ATMs Taking Over for Tellers

Mobile phones and apps have changed how we do everything, from dating to driving. Banking is no exception. The popularity of digital banking, especially via mobile apps, doesn’t seem likely to fade. An Ipsos-Forbes Advisor U.S. Weekly Consumer Confidence Survey found that 78 percent of Americans with bank accounts prefer using their bank website or a mobile app to conduct their financial business. Apps edge out websites, with 41 percent selecting it as their favored channel, vs. 37 percent for websites.

Just as changing digital habits are impacting the number of ATMs, they are also impacting the number of bank storefronts. The consumer preference for digital banking has led to a dramatic decline in physical branches. The number of branches in the U.S. has been steadily declining since 2008. There was an especially large dip in 2020, due to the pandemic.

Like ATMs, though, it’s not likely that brick-and-mortar branches will go away. In a recent report based on its 2021 Digital Banking Survey, PwC found that 25 percent of bank consumers identify as “phygital” – which PwC defines as active users of both digital channels and branches. This is an eight percent increase over 2020.

Jonathan Valenti and Ryan Alderman, both principals in Deloitte’s Financial Services practice, say consumers favor digital channels for routine transactions – but prefer in-person assistance for more complex services like applying for a loan and opening a new checking account. They also prefer the human touch for informational purposes like asking about new products or getting financial advice.

This seems to be what PNC is counting on with its new branch strategy. The Crain’s article quotes a PNC executive who said the bank’s goal is “to create the space and the time for our branch employees to facilitate the in-person interactions that we know are so valuable to our customers.”

More banks may adopt this model as they seek to lower their branch overhead while keeping their customers engaged. To make this model work, at least some ATMs will likely need to add more robust functionality, including the option of remotely interacting with tellers. These fuller-function machines are often called interactive teller machines (or ITMs). Nearly 18 percent of those surveyed for the ATM & Self-Service Software Trends report already have ATMs with this feature, while 30 percent plan to implement it in the near future.