Wednesday, December 19, 2018

ATMs - going the way of FAX machines: Maybe? Maybe, not!


The ubiquitous ATM has been around a very long time but it is morphing to better serve the changing needs of its users. What’s not changing is the rise in transaction volumes from ATMs and equivalents and this is good news for NonStop!



There is so much about Sydney’s shopping and banking scene that continues to raise an eyebrow or two, especially for those stalwart Aussies who just happen to have been out of the country for an extended period of time.  There has been so much published in the local press about the shameful pursuit of business by all the major banks, with a Royal Commission set up to examine business practices that today have found bank executives wanting when it comes to integrity and honesty. The axe has fallen on some of them even as others have taken extended leave over the holiday season. However, moving past the flamboyant headlines there is so much that is taking place with banking that it’s no exaggeration to say that more mature markets like the U.S. seem hopelessly behind the times.

One example worth referencing is the Opal card – a single method payment for all state-run transportation, whether that involves a train, a bus or a ferry. It’s a tap-and-go implementation with the ability to register the card and have it automatically topped up from you credit card. But more importantly, and Margo and I have come to appreciate it in the time we have been in Sydney, it is supported by a very flexible pricing model. You use the card and in time, fare prices drop. You stop at one railway station to pick up a magazine and when you return for further legs by train, you find out that it’s all just an extension of your original trip. Use a whole lot of money early in the week and by mid-week, the price you are charged drops dramatically. Switch from ferry to train and again, it’s just a continuation of the original trip.

And this is important in a place like Sydney which is fundamentally being ripped apart as its infrastructure is significantly updated. Forget Elon Musk and his “boring company”. The sandstone plateau on which Sydney is built is being riddled with tunnels for trains, light rail and freeways / toll roads. So much so that it brings to mind that quote attributed to someone or other and understood to be a reference to Paris in that Sydney too will be great when it’s finished!

On the other hand, as once former banking head offices become homes to fashion shops and around the Central Business District (CBD) insurance head offices become hotel / apartment towers, the changes taking place across Sydney reflects a repurposing of the city as its urbanization continues To this end, the “city dwellers” concept is something new for most Australians and the services they need and the timeliness of delivery of any such service is accelerating to where it’s now a city of walk-up, press the buttons and all impulses are satisfied immediately. No time to waste, naturally enough!

There is no escaping the presence of the changes occurring at the bank branch office. Gone are the branch-wide counters separating bank staff from their customers. Gone too are any of the traditional trappings of banking as we knew it just a short time ago. The humble ATM is being transformed to where it has become a de-facto branch teller, where every manner of transaction is supported. In-wall terminals tailored to support specific functions, including the handling of coins, the processing of even the smallest of merchant’s needs such as the local convenience store, and every imaginable combination of accounts management are visible everywhere.

The customer, fresh from the supermarket, is at ease interacting with these devices just as they are ordering MacDonalds from a free-standing terminal or interacting with the self-checkout terminals on departure from the supermarket. And yes, wheeling their trolleys “next door” to the bank seems to be a logical next step in shoppers’ deliberations along the shopping byways within the city.

Recently I was told by one banking industry insider that the humble ATM was headed to the same destination as FAX machines – nothing more than a footnote on the technology roadmap of once-loved devices. However, the more time I wonder the streets of Sydney, the more I think such pundits may be missing the point – ATMs too, like their patrons, are evolving. What was once a priority when all that was needed was cash is now secondary to the need to self-manage our accounts moving money to where interest earned is best even as we cover expenditures incurred with the transfer of value, be that the purchase of a melon, a watch or an airline ticket.

ATMs are nothing more than touch points that we are finding useful when there is more involved than simply banging away at keys on our mobile phone. Yes, mobile phones are changing the way we interact with banks and other financial institutions but trying to absorb information from multiple accounts and the options on offer for each of them as we struggle with groceries while surrounded by society at large is not the preferred choice of many bank customers.

One outcome from all of this – we all are doing banking on an almost daily basis. Our daily interaction with financial institutions has grown significantly over the past couple of years. Perhaps it’s a byproduct of the Global Financial Crisis of a decade or so ago where we just don’t want to be caught out. Perhaps it’s even a byproduct of our heightened interest in managing our retirement accounts given how so many countries have thrown the responsibility back into our own laps. Perhaps too it’s simply that technology has made us want to stay on top of things we view as important and maybe knowing our true financial position on a daily basis is important to us. Bottom line though is the number of transactions everyone is doing is on the rise and for the NonStop user, this is important as NonStop’s presence on the front lines of transaction processing will only become greater with time.

