The future of self-service banking

COVID-19 didn’t just change how people shop and socially interact—it also changed how people bank. Whether managing temporary branch closures or trying to socially distance or even just realizing how convenient it is, consumers are turning to self-service banking more than ever before.  

So, it’s no surprise that nearly two-thirds of financial institutions expect to increase their ATM usage over the next few years. Close to 50 percent said they planned to improve their ATM functionality and technology because of that increasing demand. Indeed, NCR research confirms up to 95 percent of routine branch banking transactions can be carried out at the ATM or ITM—helping reduce the cost of overhead, cut waiting times and improve customer satisfaction and loyalty. 

According to Retail Banking Research, there are more than 1 million branches and 3.1 million ATMs globally. More than 1.1 Million ATMs also can accept deposit transactions. That’s a lot of options. To differentiate your self-service experience, make sure your ATMs/ITMs offer greater transactions and ever more personalized interactions. It’s no longer enough for ATMs to dispense bills in various denominations. ATMs are also capable of providing cash recycling capabilities, deposits, transfers, bill payments, mobile pre-staging and even targeted marketing.

All of these self-service options mean what was once a simple cash-and-dash solution is now a critical connection point to your customers’ entire financial journey. And that’s an advantage for them. They can use self-service for more richer transactions on demand, like mentioned above, and even to get real-time teller assistance via two-way video at ITMs. This is creating new expectations for ATMs and ITMs to work both “in the branch” and “as the branch,” bridging digital and physical into one seamless experience.  

Related: BankPlus uses at home video tellers to keep customers connected during the pandemic 

Self-service banking also offers several advantages for the bank. By shifting to self-service models, your FI can save on labor, infrastructure and transaction costs associated with the branch. Indeed, ITMs can reduce the cost per transaction from $4 with an in-branch teller to $1 via self-service. 

Another big benefit? The ability to redirect costs and resource savings to core retail banking products. And by migrating more routine transactions to self-service, your employees can focus on delivering better service to customers who have more complex transactions or need guidance.  

Speaking of migrating routine transactions—studies show consumers increasingly prefer using self-service terminals for more of their banking because it saves them time. That means FIs need to set up their ATM channels to deliver the best on-demand experience wherever and however their customers show up. Doing this improves customer satisfaction, which leads to greater loyalty and better cross- and up-selling.

ATMs play a big role in a consumer’s daily life: an average 40 percent visit an ATM eight to 10 times a month. But it also plays a huge role in branch transformation. As recently as 2018, branch employees said they spent 60 percent of their time on low-value transaction, administration and idle time, according to the ABA. But by moving transactions from the branch teller line to the ATM, banks can enable their digital transformation to reduce their branch footprint, drive down costs, improve customer loyalty and boost efficiency. 

For example, deposit automation has become one of the fastest growing banking technologies, with over 50 percent of ATMs estimated to be deposit enabled by 2025. This offers the advanced functionality and convenience consumers want, while enabling FIs to reduce expenses while they retain and expand their consumer base.  

Capabilities like these that personalize and enrich the customer experience are at the center of the ATM transformation, which in turn enables self-service to underpin branch transformation. And as ATM software continues to evolve and align with the ATMIA next-gen framework, banks will facilitate more and more transactions and experiences at self-service, turning it from siloed device into connected access point for digital tools and other services. 

Related: Are your ATMs next-gen ready? Get the white paper to explore the next-gen architecture.

We know that self-service is evolving at the ATM, but tablet integration, cardless transactions, video tellers and mobile technology are at the top of the list for branches. That’s because, amid the pandemic, more and more consumers want to feel safe when they’re transacting. A few other use cases for investing in next-gen self-service include:  

• Customer insight. Self-service, from mobile banking to ATMs and ITMs, provides a wealth of data you can use to understand your customers’ behavior and better position your financial services and products to meet those needs and deepen customer loyalty. 
• Choice and flexibility. Customers want options and control over their experience. Self-service delivers the digital tools they need to interact on their terms. 
• The human touch—at a safe distance. Sometimes, people really appreciate the face-to-face interaction with a teller, especially for complex transactions or if they need personal guidance. Offering ways to maintain that connection, using two way video banking at ITMs, provides customers with the personal service they need, even if they can’t come in to your branch. 
• Expanding hours. By automating routine transactions, banks can re-deploy tellers to engage in more high value transactions while using self-service for extending banking hours. In fact, some FIs have seen an 88% increase in “branch” opening hours with ITMs, and some have seen 30% of deposits made outside of regular hours.

As you implement self-service banking you’ll want to pay close attention to the following questions.

• To what extent, do customers feel it is necessary to handle customer service activities in person?
• What value do customers place on having a banker they can contact for customer service activities?
• Are there certain customer service activities they are willing to handle digitally and others they will handle only in person?
• Would customers be willing to use self-service devices rather than representatives for customer service activities at branches?
• Could these self-service branch options be a gateway for other digital methods for customer service?

No matter how your financial institution moves forward, put the customer experience at the center of your self-service and bank branch transformation strategies. With the right banking self-service software, you can offer the richer, more personalized experiences your customers want on demand, while making your operations easier, more efficient and less costly.  

And with the ATM as a key asset in your transformation strategy, you can reduce your branch footprint, bridge your digital and physical channels and deliver a differentiating experience anywhere and anytime your customer wants to engage.