The following article originally published on BAI Banking Strategies here.

By Stuart Mackinnon, Chief Operating Officer, NCR Atleos

Financial institutions might turn to ATM-as-a-Service or ITM-as-a-Service to meet consumers where they transact yet maintain greater flexibility and cost control.

Today’s consumers are driven by convenience and flexibility, transitioning often between digital and cash-based transaction forms.

In fact, according to a survey conducted by Forbes Advisor, 42% of respondents still value the ability to make cash transactions. Consumers also expect the freedom to complete transactions when, where, and how it suits them. To meet these needs, banks around the world continue to value self-service solutions that extend their reach, optimize operations and improve customer service.

ATMs and interactive teller machines (ITMs) are key in bridging the gap between digital and physical banking, providing consumers with convenient access to cash and digital transactions, even in areas where bank branches are few and far between. More and more banks are turning to an ATM-as-a-Service (ATMaaS) and/or ITM-as-a-Service (ITMaaS) model, where maintenance and management are outsourced to trusted partners.

This approach allows banks to offload the complexities of managing ATM hardware, software, security, installation, maintenance, cash management and processing. In return, banks gain a more efficient and reliable self-service channel, enabling them to more quickly offer new features and functionality while freeing up staff for more meaningful, customer-focused activities.

As pressure to improve efficiency increases, financial institutions have begun transforming their branch operations, leaning into a focus on advisory services while reducing traditional teller services. Migrating common teller-based services to self-service devices in and around the branch are critical to achieving this transformation, while maintaining convenient and secure access.

Another effective way banks can maintain and expand access to financial services is by participating in a utility ATM network model, which involves partnering with a network provider whose ATMs are located within trusted retail locations (such as grocery, convenience/fuel and pharmacy), allowing customers to complete daily banking activities where they live and shop. This model offers a convenient, secure way for customers to access their finances regardless of their proximity to a branch. This eliminates the need for financial institutions to expand capital, enabling them to extend their presence out in the community and better match the scale and reach of larger players. Retailers benefit from this partnership through increased visits to their locations.

As more digital form factors gain traction in the market, cardless access to self-service devices is becoming a mainstream requirement. Through integration with digital banking applications and mobile wallets, access to cash can be enabled without requiring traditional distribution of physical cards. This enables the capability to dynamically offer immediate cash access to participants, a solution that is important to daily wage and gig economy workers.

In this evolving landscape, it would be a mistake to assume that digital savvy customers lack any interest in cash or having the option to engage with convenient physical touchpoints. In reality, they expect the optionality and demand that their physical interactions are seamless and digitally optimized. The future of banking lies in balancing physical and digital touchpoints, ensuring that both traditional and modern payment methods coexist to meet the diverse needs of today’s consumers.

Stuart Mackinnon is Chief Operating Officer for NCR Atleos.