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Why big banks are in an arms race to upgrade the 50-year-old ATM

Big banks are investing heavily to reinvent a boxy machine that has gracefully reached middle age even as the industry turns its attention to young, hip technologies such as APIs, blockchains and artificial intelligence.

On the eve of its 50th birthday, the ATM is getting a face-lift.

JPMorgan Chase and Bank of America — which operate the industry’s largest fleets, each with more than 15,000 ATMs — recently began rolling out sleek machines with screens that look and operate like giant iPads. Several big banks in recent years have also launched a slew of features, such as the ability to withdraw large sums of cash, request multiple denominations, and conduct transactions using mobile phones instead of debit cards. Other options that integrate mobile banking are also in the works.

That ATMs have such staying power in the rapidly changing world of retail banking is somewhat surprising, especially considering that cash withdrawals have stagnated in recent years. But the latest upgrades show how big banks are using the trusty teller machines — once standard-issue gray boxes — to distinguish their brands and acquire new customers as traffic at brick-and-mortar branches continues to wane.

[…]But times are changing. Young customers, in particular, view convenience as simply having access to digital banking, according to Andrew Hovet, a director of retail marketing and distribution at Novantas. Placing high-tech — and modern-looking — ATMs in high-traffic areas is one way for banks to market their digital prowess.

“We use a phrase called ‘perceived convenience,’ ” Hovet said. “Big banks have done a great job of creating the perception that they have the best digital capabilities out there,” even if some smaller banks can match them “feature to feature.”

Read the full article on American Banker

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