ATMs are the original digital banking innovation, and they’ve survived for decades by evolving with the times. Even in an increasingly cashless society, nearly a third of U.S. consumers visit an ATM at least once a week. But what consumers expect from their ATM experience is rapidly changing; they want hyper-personalization, more self-service options and an omni-channel experience. More importantly, they want to ensure their money and information remains safe.
As security challenges and an increasingly discerning public up the ante, what changes are ahead for ATMs?
Here are five big developments in the world of ATMs your credit union should be aware of:
1. Consumers Will Do Anything to Escape ATM fees
According to a recent Mercator survey, consumers are prioritizing surcharge-free ATMs more than ever. In fact 67% of those surveyed actively seek out a surcharge-free ATM. That’s a sharp rise for 57% in the previous year. This is good news for credit unions, especially those in CO-OP’s network of nearly 30,000 surcharge-free ATMs.
2. Cardless Cash is Becoming Increasingly Popular
With mobile technology changing the way we manage finances and bank online, it’s no surprise that consumers are increasingly taking out money without ever using a card. “Cardless ATMs” are a relatively new phenomenon (although it began back in 2012 in the U.K.) and several banks and financial institutions are starting to catch on. The benefits of cardless access to ATMs has two distinct benefits: it creates a faster, more efficient experience for the consumer and it also prevents cardskimming. Of course, fraud is still possible with cardless cash access, as mobile phones are susceptible to Malware and other attacks so thinking through the implementation (or finding the right partner) is critical. CO-OP will be unveiling some new innovations in this space soon. Stay tuned…
3. Card Skimming is on the Rise and there are some Innovative New Solutions to It
Speaking of ATM fraud, card skimming remains a big problem that costs U.S. consumers over a billion dollars a year. Thankfully, there is no shortage of new innovation focused on helping to curb or eliminate skimming altogether. Take for example, the “Skim Reaper” – a device invented by University of Florida professor Patrick Traynor and two graduate students that detects when the card reader of an ATM or other machine has been tampered with. While still in the early stages, it is encouraging to see new approaches to card and data theft, an area CO-OP and credit unions continue to take very seriously.
4. Jackpotting has Reach the U.S. and Already Poses a Serious Threat
The first cases of “jackpotting” i.e. when someone implants malware onto an ATM that allows them to dispense cash, began happening in the U.S. earlier this year. Jackpotting often targets multiple ATMs within a network and so financial losses can be substantial. Having the most up-to-date software and operating systems are a good start towards preventing jackpotting attacks.
5. Effective Self-Service Takes a Human Touch
ATMs are trailblazers in the world of self-service; but in the age of personalization, more is expected out of the self-service experience. As this article points out, humanizing your self-service kiosks from a user-experience/user interface position goes a long way to help creating a more personalized experience. Things like language preferences, more bill denominations and faster withdrawal are all small but meaningful steps you can begin to take.
ATMs will remain a critical function of your credit union and require the same level of innovation you put into other areas of your business.