- – From Thomas Yohannan
When you look at the demise of stores like Best Buy and Blockbuster, it’s easy to see why physical retail stores, at least mid-market ones, are going out of business. The value proposition these stores used to afford to the consumer is simply not there anymore, because the Internet makes things cheaper and more robust. Add to this the fact that staffing and store leases drive up the final price of products, and it’s no wonder malls are become a money loss center.
Just like retail, bank branches are experiencing these same strains. Banks are increasingly charging customers for personal service as cost increasingly becomes a factor when compared with online and mobile services. As a result, the future of bank branches may end up being more about the transaction and less about the interaction.
The past few years have seen a push for more technology in bank branches because of efficiencies that can’t be realized through face-to-face communication. A quicker way to achieve this is by creating better ATMs. ATMs will get to a point where there is no added benefit to interacting with a live person. As a result, the effects of mobile devices, tablets and the Internet are being felt on traditional banks that have long relied on a physical presence. Banks in Europe are already resorting to “beefing up” ATMs to create quicker transactions that let them save on staff and leases.
Does this mean are we moving into an age where physical banks will start to be less relevant and ATMs more prevalent? Not necessarily, although ATMs are everywhere.
Currently, U.S. banks operate (or control via branding arrangements) roughly 205,000 ATMs in the United States, according to government and industry estimates, with about two-thirds situated in or near various kinds of banking outlets and the remainder stationed “off-site,” with an additional 220,000 units operated by independent companies. It may be a more advanced form of the ATM that replaces these numbers as an added service to bank branches.
The next few years will be seen as a time where banks push customers to use online and mobile services while adding fees to any human interaction. However, such shifts in the banking services industry will probably be met with some angst on the part of folks in rural areas and the elderly. These groups are accustomed to personalized service, and it doesn’t seem like mobile banking has caught up to the point where it can be widely used.
So what is the next evolution? Supermarkets serve as a good example wherein a hybrid of staff and self-service ATMs could soon be the norm. Anything you currently do over a counter will be automated with staff assisting, similar to a supermarket self-service checkout. However, these are “dumb” machines. If video services can be implemented into ATMs so that all transactions could be screen-based, enabling banks to replace over-the-counter staff and leave just supervisors in branches, then a hybrid model may work. But it is no guarantee.
While the demise of the traditional high street bank has been playing out over the past few years and will continue to do so, I don’t believe that the use of the ATM and on-screen video services can truly replace personal interaction when it comes to dealing with money. There are simply too many complexities, such as mortgages, where technology cannot replace the “personal touch.”
Additional services are always welcome by ATMs, but the trust factor of an on-site person will always need to be present. Public opinion will be the ultimate judge of whether technology will be accepted, not only into payments but also service.