If your bank is like most, you routinely review and update your short- and long-range planning. Perhaps you now have a Quick Response Team or Emergency Task Force. The pandemic forced some rapid responses that disrupted some mid and long-range plans. But maybe that’s a good thing.
When planning, some of us may look at what larger banks do and use that as a barometer. It is easy to see what the big banks are doing. Daily, the news networks show C-level banking officers discussing reach, brand, digital, branches, markets, etc. If only they talked to community banks regularly to discuss their outlook and what they are doing for their communities and customers during this changing environment. But that’s a subject for another article.
Did the pandemic show us what our customers did not need? Or did it show us what they absolutely had to have? Probably a little of both.
Consider your branch and transaction volumes. A 2020 MetaBank survey reported that transaction volume slipped more than 30% at some branches. By and large, it appears most branches are down in monthly transactions by at least 10%. Where is this traffic going? Well, everywhere else but inside the branch.
As a leading provider of ATMs across the U.S., Dolphin Debit saw unique data across its ATM fleet. The off-premises ATM locations (those ATMs not tied to a branch) saw transaction volumes decline consistent with the industry during the most severe lockdown periods, which makes perfect sense. These ATMs are in county and city buildings, hotels and commercial offices, the exact locations experiencing significantly less traffic due to the lockdowns.
However, branch ATMs were a completely different story. Some branch ATMs encountered a significant increase in year-over-year transaction volume. Overall, the branch ATMs we manage for our clients were barely under their 2019 volumes. While in-branch transactions slipped by more than 10%, ATM transactions were only slightly off.
What this tells us is that the branch location still matters to the customer. Knowing this can help shape your bank’s branch and ATM networks for the future. We have heard about micro-branch strategies for several years, and have seen an increase in functionality at the ATM. These two concepts connect very well.
The other significant change we see is with ATM deposits. More and more, banks are adding deposit functionality at their branch ATMs, giving customers a fast and secure option to get money into their accounts. Many of our clients discuss upgrading from cash dispense-only ATMs to full function automated deposit ATMs as part of their ATM upgrade/replacement strategy.
The steadiness of cash withdrawals and rise in automated deposits confirm that ATMs are an essential piece in the branch evolution and eService landscape. Even as the acceptance of digital and online payments grows, people still want access to cash to use for payments. Not everyone has or will adopt digital payments. You can and should continue to provide customers with multiple channels for access and use of their money.
As part of your evolving strategy, consider outsourcing your ATMs. Outsourcing will help you keep operational costs and capital expenses to a minimum. It will also free staff to focus on the customer. Adding more functionality to the ATM increases your time and costs. Outsourcing helps mitigate this, and it can create mobility in your fleet to adapt to the rapidly changing environment.
