New ATM Designs Imitate Online and Mobile Banking

Before heading to lunch, Kirsten Keary-Taylor, 29, uses an iPhone app to request $20 from a nearby ATM. Passing the cash machine on her way out, she scans it with her phone to retrieve the bill. “It’s significantly faster than fumbling for my card and opening my wallet,” says Keary-Taylor, who works in the Chicago area for Wintrust Financial. The $17.1 billion bank, which has been testing its mobile-cash feature among employees for about two months, plans to release it publicly later this year, says Senior Vice President Thomas Ormseth. “We think we’ll attract a new client base, 35 and under, we didn’t cater to before,” says Ormseth. New ATM hardware and software can cost from several thousand dollars to more than $75,000 apiece, but Ormseth says banks need to invest to appeal to younger consumers. “If you look at the competition banks are facing down the road, it’s from Google, it’s from PayPal,” he says.

About half of U.S. financial-services institutions surveyed between December and March by research firm CEB TowerGroup plan to replace their ATMs before 2017. Of those, most say they’ll have done so by the end of next year. These mark the banks’ first major ATM upgrades in more than a decade, says TowerGroup research director Nicole Sturgill. While major software updates used to come along every three to five years, banks now want them annually, says Douglas Brown, a senior vice president at FIS, which manages a network of more than 400,000 ATMs for various banks. “The demand for this is somewhat unprecedented in my view,” says Brown, who’s negotiating with 12 banks interested in mobile-cash software.