and freedom. No longer boxed in by when their branch opened and closed for business, people could withdraw cash from their checking and savings accounts around the clock, with many not having to visit a physical branch to do so. The ATM was a game changer for banks as well by enabling tellers to multitask and take care of other, more personalized service needs that are important to the bank and its goals.

With the technology and capabilities of ATMs improving as fast as they did, it's little wonder why ATMs surged in popularity, with thousands being installed worldwide shortly after their initial release. Today, there are over 3 million globally, making it a multi-billion dollar industry.

More than 50 years later, some believe that interactive teller machines have the potential to be every bit as transformative for banks and other retail establishments — if not more so.

There are many reasons why, but first, here's a brief synopsis of what the interactive teller machine is all about and what makes it a smart investment. 

What is an interactive teller machine?

More commonly referred to as an ITM, an interactive teller machine is an optimized ATM; it performs many of the same functions as an ATM but more of them and in multiple environments. Some of the overlapping capabilities include cash withdrawal, cash deposit, account inquiry, fund transfer and check deposit. What it does that most ATMs do not include certificate of deposit renewal, debit card replacement, business account access and money order issuance.

How are ITMs different from ATMs?

Having more capabilities isn't the only way in which ITMs are unique. Its most distinguishing characteristic is its interactive teller functionality. The ability to speak with a live teller through video conferencing enables customers to receive more personalized service to complete the more involved transactions that a traditional ATM (e.g. debit card replacement, CD renewal, money orders, etc.) doesn't provide.

ITMs also feature core integration, which isn't always the case with ATMs. Core integration refers to the process of integrating different systems and applications with an organization's existing network of systems, such as mobile banking, internet banking, ATM, software applications and databases. This allows the ITM to work more seamlessly and to share data with other systems that are on the network.

How are ITMs different from ATMs?

Having more capabilities isn't the only way in which ITMs are unique. Its most distinguishing characteristic is its interactive teller functionality. The ability to speak with a live teller through video conferencing enables customers to receive more personalized service to complete the more involved transactions that a traditional ATM (e.g. debit card replacement, CD renewal, money orders, etc.) doesn't provide.

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ITMs also feature core integration, which isn't always the case with ATMs. Core integration refers to the process of integrating different systems and applications with an organization's existing network of systems, such as mobile banking, internet banking, ATM, software applications and databases. This allows the ITM to work more seamlessly and to share data with other systems that are on the network.

Are ITMs a new phenomenon?

Yes and no. Unlike ATMs, which were rolled out shortly after their invention, ITMs as a technology have been around for several years now. But what has enabled them to gain added visibility and awareness is the pandemic. During the COVID lockdown, scores of financial institutions (FIs) dramatically reduced their operating hours or closed their lobbies entirely, leaving them with only drive-up as a customer service channel. This created unusually long wait times for customers in need of personalized bank services.

Banks that had invested in the technology were in a strong position to ride out the shutdowns. Having a video teller allowed customers to take care of a variety of banking needs and typical teller transactions. Additionally, interactive teller machines are designed to be installed in a location that allows for 24/7 access, such as vestibules, drive-ups, retail settings or isolated service locations. Most importantly, ITMs served as an alternative banking channel aside from mobile device and the drive-up teller line.

ITM adoption ramped up even in the early stages of COVID-19. In April 2020, for example, ITM usage rose 31% compared to the previous year, according to the NCR Corporation.

Usage continues to grow. Juliet D'Ambrosio, managing director for strategy for brand experience firm Adrenaline, told ATM Marketplace in an email that approximately 25% of all financial institutions in the U.S. have an ITM. That figure is expected to rise, though, as 60% intend to deploy one or more within the next three years.

"Furthermore, those banks and credit unions that DO currently have ITMs deployed plan to significantly increase the number of ITMs across their network," D'Ambrosio added. She also said she expected 81% of FIs that have an ITM plan for a full network implementation.

What makes ITM better than ATMs?

They do more

From a standpoint of sheer functionality, ITMs are in a class all their own. As previously noted, they are able to conduct many more transactions than the typical ATM, including advanced ATMs. Even though they do have live video tellers, ITMs can manage many traditional teller transactions but don't actually require the teller, making it that much more convenient for the user that enjoys self-service technology.

Can reduce operating costs

Remote banking has arguably been as game changing as ATMs. Many tasks that don't require cash can be done through a smartphone, tablet or computer, which has led to fewer visits to branches and the closure of some locations.

In lieu of full-service branches, ITMs can take their place because they're capable of performing a majority of the transactions that would normally be done at a physical branch. In fact, ITMs in terms of operational expenses, building, deploying and maintaining an ITM is 1/8th the cost of a full-function credit union or branch, The Financial Brand reported.

Can enhance customer loyalty

Cross-selling is a strategy that retailers use to increase revenue by selling additional products than their primary item. This approach is also important for banks as well because more service options — or technologies designed to improve banking quality — increases the likelihood that a customer will remain loyal to that bank. According to automation firm ARCA, a customer that uses one account or product with a bank remains with that bank for an average of one and a half years before switching. But the more offerings a bank has, the more likely customers are to stay with that financial institution. For example, the bank-to-customer relationship averages nearly seven years when a bank offers at least three products (e.g. checking accounts, ATM, debit, savings, etc.).

The ITM has the potential to be as big, if not bigger, than the ATM. But it needs the right network to deliver for your bank. Ventus' Managed Network-as-a-Service for ITMs can provide your branch with the reliability, security and PCI-compliant connectivity that can take your bank to the next level. Contact us today to learn more about our experience and why more companies choose Ventus for their networking needs.