Published : 11 months ago, on 26/10/2023

The future of ATMs: Embracing new management models & agile tech architectures 

By Mark Aldred, banking tech expert at Auriga

“From a mere cash dispensing machine, ATMs have evolved into critical self-service financial channels, offering a multitude of services including deposits. However, as the landscape of banking shifts towards a more digital, customer-centric model, the architecture and software powering these machines need to be re-evaluated to provide customers with a more engaging, omnichannel digital experience.

Bridging the Digital Gap 

Banks and financial institutions are now leveraging self-service channels to both manage operational costs and provide an enhanced, omnichannel digital experience for their customers. By marrying the physical with the digital, they aim to provide a seamless transition for customers across various touchpoints. However, achieving this requires a focus on both software solutions and the underlying architecture.

Software plays a pivotal role in optimising these channels. Advanced functionalities, from simple transfers and deposits to more innovative services, such as cardless withdrawals, necessitate robust software solutions. As customer expectations shift and new digital avenues emerge, it is essential for banks to have software that can quickly adapt. An advanced software solution should also proactively identify potential operational hiccups, ensuring smooth service delivery.

Yet, software alone isn’t the answer. The underlying architecture that these software solutions run on is just as crucial. A modern ATM architecture no longer operates on monolithic structures but adopts a layered approach, structured into an integrated ATM solution. This connects more effectively with external entities like other channels or transaction processing layers.

An upgraded architecture is no longer a luxury but a necessity. By accommodating a wide array of digital channels, innovative technologies, and even advanced hardware devices, an enhanced architecture can set the foundation for the future of banking.  It also empowers banks to offer uninterrupted services, and adapt to the evolving needs and preferences of customers.

To optimise ATMs, banks require a rethink of how their evolution is managed to become the future channel for access to cash and wider services in our communities.

ATM as a Service (ATMaaS): The New Frontier 

A significant evolution in the ATM landscape is the advent of ATM as a Service (ATMaaS). This innovative model is fundamentally changing how banks view and manage their ATMs.

ATMaaS can best be described as an end-to-end outsourcing solution for ATMs. Rather than dealing with the complexities of owning, operating, and maintaining ATMs, financial institutions can hand over these responsibilities to specialised third-party providers. In return, banks get the assurance of high-performing ATMs without the associated operational headaches.

Additionally, outsourcing to specialists means reduced costs in terms of procurement, maintenance, security and software upgrades, quickly adapting to changing market demands and technological advancements. This way banks can focus on core banking functions. The result is a leaner operational model, reduced overheads, and increased efficiency.

Flexibility is Key 

The future is unpredictable, and banks need to be agile. With a plethora of hardware vendors in the market, an upgraded architecture should have the flexibility to run on any vendor’s hardware. This truly hardware-agnostic approach is vital for banks to leverage their existing infrastructure investments while also having the freedom to integrate emerging technologies.

The significance of having ATM software and infrastructure that seamlessly aligns with current and future needs cannot be overstated in the banking industry. Furthermore, ATM pooling initiatives present opportunities for collaboration among financial institutions to optimise ATM networks, minimise costs, and improve service availability and accessibility. By sharing resources and utilising shared or outsourced services, banks can maintain widespread cash services in a more efficient and cost-effective manner. ATM pooling also opens doors to explore innovative service offerings, such as interactions via mobile devices and expanded bill payment functionalities, which can enhance customer satisfaction and loyalty.

Alongside innovative strategies for future bank branches and ATM pooling, the adoption of next-generation ATM technology is pivotal in driving customer engagement, increasing usage, and reducing the cost per transaction associated with maintaining self-service and branch channels in our communities.

Additionally, banks can also re-imagine digital self-service branch technology. By integrating advanced self-service terminals with supplementary services and combining them with assisted and remote banking options through video, co-browsing and conversational AI, banks can provide create a whole new channel and an advanced customer experience. This kind of transformation turns a bank branch into a low cost, high function local hub for financial services and other offerings.

The Path Forward 

As customer expectations soar, banks must innovate to remain at the forefront. Strategies such as ATM pooling offer opportunities for collaboration, cost savings, and service enhancement.

The future of banking lies in leveraging technology and imaginative strategies to not only meet but exceed customer expectations. Embracing models like ATM Pooling, ATMaaS, Branches for the Future and software solutions specifically designed for ATM network management, as well as a software architecture that supports the rapid deployment of new features and functions is not just beneficial—it’s imperative for institutions aiming to remain competitive and relevant in the digital age.”