The evolution of self-service banking has fundamentally changed how consumers interact with financial institutions. ATMs were among the first technologies to give customers greater control over everyday banking, providing 24/7 access to cash without requiring assistance from a teller. That shift established a model for convenience that would eventually extend to debit cards, online banking, mobile banking, and digital payments.
Today, mobile banking represents another major transformation in the banking experience. Just as ATMs moved routine transactions outside the branch, mobile technology allows consumers to manage an expanding range of financial activities wherever they are. For banks and credit unions, these technologies can also free employees to focus on more complex customer needs, including financial wellness and advisory services.
The profound changes taking place in how consumers and small businesses bank is new and old at the same time. The financial industry’s recognition of the impact of the ATM on our daily financial lives, and the article does well to link the innovation with the current period of upheaval brought about with mobile banking.
Adoption took a while, but community banks across the U.S. rushed to add ATMs during the 1970s because customers wanted the convenience, Centier Bank Senior Partner Robert Buhle said.
“I believe it was one of the first truly automated tools of the banking trade,” Buhle said. “It was the first self-service where a banking customer could serve themselves. Someone who wanted cash from a paycheck didn’t have to speak with a teller. The revolution was that all of a sudden you could bank 24/7.”
ATMs paved the way for debit cards, point-of-sale transactions, online banking, voice-response mobile banking and payment methods like Apple Pay or Samsung Payment, Buhle said.
“Mobile banking is the new ATM,” he said. “It has a robust feature set. You can do anything short of getting a cash withdrawal.”
Mercator Advisory Group agrees with the assessment of the impact of mobile banking as being on par with the ongoing expansion of self-service delivered by ATMs.
Banks had to evolve after ATMs automated many routine transactions. Peoples Bank Chief Executive Officer Ben Bochnowski often jokes with his bankers that customers haven’t had to talk to tellers for a half century to get access to their money, “so when a customer comes through the door, you know it’s important.
Recognizing technology as a tool that affords greater efficiency and convenience in the processing consumers need to engage on more frequently frees human assets to focus on the more subtle and nuanced solutions those same consumers are coming to expect for their personal financial wellness. We anticipate the wider range of payment options and structuring delivered through mobile banking will further spur the need for financial wellness and advisory services from financial institutions. Perhaps the launch of mobile banking will be seen in a similar light as the advent of ATMs in the not too distant future.
The history of ATM innovation provides a useful framework for understanding the potential long-term impact of mobile banking. ATMs initially transformed a relatively simple banking function—accessing cash—but their influence extended much further. They helped consumers become comfortable with self-service banking and paved the way for additional technologies that reduced dependence on traditional branch interactions.
Mobile banking is advancing that transformation by putting an even broader collection of banking and payment capabilities directly into consumers’ hands. Customers can perform many routine activities without visiting a branch, while financial institutions can redirect employees toward interactions where personal expertise provides greater value.
That does not necessarily mean the disappearance of ATMs or branches. Instead, each channel can take on a more specialized role within the banking experience. ATMs continue to provide convenient access to cash and other self-service functions, while mobile banking handles an expanding range of transactions and account-management activities. Branch employees, meanwhile, can concentrate more heavily on financial guidance, problem-solving, and other complex customer needs.
As consumer expectations continue to evolve, financial institutions will need to determine how these channels complement one another. The most successful strategies are likely to use technology to make frequent, straightforward transactions more convenient while preserving human interaction for situations where it matters most. In that respect, the rise of mobile banking could eventually be viewed as another defining moment in banking technology—one that builds upon the self-service revolution that began with the ATM.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
Read the full story here
