In an era of less cash, the ATM still lives
Not so long ago, ATMs were the newest innovation in banking. Instead of waiting in line at a teller window, you could deposit or withdraw money with a few taps of a keypad. Now, though, the square, hulking machines almost seem like a relic of a bygone era when cash mattered. We buy coffee with a single swipe of a debit card and deposit checks through a smartphone, and if we need a $20 bill to pay the dog sitter, we can just hit the cash-back button at the grocery store.
But Central Massachusetts banks say they don't plan to shut down their ATMs any time soon. In fact, they're making changes to improve customers' experiences with the machines. It costs money and effort to keep the networks going, but — like bank branch tellers, who are generally not disappearing either — ATMs offer another option for people who need them.
CarrieAnne Cormier, head of retail operations for Hudson-based Avidia Bank, said the bank sees about 360,000 ATM transactions a year, but the number has been falling consistently by about 40,000 a year.
“Since 2010, we've gone down about 29 percent,” she said. “We're certainly seeing a decline.”
Non-cash transactions have been rising steadily in the U.S. and Canada, from $111.2 billion in 2008 to $127.9 billion in 2012, according to the World Payments Report from technology consulting firm Capgemini and the Royal Bank of Scotland. Yet an annual survey from the American Bankers Association found that the portion of customers using an ATM to manage their accounts has bounced around between 8 and 15 percent over the past five years, with no clear sign of a decline.
Chuck Bauer, executive vice president and chief technology officer at Middlesex Savings Bank in Natick, said there's been about a 2 percent decline in the bank's ATM transactions over the past year, but customers still use the machines about 3 million times a year.
“So they're still being used by a lot of people,” he said. “We still feel that the ATM network is very viable.”
Bower said Middlesex Savings has a few freestanding ATMs, but most are at bank branches. Like most banks, it's also part of a network that lets customers use additional machines for free.
Bower said Middlesex recently switched from the SUM network to the much larger Allpoint network to give customers more options both in the U.S. and overseas. “It broadened the scope and availability of ATMs for greater convenience,” he said.
Technology upgrades costly
JoAnn Morency, director of retail banking at Commerce Bank in Worcester, said keeping up with necessary upgrades to ATM software is costly. Last year, Commerce and many banks switched to the Windows 7 operating system to stay on top of security issues. Morency said another round of upgrades went to adding headset jacks to make ATMs accessible to visually impaired customers.
Morency said the growing use of non-cash transactions is reducing the need to add new ATMs for Commerce, but the bank still sometimes installs the machines if there's a demand. That's happening now in Quincy, where the bank is in the process of adding a machine in response to requests by local businesses.
“When we find that there's a definite need, we are able to do that,” Morency said. “Because they're being used less, we don't always actively do it, but if we find a need, we do.”
Meanwhile, the next step is upgrading ATMs to use the new European-style chip-and-PIN debit cards, which become standard this year. Bower said Middlesex is in the middle of a “pretty sizable project” to do just that.
Tomorrow: Video?
Looking to the future, Bower said some banks may want to expand the services ATMs offer. For example, a video screen could connect users with a teller at a remote location who could answer questions or help complete transactions.
Cormier said Avidia is in the process of creating targeted messages that will let customers earn bonus rewards or coupons from merchants that partner with the bank when they stop by an ATM. She said the bank also plans to let customers use their smartphones rather than debit cards to access their accounts on the machines. That's not only more convenient for some users, it's also more secure, since phones aren't subject to the skimming devices that can cause problems for card users, she said. Even if ATM use is declining, Cormier said, the customer base is still strong enough to warrant continuing improvements.
“Obviously, 10 years down the road, everything's going to look completely different, but those that are using it, we're working on how to enhance that experience,” she said.
(CORRECTION: The initial version of this story misspelled the name of Chuck Bauer, executive vice president and chief technology officer at Middlesex Savings Bank in Natick.)
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