There will always be new approaches to banking developed, all aimed at ensuring we stay plugged into our favorite banks network even as we continue to give them our money (for safe keeping). While in Sydney I heard all about the efforts Aussie bank Westpac is putting into wearables as it unveiled a new ‘PayWear’ wearable payment accessories. Don’t carry your wallet – wear it! Or, so the tag lines go. “Westpac customers will soon be able to tap-and-pay hands-free with the waterproof and battery-free wearable, which includes a silicone band and a ‘keeper’ that can be easily attached to an existing watch or fitness band.” So not only is the ATM looking like it will share the same fate as the FAX machine but perhaps so too will the mobile phone as a platform for interacting with financial institutions, but then again, are we truly looking at the end of the ATM product lifecycle?

Just like Sydney’s ever-changing infrastructure projects, today’s networks and terminals on which we rely almost daily will continue to evolve. Our choice of device for such interactions will be always one of individual preference and it is being driven by the functionality supported. With such payment instruments as the Opal card, Sydney-siders are getting used to not needing as much cash as they once carried even as cash is still in wide circulation – having discarded the one and two cent coins, is the five cent coin following a similar trajectory and facing extinction?  It’s not all that difficult to imagine, even the Opal card being one more supported payment method may integrate with our wearable. Point is, irrespective of where it’s all heading, transactions demand processing and NonStop still reigns supreme when it comes to true 24 X 7 support for mission critical applications.

At one time, NonStop supported FAX machines and may still do so in some markets  and the breadth of communications protocols and services NonStop has been able to support through the years is a clear indication that nothing new in this regard fazes the NonStop development team. I am thinking that ATMs being just automation in one guise or another will be with us for many years to come. It will parallel developments of mobile devices including wearables and it will continue to evolve to include tighter integration with POS and with Kiosks and yes, every possible instrument supporting gambling of every type. If there is one last observation to be made about Sydney-siders it’s the love of having just a little flutter on the horses as the recent Melbourne Cup illustrated so well.

As a community, the real challenge for NonStop and its meeting the rising demand to process transactions is where exactly NonStop systems of the future will be stationed – closer to the core or out on the edge? Should the requirement of NonStop be its data base then an argument can be made for NonStop to be closer to the core but when it comes to transaction processing, the future will likely see NonStop running virtualized on commodity hardware out at the very edge. This makes all the recent moves taken by the NonStop development team make even more sense as there really will not be any restriction as to on what platform NonStop will be deployed out at the edge.

A completely new age for NonStop just maybe around the corner and who knows; every financial institution may have NonStop everywhere financial transactions are captured and wouldn’t that make heads turn across the IT landscape. Possible? I believe we are much closer to achieving this than you may think. Happy holidays; and keep those transactions coming! 

3 comments:

Anonymous said...

Agree with Richard.
ATMs are not going away any time soon. However we will see transactions from mobile devices and APIs in Open Banking increase in volumes.
Yash, CEO OmniPayments

Craig Lawrance said...

I'm happy to report that FAX machines are extremely underestimated, and still in demand from certain quarters. Our UK National Health Service (NHS) ordered a vast number of them last year.

I don't see ATMs disappearing anytime soon either. Cash still has many benefits and will remain tradeable between humans for a long time. As the only anonymous method of transacting, and for many the only way of budgeting from day to day, Cash will hang around for a while yet!

Craig, VP Business Development, OmniPayments

Lee Jeffery said...

As a Tech in Darwin its interesting to hear all the hype about whether ATMs will stay. The recent debacle with the abolishment of ATM fees has seen the reduction of "offsite" bank branded ATMs which raised cause for concern. Its interesting to see that people stll use ATMs though and they dont look like they are going anywhere anytime soon.
Certainly an expansion into more services at an ATM is required i think. People still have a phobia about paying bills online but they are happy to do it at an ATM. Certainly CBA's recent barcode reader add on was a good idea. Maybe QR code scanners as well might be available. Also international transfers at an ATM might be an idea given the vast multicultural society we have, most of whom send money back home to help support family members etc. They are almost endless possibilites I think.
I am actually moving to the USA at the end of 2019 and it seems that ATM tech jobs are in reasonable abundance and I am looking forward to seeing differences between Australia and the US with regards to ATM servicing and maintenance capabilites etc.
Great post Richard, its all food for thought.

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