It's been over 50 years since the first Automated Teller Machine was invented, and the ATM industry has undergone a major transformation that has revolutionized the cash system. The continuous deployment of new technologies has been a key factor in revenue growth across the ATM industry.

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The goal of every financial institution offering ATM services is to ensure that they offer more services with less complexity. In a nutshell, the aim is to increase functionality while accelerating transaction automation. To validate how much the industry has evolved, it’s important to note the trends around ATM innovation.

Main trends around ATM innovation

Using a cash recycler as a cash management solution

Cash recycling enables an ATM to accept, validate, sort, and store banknotes quickly and reliably. This system makes it possible for ATMs to withdraw money and perform depositing from the same cassette, reducing the frequency of cash replenishments and thus minimizing labor costs.

Full-service ATMs

These can serve as a customer's first touchpoint with the bank. Instead of simply serving transactional purposes, ATMs could become relationship-building tools for banks facilitating account opening, instant card issuing, checkbook printing, and other multifunction technologies. Video banking via Remote Teller Technology enables customers to interact with the bank and perform most of the branch's activities using real-time communication and video.

Contactless withdrawals

Contactless withdrawals and depositing backed by NFC technology, enabling customers to 'tap and go.' The trend is gaining popularity, yet it’s not a mainstream feature.

Cardless ATMs

Cardless ATMs with facial recognition features using computer vision. An example of cardless ATM withdrawal would be Intel’s RealSense camera technology that can verify the card belongs to the person who withdraws the money. Biometric authentication also implies that the consumer can withdraw cash with no card or PIN, which drives convenience. This is especially helpful in the pandemic, as physical contact with ATM surfaces can be minimized.

ATM data analytics

ATMs can now collect data from the self-service transactions performed on the machine, which makes it possible to deliver customized statistics on the customer journey, used to increase their overall customer satisfaction.

Conversion to EMV (Europay, MasterCard, Visa)

This ensures that card fraud protection is implemented in most ATMs, yet some regions are still falling behind. The push from the regulators regarding EMV compliance will be continued in the upcoming years

Customer journey personalization

This facilitates the displaying of segmented messages to the clients, personalized transactions, and timely offers for selected groups and locations.

The duality of ATMs

With the continuous improvement of these ATMs, modern ATMs have much more to offer than single cash withdrawals. Cash recycling is the largest growing ATM segment globally, and, according to the UK’s RBR, their numbers are predicted to rise by 25 percent over the next five years. From 2020 to 2021 alone, the number of cash-recycling ATMs deployed worldwide grew from 973,000 to just more than a million. That number is projected to exceed 1.2 million by 2026, while non-recycling ATMs are projected to continue to decline.

Various additional services have been bonded to the ATM to increase customer engagement and interface. These include sports betting in ATMs which allows a customer to place or redeem a bet on an ATM kiosk, the ability to pay utility bills, and user-centered ATM design enabling intuitive interactions with the customer among other services.

Crypto ATM business

Cryptocurrencies first emerged in 2009 when the world’s first decentralized currency, Bitcoin, was created. According to metrics recorded by coinatmradar.com, at the beginning of August 2022, the number of digital currency dispersing automated teller machines (ATMs) operating globally had crossed the 39K mark. In fact, across 77 countries, 614 crypto ATM operators had installed 39,011 cryptocurrency ATMs. This boom in cryptocurrency ATMs from the 18,000 that had been installed by April 2021 shows the surge in the need for these ATMs.

There are several players operating in the space. One of the largest holders of the Bitcoin ATMs network, Bitcoin Depot and has a partnership with Circle K to install crypto ATMs across the U.S. and Canada. The partnership has since resulted in the installation of more than 700 Bitcoin ATMs. Other cryptocurrencies-focused ATM providers are General Bytes and bitcoin-focused Chainbytes.

However, banks are still very much concerned about the security of crypto ATMs. The traditional banking ATMs are backed by bank insurance that ensures reimbursement in the case of illegal activities. In general, this is not the case with crypto ATMs as they do not have central financial authority or insurance. To date, there are only a few use cases of banks offering crypto ATMs to their clients, including Virginia-based Blue Bridge Bank. Other leading banks are withdrawing from crypto ATM activities due to high volatility and security risks.

ATM efficiency

ATMs could work as an opportunity to introduce businesses to prospective buyers using targeted billboard signs, branded wraps, personalized screen messages, and bespoke dockets. ATM advertising is part of the broader advertising category DOOH (Digital Out-Of-Home) media. DOOH media advertising requires specific screen technology, which is offered by companies like Infinitus.

ATMs provide a communication channel to highlight local businesses, local events or FI offers to customers. They offer an opportunity to extend services to more people in more places at a far lower operating cost than a bank branch.

Analyzing the errors sent to internal systems by ATMs

Today ubiquitous digital connectivity allows banks to remotely access an ATM’s technical condition. Banks need to have a comprehensive ATM acquiring solution in place that offers comprehensive management and operations support. Remote management not only provides 24/7 visibility of the entire network but also pinpoints areas of concern before they turn into brand problems.

Out of the box: 3D print for ATMs

Some banks are now using 3D printing to design and produce ATM components that prevent credit card skimming. As the digital and physical security worlds meet, 3D printing will play a vital role in creating hardware to fight fraud. Moreover, 3D printing has the potential to take the personalization of services a step further. Companies will be able to offer personalized products at lower costs. In ATMs, clients could receive personalized cards thanks to 3D technologies.

The new ATM of the future

The main question that remains unanswered is what to expect next in this industry regarding innovation. The Financial Brand points out that despite cash usage having partly rebounded, next-gen automated teller machines will increasingly become mobile-centric. The result will be machines that are more customizable with advanced features and reduced costs, able to handle more teller functions, and, in some cases, replace branches. The question of the next innovation to be introduced remains a mystery with the rapid rate of new ideas all with the aim of providing the best solution to the fintech industry.