Fancy new ATMs could doom branch banking

New machines are offering videoconferencing with tellers, lottery tickets, fingerprint authentication and even loan applications.

By MSN Money Partner Jan 23, 2014 2:59PM
Person withdrawing cash © Image Source/Image Source/Getty ImagesBy Catey Hill, MarketWatch

Your ATM will soon be more than just a cash dispenser. In fact, financial executives and analysts say the technology may soon be able to replace some human bank tellers and bank branches.

There are roughly 425,000 ATMs in the U.S., and many of those have already gotten an upgrade -- or soon will. 

On Thursday, Citibank (C) told MarketWatch it will unveil new ATMs in the U.S. that "remember" customer preferences (like language), offer on-page scrolling (as on an iPad), let you check your balance without leaving the screen you're on, and feature instructions that are more conversational; the new ATMs were piloted in New York City last year and will begin rolling out in other locales in February. 

The move is part of a larger evolution of the stalwart machines. In the past few years, Chase (JPM) and PNC (PNC) introduced ATMs that dispense $1 and $5 bills; Citibank and Wells Fargo (WFC) began letting you get an email receipt of your balance rather than a paper one; and Bank of America (BAC) and a number of credit unions began experimenting with video conferencing with a live person right on the ATM rather than keeping employees in every branch.

Banks say they're adding these kinds of features to add convenience for consumers -- a convenience that may mean that you really no longer need to wait in line to see a bank teller. 

Mark Gilder, director of distribution strategy at Citibank, says that while customers certainly want to speak to a bank representative on big topics like loans, they like the efficiency of the ATM for other features. The ATM is becoming full-service, he says: "We think at least 85 percent of the things you do at the teller, you can do at the ATM." (Citibank is experimenting with video conferencing in Asia, as well as fingerprint authentication and applying for loans via ATM.) 

It makes financial sense for banks to do this: "The whole point is to drive down operating expenses," says Ben Mazzotta, a postdoctoral research fellow at the Institute for Business in the Global Context at Tufts University. Already, at least one credit union has added ATMs that do video conferencing in the place of tellers in certain branches, which means you speak to a person via video on the ATM rather than in person.

While teller jobs certainly won’t dry up completely -- people like talking to tellers for large transactions like mortgages, and some tellers may do videoconferencing -- we may see more of these jobs disappear, as industry experts expect the functionality of ATMs to become more useful and, in many cases, teller-like in the future. 

David Tente, a spokesperson for the ATM Industry Association, says that he thinks that in addition to having video conferencing capabilities, ATMs will be able to better facilitate person-to-person transfers and other types of payments (many already let you make loan payments on-site), spit out cashiers' checks, and allow you to make transactions without inserting a card (possibly by standing near the ATM with your mobile phone).

To be sure, you can already do most of this on your mobile phone, tablet, or computer -- so why, you may ask, will you need an fuller-featured ATM? While 80 percent of consumer spending in the U.S. is already cashless, according to a September 2013 by MasterCard, we're still a long way off from a cashless society; and roughly 80 percent of ATM transactions are to deposit and withdraw cash.

What's more, the ATMs can -- and could more often in the future -- dispense physical goods to consumers. Already, some ATMs dispense stamps, lottery tickets and gift cards, says Tente. And Better ATM Services CEO Todd Nuttall, whose company enables ATMs to dispense prepaid gift cards, says that he's been approached by transit authorities to dispense their cards via ATMs, as maintaining all those kiosks for subway, rail and other tickets is both a bottleneck and pricey. 

"You can deposit checks using your mobile phone, but it still doesn't replace the ATM for physical products like cash and cards," he says. That's why, he says, ATMs may soon dispense more products.

They may also be used by more people in the future: Euromonitor predicts that ATM transactions will go from about $632 billion in 2013 to $874 billion in 2018. One of the reasons for this growth, says Mazzotta, is that payments from employers and governments to more and more workers will happen via debit card (rather than physical check); those people will need access to ATMs to get this money and move it around. 

"ATM use will rise," he says. And so too will its functionality.

More from MarketWatch

Jan 23, 2014 4:45PM
"...a convenience that may mean that you really no longer need to wait in line to see a bank teller. " Well, that's true enough. Now you'll get to wait in line outside (think about that when the wind chill is -20). And you won't have a leg to stand on when there's a glitch and your $2000 deposit comes out $200. 
Jan 23, 2014 5:20PM
Translation:  more people out of work
Jan 23, 2014 3:51PM
Computer technology is just killing the economy for the common man, the middle cl****ductivity gains from computers go toward company profits, thus to the shareholders.  The average employee gets nothing, except let go.  This is why we have little or no income growth for many years, actually negative vs inflation.  

