The ATM from one era to another

Since the introduction of the first cash dispenser machine by Barclays Bank in 1967, ATMs have become the most utilised customer touch point in retail banking. New customer channels, the internet and mobile phones may have considerably broadened the scope and reduced the costs of customer interaction for banks, but due to the evolution of the ATM it remains a dominant point of contact moving from being a cash dispensing machine to a wide service provider.

The last ten years have seen a number of changes to the ATM channel including a new operating system and the introduction of EMV smart cards. Both of which have had a significant impact on the ATM environment.

The migration to Windows meant a move from a proprietary to an open standards environment. This gave banks greater flexibility and the benefit of a more competitive suppliers market. Enhanced functionality like Intelligent Deposit, cash recycling, more advanced application software supporting sophisticated graphics, imagery and sound have made the ATM experience a far richer one for the customer. However this has increased the risk of ATMs to fail and requires the banks to consistently maintain and test the ATMs to ensure maximum uptime.

EMV adoption has also had a major impact on ATMs. Since the standard’s introduction in the UK in 2004, EMV caused card fraud to decline by 25% within the first two years. However, this benefit has come at a cost as EMV Chip and PIN cards are complex. As a result, ATMs have had to evolve significantly to account for this new technology while like the migration to Windows, the banks have had to prevent against the heightened risk of failure of the ATMs and must test them regularly.

Highly public ATM crashes can negatively impact brand reputation and customer loyalty, consequently ensuring ATM uptime has become a key focus for banks. Manual testing for EMV-based transactions is now untenable as it would be far too time consuming, therefore banks are increasingly migrating toward automated testing which is a lot more time and cost efficient.

The last decade has been full of interesting and challenging changes for the ATM channel. To fully take advantage of the ATM channel, banks must put in place measures to automate the ongoing testing and monitoring of their networks. This will enable banks to benefit from a tangible return of investment, as automated procedures are more time and cost-effective than a manual approach
The ATM has come a long way in the last 40 years and the self-service channel is increasingly critical for banks looking to reduce costs and drive customer service.

The most forward thinking banks appreciate that to fully exploit the potential of their ATM networks they need to take a lifecycle approach to functional development, testing and deployment to serve their customers and future proof the technology to stay ahead of the competition. In order to do this, they must ensure that they have the expertise, resources and technology at their fingertips. With solid processes in place, banks will be in the best position to fully realise the potential of the ATM channel.