By Wayne Malone
FCTI
Mobile is the latest buzzword for banks and credit unions. As a result, branches are closing, downsizing or being reinvented, and the entire banking industry has its sights set on the digital realm. This, of course, means ATMs are finally on their way out.
Except, despite ongoing calls for the death of cash and all things cash-related, ATMs aren't even close to becoming relics.
In an incredibly odd turn of events, consumers' rapid transition to mobile banking over the past two years has people viewing self-service systems as the standard for basic financial transactions. And this new banking environment includes ATMs.
The basics of banking are generally agreed to be account inquiries, money transfers, bill payments, deposits and withdrawals. These are the standard transactions performed in branches by bank tellers. And the introduction of mobile banking applications has successfully moved these financial necessities to a (usually) easy-to-use self-service platform.
Well, almost all of them. Mobile apps can't deposit or deliver cash, which is a big problem for financial institutions (FIs) looking to appeal to Gen Z.
Occasionally referred to as the "throwback generation," Gen Z (people born from 1996 to 2015) stumps experts at every turn. They are obsessed with new networks and technology, such as virtual reality and TikTok. But this same group is fascinated by vinyl records, Polaroid cameras, and other things they consider "vintage"—including cash (see, https://bit.ly/3Rh3FXN).
While a sudden inclination for cash may seem surprising, recent San Francisco Federal Reserve Bank studies show that Gen Z is more likely to pay with cash than older generations. According to Bloomberg (https://bloom.bg/3UHvkUF) 45 percent of Gen Z report preferring to use cash for everyday payments. But the fascination with physical payments goes beyond its "vintage" appeal.
When discussing their growing preference for cash, Gen Zers talk about how it gives them a way to feel more in control of their finances and avoid the credit card debt they have seen plague prior generations. This strategy is reflected on one of their favorite platforms, TikTok, where many videos show how to save and segment cash to budget for bills, daily expenses and even long-term goals.
So, how can banks and credit unions bridge the gap between mobile banking platforms and the cash withdrawals and deposits Gen Z craves? The answer can be found in yet one more "vintage" piece of technology, the ATM.
Millennials and Gen Z use mobile banking applications as their primary way to bank, according to CUInsight. But they realize there are certain things mobile apps cannot do, like provide access to cash.
ATMs, however, link into the same systems as their trusted mobile banking applications to offer fast access to physical currency—in locations that are convenient and easy to find. So, it should be no surprise that young adults between 18 and 34 visit ATMs to get cash over seven times per month (see https://bit.ly/3rajt41).
It's not just Gen Z that sees ATMs as a vital part of their banking experience. Consumers under 40 who are actively seeking a new primary bank list an accessible ATM network as a top consideration (see https://bit.ly/3CbPkrh). While older account holders might use the machines less often (around five times per month), they recognize the need for convenient access to cash for things such as budgeting, travel, person-to-person payments, emergencies and community events.
But implementing on-site and off-site ATMs as part of the self-service platform can do far more for FIs than cater to consumer demands. It can also save them money.
On a per-transaction basis, tellers cost more than a similar function performed at an ATM. The difference is so significant that some FIs are looking at charging a fee for using a live teller versus using a self-service banking option (see https://bit.ly/3LIINYx). But banks and credit unions don't have to charge fees to leverage what today's ATMs have to offer. They offer a range of additional benefits for FIs to increase account holder acquisition and retention.
Some of the most basic options include branded surrounds, on-screen messaging and printed receipt coupons. More advanced options might extend to digital topper advertising, digital receipts or mobile messaging. Leveraged appropriately by savvy FI marketers, all of these solutions provide banks and credit unions with invaluable ways to expand brand reach, increase awareness, and interact with current and potential account holders.
As FIs continue to phase out face-to-face interactions for basic financial services, ATMs are evolving to meet the needs that mobile and digital banking cannot. These versatile machines are being built for a variety of purposes that help banks and credit unions lower costs and improve accessibility for their communities and account holders.
Whether providing the cash access younger generations crave or supporting the FI brand's messaging and narrative, today's ATMs are becoming a critical aspect to meeting the needs and expectations of modern consumers. 
ATM and payments industry veteran Wayne Malone is president of FCTI Inc., a subsidiary of Seven Bank, Ltd. with over $8 billion in assets. Together, Seven Bank and FCTI manage over 30,000 ATMs worldwide. In his role, Malone is using his knowledge of payment processing, ATMs, digital money movement and person-to-person (P2P) payments to pivot FCTI to new growth. He can be reached at malonewayne22@gmail.com.
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