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ATMs - celebrating a remarkable half-century milestone

Automated teller machines (ATMs) are celebrating their 50th birthday this year. The first ATM was invented by John Shepherd-Barron on 27 June, 1967, and was first installed in Enfield Town branch in north London. Within 50 years, it has evolved from a simple cash dispensing machine to an all-in-one digital banking outpost. Simultaneously, the ATM Industry Association (ATMIA) is also completing 20 years. So, this year marks dual celebrations for both 50 and 20 year milestones!

There were three million ATMs operating worldwide as of 2016. By 2020, the number is expected to reach four million. In fact, the world is going to witness around 37 percent growth in ATM installations between 2014 and 2020. This includes 50 percent growth in ATM cash withdrawals despite the presence of online banking.

It is no surprise that ATMs are the preferred banking channel, allowing customers to directly access their money. During India's demonetization drive, ATMs were the most visited machines. Most of us had to queue in front of them to get the first glimpse of the new 500 and 2,000 rupee notes.

Over the last five decades, ATMs have transformed from cash withdrawal machines to self-service channels, complementing branch, mobile, and Internet banking.

Today's ATMs are providing a wide range of banking services, as follows:

1.Card-less - With growing demand for near-field communication (NFC), personal identification number (PIN) and plastic cards are slowly becoming redundant. Several banks across the globe now support the use of smartphone for cash withdrawal from an ATM using NFC technology. Customers can download banking applications on their smartphones and wave their smartphones to get instant access to their money and other services. Such card-less ATMs can reduce customer data-related fraud which account for 30 percent or US$2 billion losses annually. Many leading banks across the globe have started launching an emergency cash service on card-less ATMs.

2.Multiple functionality - Thanks to rapidly evolving technology and smart innovations, ATMs now perform multiple functions including simple cash dispensation, instant loan provision, live video advise from tellers, among others. Banks are rapidly modernizing and innovating their ATM banking interfaces with simplified touch-screen user interface and advanced cybersecurity protection. The remote ATM monitoring software with advanced analytics are attempting to reduce the downtime of machine and operational costs, while improving utilization and customer satisfaction.

3.Cash recycling - These make cash deposited by customers for cash dispense operations by other customers thereby reducing the cost to banks for cash deliveries to ATMs. Chinese ATM vendor, GRGBanking has estimated that cash-recycling machines can decrease the daily cost of ATM operation by 18 to 25 percent, and could save as much as US$948,000 per 100 ATMs annually. This green solution is widely accepted by Japan -- in fact, 100 percent of new ATM installations in Japan are cash recyclers.

4.Biometric authentication - According to a survey, 40 percent of banking customers feel PIN is not a safe way to withdraw cash at ATMs. Biometrics are emerging as more reliable method of authenticating user's identity. With biometrics, banks can ensure only authorized customers who go through the fingerprint, palm and finger vein patterns, or iris scans can get access to their accounts.

The recent biometrics technique of customer authentication includes using customer's heartbeat rhythms, being tested by Canada's largest bank.

Let us browse the following key innovations:

1.Face-recognition ATMs: Customers can be authenticated based on facial recognition. Some leading ATM manufacturers have started offering this mechanism.

2.Loan-dispensation ATMs: Based on predictive analytics, banks can cross-sell through ATMs. The user interface can be personalized to offer most frequent transactions and next best offers. It can offer pre-approved personal loan to customers too. Customers can get loan approval in a few minutes and start accessing the loan money! Financial institutions (FIs) in Russia and Poland have started offering instant personal loans to customers through ATMs.

3.ATMs with video conferencing capabilities: Customers can have a video conference with teller through these ATMs. The teller can control the machine and its functions, helping customers to complete the banking transaction.

4.ATMs with aerial imaging plate: This is a contactless ATM with holographic floating interface. Customer can see the ATM user interface floating in midair. He can perform hand gestures to make a selection like pressing a button without touching the actual screen.

5.Apple's virtual ATM: Apple has recently filed a patent for iTunes-based ATM network. The apple phone user can launch the application and borrow instant cash from nearby iPhone users. The borrowed money will later be settled through iTunes accounts.

6.Gold-dispensing ATMs: One of top Swiss gold refiners in the world has launched Smart Gold ATM in Singapore. This gold vending ATM machine allows users to convert cash into 24 karat gold coins / bars. Likewise, ATMs can be used to dispense other goods, including lottery tickets, gift cards, movie tickets, postal stamps, and other consumer goods as well.

7.Bitcoin ATMs - Unlike traditional ATMs, these act as bitcoin currency exchange machines. They are connected to bitcoin exchange, allowing users to exchange cash for bitcoins or move money to public key on the blockchain. In future, when the regulations on bitcoin currency are formalized, these would be easily accepted by users worldwide.

ATM 2.0, the future of self-service banking, can be envisioned as the convergence of ATMs and smartphones with expanded interoperability.

ATMIA has rolled out the red carpet to celebrate this memorable milestone and urged billions of ATM users to join this mega event to unveil the true power of ATM!

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