Banks should always be looking forward. An openness to technology-driven growth and modernization can be the key to unlocking everything from more efficient business processes to a better customer experience.
In the financial services industry today, innovation can take many forms. One concept we can expect to become increasingly common is contactless withdrawal from ATMs.
Developments in technology have made it possible for people to use ATMs without physically entering their card into the machine. NFC-enabled cards facilitate contactless withdrawals in much the same way as contactless payments, with the customer simply having to tap their card at the ATM.
Then there is the option of accessing the ATM via smartphone, something that Barclays introduced in the UK last year. With this technology, customers just need their phone and the right app to take cash out.
As customers become more and more reliant on their mobile phones and demand greater convenience from their banks, this sort of instant access to cash and the other services available from ATMs will be a key focus.
A developing technology
Contactless withdrawal from ATMs is not a brand new technology, but it is one that is starting to gain serious traction across the industry. In a webinar exploring how ATMs can keep up with the growth of contactless at point-of-sale, Paola Araco, product manager at NCR, noted that there have been implementations of this technology in the ATM channel for the past few years. However, it is only recently that it has started to generate “huge interest” all over the world.
Speaking to Banking.com, Ron Delnevo, executive director for Europe at the ATM Industry Association (ATMIA), said he was somewhat surprised that it has taken this long for contactless or cardless withdrawal in particular to start to gain serious attention from banks. He pointed out that it has been available as an emergency measure for a number of years, with customers whose card is lost or stolen able to get a one-off code from their bank to use an ATM. However, it is only recently that this concept has started to make a real impact in the ATM channel.
One key advantage of contactless withdrawal that will be equally appealing to banks and customers is the potential elimination of certain security threats. Card trapping and skimming, for example, will no longer pose a risk if there is no need for the customer to physically enter a card into the machine.
Mr Delnevo pointed out that the advantages of such ATMs aren’t restricted to domestic markets.
“There are all sorts of innovations taking place at ATMs, where it would be very helpful to go cardless. As an example, money transfer through ATMs is soon going to become a really hot topic,” he said.
“Instead of going into a retail establishment and doing a money transfer using one of the money transfer services, you’ll simply be able to go to an ATM and make a money transfer and then somebody in another country will be able to collect that money from an ATM. And how much more convenient for them [the recipient] to operate on a code basis, with a one-off code, rather than actually having to have a card they use at the ATM.”
Mr Delnevo said there is “massive potential” in contactless technology at ATMs, adding that ATMIA sees it as a “very positive development” for the industry. He also disagreed with the idea that growth in card payments could spell the end of ATMs, arguing that it’s even possible that the ATM channel will outlive cards.
Keep up or get left behind
Contactless withdrawal is just one example of the technological development and innovation taking place not just in the self-service channel, but across the retail banking sector as a whole.
It’s indicative of the fact that, for banks, relying on traditional processes and familiar technologies isn’t enough. Modern-day consumers expect services to continuously evolve and improve to cater to their needs.
Big investments will always come with questions about what sort of return the business will receive. But if you are tuned in to what your customers want and where the industry is heading – and have taken the necessary steps to get your investment right – making a bold move could be the best strategy for your business and its customers.