Banking is one of the oldest trades in the world. So old in fact that historians predict the first instance of money exchange dates back to 12500 B.C. Besides being one of the oldest industries, banking has also been one of the most transformative, with some of the most notable changes happening within the last decade (think mobile and online banking, AI, Big Data and IoT). But there’s one major player driving many of today’s banking trends—it’s not new, and it’s not sexy, but it’s about to get a facelift: ATMs.
That’s right. I said it. Those massive machines that have been around for nearly half a century are making a comeback because they have the ability to capitalize on these banking trends and leverage transactional insights in ways that can completely transform the industry.
Did you know that there are currently over three million ATMs operating worldwide? Over the last 50 years, ATMs have exploded internationally as a way to quickly withdraw and transfer funds, and check balances. For Millennials in particular, ATMs are a preferred banking method because they’re quick, convenient, and allow for self-service. And for banks, ATMs help optimize operational performance by offering services in remote locations and reducing the need for brick-and-mortars with low foot traffic.
While ATMs have proven success rates with customers and banks alike, they also generate an enormous amount of customer data that, if connected to the IoT and properly analyzed, can offer unprecedented insight to financial institutions.
Let me give you some examples:
· Marketing. Transaction data through ATMs can help banks better assess how to market to customers. Take for example your latest trip. Did you use an ATM while on location? If you prove to be an avid traveler, banks can use this data to market services geared toward travel, such as credit cards with no international transaction fees.
· Compliance. The financial crisis of 2008sparked the introduction of new compliance regulations across the industry. ATM data plays a vital role in maintaining compliance because it tracks what funds are coming in versus what funds are coming out. This data can help inform banks when funds are low, ultimately preventing a financial meltdown and ensuring customers are always financially protected.
· Crisis. Natural disasters are a common occurrence across the U.S. When disaster strikes, citizens need access to cash money. Think about when Hurricane Sandy hit NYC. Residents scrambled to find local ATMs to withdraw cash, but ATMs across the boroughs were empty. Transaction data combined with location intelligence can ensure ATMs are stocked with enough cash to help keep victims of natural disasters up on their feet when they need it most.
· Security. Everyone is extremely cautious of transactional security these days—and rightfully so. Banks across the country have begun rolling out new security measures at ATMs to help protect identities in ways we couldn’t before. In some locations, customers can “pre-order” money at a nearby location through their mobile phone. The customer receives a unique, one-time code that they use at the ATM to receive their cash. This prevents the customer from having to use the same PIN they use at many locations (like retail stores or restaurants) to complete a financial transaction within their banking account.
· Omnichannel technology. In addition to providing an extra layer of security, these “smart” ATMs have the ability to create a true omnichannel experience for the customer. As we saw in the previous example, a transaction can begin within a mobile device, and be later completed at an ATM. But similarly these ATMs, particularly in Europe, are using these omnichannel devices as a touchpoint for sales and consulting services. Smart ATMs now have the capability to offer tailored services to customers or offer direct access to a service representative, by leveraging customer-generated data captured through other channels, such as online, via mobile device or within the bank branch itself.
· Operational efficiency. Retailers aren’t the only ones struggling to survive in the Digital Age. Financial institutions are finding less and less need for brick-and-mortars. Through ATM transactions, banks can better identify which locations can survive with just an ATM and not a brick-and-mortar. Similarly, ATMs with high transaction volumes may be an indicator that more ATMs or physical branches are needed to service a particular area.
As more banks begin to leverage ATMs as IoT-enabled devices, Big Data management platforms will become even more critical. Specifically with new regulations like GDPR--which requires banks to securely store an individual’s data and have it accessible in one place—Big Data environments will no longer be a “nice to have,” but instead will be a “need to have.” By leveraging these types of environments and data processing solutions, banks can ensure they maintain compliance, while also drawing upon these insights to upsell and cross-sell to customers.
Organizations across verticals should begin looking at their own legacy systems to see how they can connect them to the IoT, just as financial services has done with ATMs. Banks have a head start in the Big Data race because they have these systems in place, but it’s up to them to act.
To learn more about GDPR (Global Data Protection Regulations) visit our web site