Bank & Credit Union Business News: Six self-service trends to watch

This article was published in Bank Business News here and Credit Union Business news here.

By Joe Gallagher, Senior Vice President, Product, NCR Atleos

Consumers’ preference for self-service continues to explode, and banks have responded accordingly. With nearly three million ATMs across the globe, financial institutions are leveraging the self-service channel to extend their branch footprints, enhance functionality, improve the customer experience and ultimately expand financial access.

Properly prioritizing and investing in this channel will be critical for banks to grow and succeed. The following trends should be kept top of mind as financial institutions develop strategies and plans for the future of self-service banking.

Branches will evolve into customer relationship centers.

As routine transactions continue to shift to self-service, banks will increasingly prioritize making the branch environment a space conducive to strengthening customer relationships and effectively cross-selling relevant products and services. This will include changes in the interior design, such as more comfortable seating areas and the introduction of more gathering spots, like coffee bars. This ambience will encourage customers to stay longer and engage with employees, prompting more comprehensive financial discussions, such as around borrowing and investments.

Where an ATM is located will be as important as what it can do.

The physical location of ATMs will become more important in the coming years. A convenient location can help institutions compete for affluent customers in the developed world. For example, ATMs placed within locations consumers already live, work or shop are more likely to drive traffic and transactions.

Location of self-service devices is also critical to expanding financial inclusion. Incorporating ATMs into areas that lack physical branches can help the constituents of those communities access cash and other critical financial services.

ATM network management will become universally outsourced.  

As technology becomes increasingly complex, more banks will look to outsource partial or complete management of their ATM estates to proven service networks and/or ATM utility networks. This transfers the burden of maintenance, troubleshooting, compliance and hardware/software updates to a trusted partner, boosting efficiencies, saving time and reducing costs in the long run. Expect this outsource model to resemble utilities that provide standardized ACH, credit card processing and fraud prevention services.

The integration of payments and other open banking systems will become commonplace.

As globalization of payments persists, banks will have to adapt to remain relevant and compete. This will require interoperability technologies to facilitate the seamless exchange of data between diverse global payment systems. Such a feat will require collaboration; a single entity cannot accomplish it alone. Although these initiatives will require some time and effort on the front end, they will ultimately help bank increase efficiencies, expand service accessibility, ensure compliance and drive innovation.

Consumer choice will multiply.

Advancing technology will bring an influx of new self-service access options like cardless access, bridging the gap between digital and physical touchpoints to give customers more choices than ever before. With cardless cash, consumers can leverage their bank’s mobile banking app, a digital wallet or a one-time code to withdraw cash or conduct other transactions at participating AMTs – all without the presence of a physical debit card. If using a mobile app, the customer can pre-stage the transaction and pick it up later, saving significant time.

Features like this appeal to a broad range of customers, driving engagement and loyalty. Perhaps most importantly, they can also help broaden financial access, whether for smartphone-first tech enthusiasts, rideshare drives who get paid by the shift, charities that issue one-time codes to deliver cash to those in need or the under or unbanked.

AI becomes a transformative force.

AI has the potential to transform self-service in the coming years, making it even better for customers and more efficient for banks. For example, expect to see lifelike avatars replace in-person assistance with remarkable performance and accuracy from personalized financial advice to identity verification. In the coming years, we will see extremely sophisticated security measures based on behavioral analysis algorithms, which will help banks keep their organization and their customers safe and secure.

Even though some remain hesitant on AI, it’s imperative for leadership and staff to educate themselves about the technology and start to determine how it can fit into their strategy. Those who fail to do so risk being left behind.

The next decade in self-service will be marked by acceleration in branch transaction, the increased use of shared networks and utility outsourced models, cross-platform integration, flexibility and sophisticated technologies such as AI. Those banks that heed these trends and respond accordingly will be strongly positioned to optimize and future-proof their self-service banking channel, increasing efficiencies, fortifying the customer experience and establishing a sharp competitive advantage.