A Winning Opportunity to Meet the Needs of Consumers, Financial Institutions

A Winning Opportunity to Meet the Needs of Consumers, Financial Institutions

In today’s COVID-19, branch transformation era, interactive teller machines offer a chance for financial institutions to provide access to cash and banking services

ATMs are a key way for consumers to obtain cash, and 71% use them as part of their banking activities. Now, new research reveals the potential for growth within the ATM space — consumers are increasingly interested in performing self-service banking activities at an ATM versus in-person at a bank, presenting an opportunity to reimagine this key industry mainstay as a technologically advanced, interactive teller machine. In August 2020, MetaBank, N.A. (Meta) surveyed more than 1,200 U.S. adults to examine their post-pandemic sentiments about ATM and cash usage. Then, Meta paired that with a pre-pandemic analysis of the ATM industry aggregated by Mastercard from a number of expert sources, including Federal Reserve System, ATM Industry Association, Bankers Equipment Service, RBR Global, Star Financial Services, Transaction Network Services, Wall Street Journal and more. The research identified three key, need-to-know trends for financial institutions and Independent ATM Deployers (IADs), including:

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  • Cash still has a place in consumers’ wallets, even in the COVID-19 era — what’s changed is how they want to access cash. The research confirmed that, despite rumors circulating that cash was dirty or spread the virus, the majority of consumers (55%) still accessed cash from March to June 2020. Further, many consumers’ (59%) positions on the use of cash has not been impacted, either. Thanks in part to stay-at-home and social distancing orders in many places nationwide, what’s changed is how consumers are accessing their cash. Consider this: 24% say they’re less likely to visit a bank branch due to the pandemic.
  • For ATMs, interactive teller machines are the future. More than two in five Americans (43%) are interested in completing banking activities like cashing checks, making deposits and withdrawals or video conferencing with a remote teller at an ATM instead of having to physically go into a bank branch. In fact, one in five Americans (19.4%) would strongly prefer completing these activities at an ATM instead of going into a bank. At the same time, thanks to the ongoing “branch transformation” trend, bank branches are shuttering at a record rate, as nearly 2,000 closed in 2018 — and this trend is expected to continue. The convergence of these two issues helps to underscore a need for conveniently located, self-service-focused ATMs.
  • All these factors present a key window of opportunity for financial institutions and IADs to reimagine their ATM fleets (and the way they work together). Managing a fleet of ATMs is very expensive, and few financial institutions are running their ATM businesses profitably. Those costs are likely to increase exponentially as the industry moves toward an interactive, self-service focus that allows consumers to perform tasks at ATMs that previously required the in-person presence of a teller. For financial institutions, branding agreements with IADs can offer a win-win scenario that allows them to service customers across a number of convenient locations, without the resources needed to operate their own growing fleet of ATMs. While financial institutions traditionally operate within the footprint of their branch locations, consumers who no longer have a bank branch near them still need access to cash — and, via an IAD partnership, a bank can still provide that access. Further, thanks to economies of scale, IADs are able to operate ATMs at a lower price point than financial institutions. 

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Financial institutions should take note — despite the COVID-19 era and the growing trend of bank closures, there’s an opportunity to reimagine ATM fleets in a way that responds to consumers’ needs while saving valuable time and resources.

 source: [i] [ii]

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Joel Mettler1 Posts

Joel Mettler is Vice President of Client Success at MetaBank, a federally chartered savings bank headquartered in Sioux Falls, South Dakota. Meta Financial Group, Inc.®, is the holding company for MetaBank and its divisions: Meta Payment Systems, its electronic payments division; AFS/IBEX, its insurance premium financing division; and Refund Advantage, EPS Financial and Specialty Consumer Services (SCS), its tax-related financial solutions divisions.

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