To further understand how COVID-19 impacts consumer banking behavior, Cardtronics hosted a webinar, hosted by the American Banker & Credit Union Journal, titled “The Rise of the ATM as the New Branch.”
The webinar featured a panel of leaders from various financial institutions exploring different approaches to the ATM channel and how that has enabled them to divert more resources to digital platforms while containing costs and maintaining exceptional consumer experience.
Below we recap the insights shared in the latest webinar. You can also listen to the webinar here.
The effect of changes in consumer behavior
In the beginning stages of COVID-19, financial institutions prioritized reducing in-person interactions to protect customers and staff while ensuring account holders experienced limited impacts on their financial handlings.
Financial Plus Credit Union had made the strategic decision to expand its customers’ ATM access with the Cardtronics Allpoint network back in the fall of 2019. By partnering with Cardtronics, Financial Plus expanded its customers’ access to conveniently located surcharge-free ATMs to 55,000 worldwide. What they didn't know was that this partnership came at a very fortuitous time.
“In March, it became a cash lifeline to our members,” said panelist Peter Fauth of Financial Plus Credit Union. “Customers were able to make a one-stop-shop at Walgreens or CVS and have access to their cash at any Allpoint ATM, which was not only convenient but also safe at the time, limiting contact.”
While operating through the pandemic had many challenges, banks and credit unions managed to continue opening new accounts, issuing cards, getting loan signatures — doing just about everything via ATMs, drive-thrus, and online banking.
Providence Bank & Trust found that digital platforms increased by over 50 percent in the eight months since the start of the pandemic. Panelist Janet VanKley of Providence Bank & Trust reported that customers began opting for more debit cards. Additionally, treasury management features online were being used much more than in the past. Technology proved to be efficient, and overall, the transitions went well.
ATMs deliver funds while limiting physical contact
When branches closed, the ATM became the go-to physical self-service provider. Although consumers were using digital banking, in effect, the ATM became the new branch where account holders could carry out a range of financial transactions and, most importantly, get access to their cash and make deposits. Since the start of the pandemic, the Allpoint ATM network has become a vital tool for many financial institutions, allowing customers to get their cash safely and conveniently, without the hassle of surcharges.
Fauth cited a recent survey conducted by Phoenix Synergistics, which found that baby boomers use ATMs as their banking method 68 percent of the time, third behind physical branches and online banking. Generation X uses ATMs 74 percent of the time, second behind branches. For millennials, ATMs are the top channel with an impressive 82 percent usage rate.
Meeting customers’ needs in innovative ways
Flagstar Bank’s strategy was to hyper-focus on the customers who were not familiar with alternative banking channels. While many people are comfortable with online banking, mobile banking, and ATMs, some customers have only ever completed their banking needs at physical branches.
“We put a task force in place to do an outreach to customers who hadn't yet adopted any of the other channels,” said panelist Jennifer Smith of Flagstar Bank. “We needed to teach them that they can access Cardtronics' Allpoint Network nationwide, and that it’s safe and surcharge-free.”
Banks ensure their customers’ needs are being met by offering access by appointment only, scheduling one-on-one phone calls, and balancing drive-thru traffic. People still expect drive-thru banking to be a speedier transaction, making it essential to limit what types of transactions can be completed and not keep customers waiting.
Providence Bank & Trust next plan is continuing with the implementation of ITMs or interactive teller machines. According to VanKley, the bank has already begin testing ATMs with ITM capability, with full availability expected in the next three years. This new technology will give the customer self-service ability and allow the bank more flexibility in staffing.
Finding a new normal in the banking industry
While the transition toward self-service banking was already in motion, COVID-19 accelerated it beyond anyone’s imagination.
We might not see as many brick-and-mortar branches in the future, but it’s up to financial institutions to decide how to make up for that on the customer growth and sales growth sides. Smith explains that financial institutions will need to invest in technology as well as staff education.
“It's important to make sure your staff knows that they are still needed, but their skills will go to different efforts,” said Smith. “Instead of counting coins and checks, their work will focus on training and growing relationships with customers.”
The self-service channel is where the future of banking lies. Consumers continue to demand cash, and how they access those funds plays an essential role in selecting their bank choice. The key to growth in the future is where these institutions put their technology investments.
Those interested in learning what the future has in store can listen to the webinar here.