ATMs: the key to serving the underbanked?

By : Scott Millar

September 04, 2014 10:30 PM

When banks have been a feature of our lives for centuries in many countries, it might be surprising that there is still a huge population with little or no relationship with them. The unbanked and underbanked populations of many regions remain high–especially in the developing world where earnings are low and the foundational infrastructure is only beginning to emerge.


Earlier this year, the ATM Industry Association (ATMIA) launched a forum dedicated to investigating how ATMs can help fill the void and offer financial services to those who are reluctant to use a bank. The approach is to drive financial inclusion by leveraging technology that’s already available as well as what might be on the horizon. It’s intended to speed up the development of new features that could revolutionize the way ATMs are used worldwide.


“The ATM is the perfect platform for linking traditional and non-traditional financial transactions,” said David Tente, US executive director of ATMIA. “And financial institutions, independent operators, networks and processors all share a very high level of interest in creating new solutions to serve this market.”


It’s something that is already happening in many ways. Cash and/or check deposits, together with payment transactions, now represent the bulk of activity carried out at a branch counter. New ATMs with intelligent deposit functionality and video-based solutions like “interactive teller” can provide a more teller-like experience and can support 95% of transactions that would typically happen across the counter today.


So, is the ATM the solution to serve the underbanked? It certainly has its advantages. The ATM is the more economical solution to reach that underserved demographic and create a presence in remote locations. Tente feels that the self-service approach to banking, which comes with ATMs, might work well for consumers who are reluctant to engage with banks through their branches. This creates a massive opportunity and indicates why non-bank ATMs and independent companies will play a significant role in supporting financial inclusion strategies.


Being able to pay bills, buy gift cards or even bypass card IDs altogether in favor of mobile or biometric authentication is likely to broaden the appeal of the ATM. But there will be plenty of technological challenges and hardware developments to explore while trying to drive financial inclusion. Nevertheless, the ATM will have a part to play and companies need to be prepared to adapt to its changing role.

Scott Millar

Global Solutions Marketing Manager

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Based out of NCR’s R&D Centre in Dundee, UK, Scott Millar is responsible for establishing the marketing strategies and enhancing the strength and market share of the NCR Financial Hardware Portfolio. Here, Scott shares his insights.