Lloyds Banking Group Archives & Museum,
Subsequent time you withdraw cash from a gap within the wall, contemplate singing a rendition of completely satisfied birthday. For on June 27, the Automated Teller Machine (or ATM) celebrates its half century. Fifty years in the past, the primary money machine was put to work on the Enfield department of Barclays Financial institution in London. Two days later, a Swedish system generally known as the Bankomat was in operation in Uppsala. And a few weeks after that, one other one constructed by Chubb and Smith Industries was inaugurated in London by Westminster Financial institution (right this moment a part of RBS Group).
These occasions fired the beginning gun for right this moment’s self-service banking tradition – lengthy earlier than the widespread acceptance of debit and bank cards. The success of the money machine enabled folks to make impromptu purchases, spend extra money on weekend and night leisure, and demand banking providers when and the place they needed them. The infrastructure, programs and information they spawned additionally enabled bankers to supply their prospects level of sale terminals, and phone and web banking.
There was substantial media consideration when these “robotic cashiers” have been launched. Banks promised their prospects that the money machine would liberate them from the shackles of enterprise hours and banking at a single department. However prospects needed to discover ways to use – and keep in mind – a PIN, carry out a self-service transaction and belief a machine with their cash.
Individuals take these items without any consideration right this moment, however when money machines first appeared many had by no means earlier than been in touch with superior electronics.
And the system was removed from excellent. Regardless of widespread demand, solely financial institution prospects thought-about to have “higher credit score” have been supplied the service. The early machines have been additionally clunky, heavy (and harmful) to maneuver, insecure, unreliable, and infrequently conveniently positioned.
Certainly, in contrast to right this moment’s machines, the primary ATMs may do just one factor: dispense a set amount of money when activated by a paper token or bespoke plastic card issued to prospects at retail branches throughout enterprise hours. As soon as used, tokens can be saved by the machine in order that department employees may retrieve them and debit the suitable accounts. The plastic playing cards, in the meantime, must be despatched again to the shopper by put up. For sure, it took banks and know-how corporations years to agree widespread requirements and eventually ship on their promise of 24/7 entry to money.
The globalisation impact
Estimates by RBR London concur with my analysis, suggesting that by 1970, there have been nonetheless fewer than 1,500 of the machines around the globe, concentrated in Europe, North America and Japan. However there have been 40,000 by 1980 and one million by 2000.
Various elements made this ATM explosion attainable. First, sharing areas created extra transaction quantity at particular person ATMs. This gave incentives for small and medium-sized monetary establishments to speculate on this know-how. At one level, as an example, there have been some 200 shared ATM networks within the US and 80 shared networks in Japan.
In addition they turned extra well-liked as soon as banks digitised their information, permitting the machines to carry out a number of different duties, akin to financial institution transfers, stability requests and invoice funds. During the last 5 many years, an enormous variety of folks have made the shift away from the money economic system and into the banking system. Consequently, ATMs turned a key approach of avoiding congestion at branches.
ATM design started to accommodate folks with visible and mobility disabilities, too. And in latest many years, many international locations have allowed non-bank corporations, generally known as Impartial ATM Deployers (IAD) to function machines. The IAD have been key to populating non-bank areas akin to nook outlets, petrol stations and casinos.
Certainly, whereas a big financial institution within the UK would possibly personal 4,000 units and one within the US as many as 12,000, Cardtronics, the most important IAD, manages a fleet of 230,000 ATMs in 11 international locations.
Financial institution to the long run
The ATM has remained a related and handy self-service channel for the final half century – and its historical past is considered one of invention and re-invention, evolution quite than revolution.
Self-service banking and ATMs proceed to evolve. As a substitute of PIN authentication, some ATMS now use “faucet and go” contactless fee know-how utilizing financial institution playing cards and cell phones. In the meantime, ATMs in Poland and Japan have used biometric recognition, which might establish a buyer’s iris, fingerprint or voice, for a while, whereas banks in different international locations are contemplating them.
So it’s time to contemplate what the historical past of money dispensers can educate us. The ATM was not the results of a eureka second of a single middle-aged man in a shower or storage, however from lively collaboration between varied teams of bankers and engineers to resolve the numerous challenges of a altering world. It took 20 years for the ATM to mature and acquire widespread, worldwide acceptance, however right this moment there are 3.5m ATMs with one other 500,000 anticipated by 2020.
Analysis I’m presently enterprise means that ATMs might have reached saturation level in some Western international locations. Nevertheless, analysis by the ATM Trade Affiliation suggests there may be sturdy demand for them in China, India and the Center East. The truth is, whereas within the West folks have a tendency to make use of them for 3 self-service capabilities (money withdrawal, stability enquiries, and buying cell phone airtime), Chinese language prospects shoppers recurrently use them for as many as 100 totally different duties.
Taken without any consideration?
Apparently, folks in most city areas around the globe are inclined to work together with the identical 5 ATMs. However they shouldn’t be taken without any consideration. In lots of international locations in Africa, Asia and South America, they provide providers to tens of millions of individuals in any other case excluded from the banking sector.
In most developed counties, in the meantime, the retail department and the ATM are the one two channels over which monetary establishments have 100% management. That is vital when you might want to confirm the authenticity of your buyer. Banks don’t management the make and mannequin of their prospects’ good telephones, tablets or private computer systems, that are weak to hacking and fraud. Whereas ATMs are focused by thieves, mass cybernetic assaults on them have but to materialise.
I’m usually requested whether or not the arrival of a cashless, digital economic system heralds the tip of the ATM. My response is that whereas the world would possibly get rid of money and name ATMs one thing else, the revolution of automated self-service banking that started 50 years in the past is right here to remain.
Bernardo Bátiz-Lazo has acquired funding to analysis ATM and funds historical past from the British Academy, Fundación de Estudios Financieros (Fundef-ITAM), Charles Babbage Institute and the Hagley Museum and Archives. He’s additionally lively within the ATM Trade Affiliation, consults with KAL ATM Software program and is a daily contributor to www.atmmarketplace.com.