It's getting worse and worse; a teller job is a way to make decent money with a stable job, and now that's on it's way out.  I love online banking, but that's part of what is killing this employment niche.  It's going to get where there are almost no decent jobs, just a few high-end and lots of part-time/low-end, and not enough of either, with very little in the middle.   All driven by computers and the decline of manufacturing in the USA.  When our wages get low enough, manufacturing will come back, but we'll all be destitute by then and unable to buy anything. 
Jan 23, 2014 5:05PM
When it comes to depositing cash I will always use a teller.  I do not trust an ATM or the people who collect the money from the ATM's with $500-$1000 cash. 
Jan 23, 2014 6:32PM
Remember when ATM's first came out with the promise that they would reduce the lobby lines and tellers, and give you anytime banking for free, because it would cost the banks less to operate?  Then the banks added transaction fees that are exorbitant to the ATM's.  What do you think they are going to do with these new machines!  More fees!!!  You take all the risk, the weather, the robberies, the lost cards, computer errors, etc.  
Jan 23, 2014 5:10PM
Oh, great!  Now we can stand in line outdoors instead of indoors!
Jan 23, 2014 6:18PM

The Great March Towards Total Technological Automation continues.


Do we REALLY need all of this?  Is this what the people REALLY want?  Or is it just being jammed down our throats by Big Business?


What will we do for employment when the machines do nearly everything for us?


SkyNet is just around the corner.....

Each ATM also comes equipped with a young black man in a hoodie carrying a 9mm eyeing your every move from 100 yards away.
Jan 23, 2014 6:20PM
ATM's are useful to a point, who would stand at an ATM and fill out a loan application???
Jan 23, 2014 3:16PM
Yippee now we can have drive/walk up video game Monopoly.   Just need to change the cash to pretty colors... Oh wait they are already doing that.   Look how generous they even have free parking like in the board game.    Soon you'll have to walk up these ATMs and just pay your taxes daily with your slave wages for passing GO (showing up to your job). 
Jan 23, 2014 6:38PM
Why can't we find jobs?  It must be Bush's fault.  No.  It must be Obama's fault.  Guess again--it's technology and it's getting better and coming for a job near you.
Jan 23, 2014 7:00PM

I don't put my trust in machines and all this technology. A lot of damage has been done. ATM's are not always located in safe places. It is a lot to think about because too many things [machines] identity theft and hacking is too prevalent these days. Nothing is private any more, or safe.

Jan 23, 2014 6:27PM
e-mail, smart phones / TVs, self check outs, new ATMs that replace tellers, untold future technologies. Soon there will be no jobs for humans to do. I want to retire anyway!
Jan 23, 2014 7:41PM
duh - when ATM's first came out years and years ago that was the claim then - I refuse to pay a fee for something I can walk into a bank and conduct my transaction - eliminate the tellers and they will be fee free at first then they will start draining people dry - just watch
Jan 23, 2014 7:20PM
Great, a line at the ATM and a line of hoodies in the bushes!

I can just see those spanish only speaking customers at Bank of America lining up to talk with a teller and hand the machine $9,000 or ask for a $9,000 withdrawal. I am sure the crooks standing behind the guy will be tempted to rob him when the screen or teller on the screen says here is your $9,000 withdrawal. After all most of those badly speaking spanish guys handing the teller $9,000 are laundrying drug money.


I can see the line at the ATM machine becoming super long as tele tellers speaking broken english from Indian try to talk to customers speaking broken english but mostly spanish. You will probably ask for your balance and some guy in India gets $100,000 and you get the loan with an automatic payment from your account.


If you close out an account with some money on it will the teller machine just hand you $30,000 or write a cashiers check for $30,000 or that new banker's check for $30,000 which I do not know what the difference is but it's only $5 instead of $20 charge.


How will you keep the transactions from the person behind you at least now most banks have a line that is a few feet away from the tellers. But not so at ATM machines which is why most people leaving the bank get robbed coming from the ATM machine. -


Will Indian tele marketers soon have to learn spanish as well as english like the branch tellers around me??



Jan 23, 2014 6:39PM
Still need someone to talk with when the machines is not working or if there is a more difficult matter to solve.
Jan 23, 2014 6:49PM


It's called "Creative Destruction." It never stops.

Jan 23, 2014 6:24PM
Lowered operating expenses oh less people less jobs less to pay out in health benefits I can see the analysts point. So since banking is just a numbers game we can get away with bank managers and the bank CEO put several part time employees in a coffee shop size building to help those that want to talk to a teller or better yet just like the Health industry is doing a video chat online with one of 50 bank reps, one representative for each state in the Union. Cool is my sarcasm coming thru?
Jan 23, 2014 4:56PM
Reading about the needed upgrades to ATMs coming in April (Windows XP to Windows 7), this is only to cover up the cheapness of the banks and credit unions. Not talking about replacing employees but the fact that the software upgrades with the related equipment upgrades will be older software and not the latest available. Why are they going to Windows 7, which is 4 years old, and not to Windows 8.1? Windows 7 support is already on a schedule to end support in a few years. The banks should be upgrading their equipment to handle at least Windows 8.1 but also need to be upgraded to handle the new credit/debit cards coming in 2015 (cards with European style chip technology). The upfront costs would be higher but the long term cost savings would be tremendous. The sad thing is that there are reports of a new Windows ("Threshold") coming out fairly soon so even Windows 8.1 will be put on the chopping block shortly after. Like how many other businesses do their business, banks are always just a step or two behind the times and have to play catch up more often which costs them money. Obviously there are no forward thinking leaders in the industry.
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