Why smart ATMs could be the future of banking

Introduced in the 1960s, ATMs are due for an upgrade

Smart ATMs enable the use of innovative technologies that can offer customers a better service, while also reducing fraud.

By Libby Plummer, Technology Writer

As the banking sector continues to transform, the trend for contactless payments gathers pace, accelerated by the COVID-19 pandemic. The key channel for retail banks is now online and mobile, while Automated Teller Machines (ATMs) have gradually become the second most important channel. First introduced in the late 1960s, ATMs have seen plenty of upgrades over the decades, but to keep up with the pace of digital transformation, they need to get smarter.

While still providing an essential service for customers, ATMs can be incredibly expensive for banks to maintain. If anything goes wrong, this requires at least one visit from a technician, and usually a security guard to ensure that the ATM is secure while it's being serviced. The key benefit that next-gen smart ATMs can offer to combat this is remote management.

Intel® Active Management Technology, part of the Intel vPro® platform, enables IT teams to securely manage devices remotely. "We are seeing many financial institutions that are using this technology to manage their ATMs," said Bruno Domingues, Principal Solutions Architect, Financial Services Industry, Intel. "If you have connectivity and you have power, you can access the ATM remotely. You can do this if the disk has crashed or if the Operating System is corrupted, and you can even reinstall the OS remotely. This helps banks to keep downtime to a minimum and reduces the costs of maintaining ATMs".

Smart ATMs enable the use of innovative technologies that can offer customers a better service, while also reducing fraud. For example, one bank in in Russia is already starting to use facial recognition featuring Intel® RealSense™ camera technology to ensure that the person withdrawing the money is the person that the card belongs to. This works as a second-factor authentication for more sensitive transactions or the sole factor for less risky transactions, such as withdrawing a small amount of money. This kind of biometric authentication could potentially replace the need to carry a cash card.

As banks continue the move to digital, some important issues have emerged. "One of the key challenges is synthetic identity fraud, where criminals can fabricate an entirely new identity," said Domingues. "This enables them to take out loans and withdraw money, with no link to a real individual. In the past, they would have had to steal the identity of a real person, but with the digital tools available to them, they can create an identity that financial institutions believe to be real. So, it’s really important to remember that ATMs can be used to prove the identity of a person for on-boarding and validation against synthetic identity frauds.”

For this reason, many banks still require ID checks to be done in person at a physical branch. This is also the case for many teenagers opening a bank account for the first time if they have no digital footprint. However, with a desire to move to an entirely digital system, the banks want to move away from the necessity to carry out ID checks in a branch. This is where smart ATMs could provide a more economical alternative – using biometric authentication to confirm the new customer's identity.

As banks and financial institutions continue to transform and adapt to the new reality and evolving customers expectation, it’s clear that there’s still an important role for ATMs. Intel-powered technology is already beginning to help banks upgrade their ATMs for the digital era, saving them money in the long-term while helping to boost the customer experience and combat fraud.