The ATM Domination: Milestones And Future Trends

The sixties was a decade that was compromised of many culturally progressive events. It was an era full of social trends, political empowerment and technological advancements, particularly in the financial industry. It was in 1862 when the birth of the Automatic Teller Machine, better known as the ATM, took place in New York. It was Luther George Simjian who first attempted to create the hole-in-the-wall machine that would allow self-service for customers. A few years later, in 1966, James Goodfellow of Great Britain, made a similar patent, only this time added the personal identification number (PIN).

A few years later, Sweden caught on to the rising trend and made their mark by introducing an optical device that read a serial number encoded on a plastic card. Later into the 90’s, the ATM came full circle and it was back in the United States, where we witnessed the first installation of independent (not owned by banks) ATMs.

Here we are in 2013 and it would be hard to imagine a world, or even any commercial street for that matter, that wasn’t saturated with an ATM every five steps. The beginning developments of the ATM almost seem gradual and stagnant in comparison to its growth in the last five years.

ATMIA, the ATM Industry Association, recently released a trend report that observed and predicted the trends of the ATM. The major participants of this survey included stakeholders such as Financial Institutes (FIs), Independent ATM Deployers (IADs) and manufacturers. When these respondents were asked in the 2009 survey if they thought outsourcing ATMs to IAD was important, most FIs responded saying some would practice this, while the IADs believed it would be a huge trend. However since then there have been many increasing new requirements, regulations and shrinking margins in finance. Due to these changes, the 2012 poll forecasted that many IADs will be left to consolidate and the small deployers who offer unique service will be the ones to keep competitive advantage in the market.

One impact that all responding segments did agree on was the significant influence that mobile technology will have on the ATM industry in the next five years. Interestingly, the manufacturers revealed they believed cash recycling would be the most important influence. In 2009, the poll read that the ability to improve technology and equipment to protect customer’s PINs would be crucial. However, only five years later this option came at the bottom of the 2012 poll, replaced with mobile technology at the top.

As far as predicted trends, in 2009 it was unanimous conviction that integrating mobile technology and marketing with self-service channels would be a popular trend, which also took the top spot in the 2012 poll. The banking industry is commendable for staying focused on the mobile technology market, but more importantly for keeping attuned to the notion that ATMs are still a crucial and lucrative channel to penetrate.

The domination of the robotic cashier, an old term the British used to call the ATM, continues to grow each year. In 2009, Retail Banking Research’s “Global ATM Market and Forecasts to 2013” research forecasted there would be 2.5 million ATM installations around the world. The number currently stands at 2.3, so it seems they were pretty accurate. Their 2013 prediction is a 3.4M installment plan by 2017. Do you think it will happen? Let us know in the comments below.