Published April 27, 2023
When we think of drive-ups we might think of fast food, coffee shops, or even drive-in movies. Banking is not the first that comes to mind, but it was actually the financial sector that first pioneered it.
Since the late 1940s when the Exchange National Bank of Chicago opened up the first drive-up teller, financial institutions have used the concept to make banking faster, simpler, and more convenient.
About 80 years later, drive-up banking is still popular. This time, it is being supplemented with ATMs and their more advanced cousins, the interactive teller machine (ITM). In a world driven by technology and the search for faster, more convenient, self-service technologies such as automation, video links, AI and much more will see banking continually reinvent itself to be more flexible and customer focused.
The arrival of COVID-19 and all the safety concerns that came with it pushed forward the need for self-service options. With financial institutions putting in place social distancing and hygiene measures, drive-up ATM services became increasingly attractive across all areas of the world.
Before the arrival of drive-up ATMs in the US, people often struggled to find time to visit their local bank. Back in the 1950s, the complexity of in-branch experience caused it to be perceived ashectic, complicated and time-consuming. Queues could sometimes be long. And, because banking services were in such demand (with lengthy transactions times) lines sometimes spilled out onto the street.
Take a look at what a typical U.S. branch looked like in the 1950s.
Back then for customers, the prospect was pretty bleak. If they wanted to visit a bank, they would have to take several hours out of their already busy days. Even those with simple transactions that would only take a few minutes found themselves standing in line behind other customers who would take much longer.
Customers started to demand faster, more convenient services. Today, convenience is the number one goal for any financial institution with self-service and online banking channels, offering an experience that is constantly becoming faster, slicker, and easier.
With the exception of more complex services, such as applying for a loan or managing a retirement savings account, customers can complete any transaction from the comfort of their vehicles or their homes. See how Vantage Credit Union increased their transaction volume by 45% on drive-up ATMS, providing their members with excellent service.
The first ATM was installed in 1967 outside a London Barclay’s branch, a device largely credited to British inventor John Sheppard-Baron. ATMs provided the simplicity and eﬃciency that customers wanted, while allowing them to make withdrawals whenever they needed. And, with the invention of the Personal Identification Number (PIN), Scottish inventor James Goodfellow gave the world the modern ATM.
New types of software allowed self-service machines to connect to a vast computerized network, making it possible for individual terminals to communicate with one another and with the institutions that installed them. Eventually, ATMs and self-service machines were expanded to drive-ups, with the ability to do more than just get cash or make deposits.
Since then, more than 3 million ATMs have popped up around the world, largely helping FIs with the migration of the most common and frequent banking transactions to the self-service channel. Although the United States remains the largest market, drive-up ATMs are also popular in countries like Brazil, Canada, Columbia and Saudi Arabia.
With such wide adoption, FIs can provide fast and eﬃcient service that suits their customers. Dick Parkhouse, a director at Barclays, summed up the beneﬁts:
“It is ideal for anyone having diﬃculty visiting cash machines either because they have children in the car or ﬁnd parking diﬃcult. It is easy to use and very convenient because people can pull in, get their cash and drive oﬀ without leaving the comfort of their vehicle."
As branch traﬃc continues to decline, consumers are still looking for more eﬃcient ways to use banking services. With growing concerns about privacy and safety, FIs are upping their use of innovative self-service technology(ITMs).
ITMs are essentially ATMs with access to a teller via a live video. This allows consumers to connect directly to a teller or another ﬁnancial professional remotely at their own convenience. Through the use of two-way videoconnection, touch technology, and veriﬁcation software, ITMs give consumers the teller experience in extended hours and locations, without a need to step inside an actual branch.
ITMs combine the convenience you get from a self-service machine, with the customer service you’d get from a teller. With this option, live support is there any time people need it. It allows financial institutions to provide convenience and more in-depth customer experience without over burdening their staff.
With ITM tellers, customers get assistance from remote call center locations—or tellers working from their homes—from across the country.
Customers simply walk up to (or drive-up) to a self-service terminal, enter their card and credentials, and can request teller assistance on demand. This eases the burden on the local branch, extends operating hours, reduces waiting times, and provides customers with the convenience and personalization of in-person banking services.
The ATM continues to evolve and brings more convenience to the table. Customers can now access a wide variety of devices wherever and whenever they want and get access to their finances in a secure and convenient manner.
Looking to the future, more advances are on the way. In a world in which the threat of fraud and cyber security is constantly growing, financial institutions are looking for more sophisticated forms of verification such as biometrics and geolocation. Solutions such as facial recognition hold out the promise of a contactless form of verification that is immune to theft of cards or personal details.
Customers can now access banking services any time, anywhere, and from any device. With each new advance, expectations continue to grow. Services that felt fast and convenient five years ago, now seem slow and outdated. To stay competitive, financial institutions will need to continue to use more innovative, personalized services for their customers to meet their digital-first, self-service demands. That way, their customers can have access to the most innovative, secure and convenient banking services possible.