Mercator Blog

The ATM's Rising Importance as a Banking Channel and a Physical Point of Access to a Virtual Relationship
Date: November 16, 2017
Joseph Walent
Associate Director, Customer Interaction Advisory Service
The way that people bank has undergone profound changes throughout the history of the automated teller machine. The pace of change is accelerating and affecting the way banking business is done. ATM manufacturers have developed and integrated a steady stream of new capabilities that expand device usefulness. Devices that started as cash dispensers are now being used to deliver a wider range banking services.

One change occurring in the way banking customers interact with their financial institutions (FIs) and financial service providers is a result of consumers increasingly using their mobile devices to access banking services and perform transactions. Mercator Advisory Group’s CustomerMonitor Survey Series’ most recent banking channels survey, fielded in Q4 2016, shows that among the online consumer research panel of 3,000 U.S. adults, close to half had leveraged mobile-enabled channels in the previous 12 months. Making it to the bank during regular hours has become less necessary as customers increasingly rely on the ATM after hours for physical exchange, not just to withdraw cash but also to deposit checks and cash as well as to perform some activities previously limited to face-to-face engagement. Ready access to cash proved essential during the floods and hurricanes in the United States in late August and September of this year.

Online banks have a lower cost structure than traditional FIs thanks to their minimal infrastructure investment, but that can be a weakness for real-time engagement. Consumers drawn to virtual FIs will still need to rely on ATMs as a point of physical access to their money.

This leads us to a much broader view of where the ATM in all its iterations fits within the consumer engagement picture. The ATM is gaining stature as one of the avenues for customer interaction with the FI. Mercator Advisory Group regards it as central channel shaping how consumers will navigate an increasingly personalized banking experience in the years to come.

Mercator Advisory Group’s research report from the Customer Interaction Advisory Service, 2017 ATM Market Benchmark Report, presents benchmark statistics on the ATM market in the United States and globally.