ATM Innovation to 2020 and Beyond by Mike Lee, CEO, ATMIA ATMs: 50 Years of Innovation with a Big Future Ahead. Loews Sapphire Falls Resort, Orlando,

Transcription

1 ATM Innovation to 2020 and Beyond by Mike Lee, CEO, ATMIA ATMs: 50 Years of Innovation with a Big Future Ahead. Loews Sapphire Falls Resort, Orlando, FL, USA February 15 th, 2017

2 Agenda 1. Icebreakers 2. By Emerging industry trends 4. ATMs Today a Position of Global Strength 5. The Future for ATMs 6. Conclusions

3 Icebreaker

4 Icebreaker ATMs literally at the ends of the Earth! Antarctica s ATMs are located inside the US scientific community of McMurdo Station, near the South Pole.

5 By bn devices and appliances connected through the Internet of Things (IoT) 4 million ATMs Mobile internet will be dominant with over 70% penetration, and app-based payments will equal browser-based payments for e- commerce (McKinsey) The global payments pie will have grown its revenues 6% p.a. to 2020 to exceed $2 trillion USD, with intense competition from internet giants (Google, Amazon, PayPal, Alibaba, etc.), technology giants (Apple, Samsung, etc.), global card brands, big banks, independent service-providers, social media giants (Facebook, WeChat, Twitter) and major retailers and retail consortiums

6 By 2020 NFC will be a dominant platform and technology enabler, with an estimated 2.2bn NFC-enabled phones Many countries will have converted to faster payment systems Cards will still be a dominant payment method but may be approaching Peak Card between Currency in circulation will be growing globally at between 5-8% p.a. There will be zero cashless societies in the world

7 Emerging industry trends Cardless cash for the mobile-digital age Some banks plan to eliminate cards for ATM transactions due to skimming, captured cards and other card data compromises Convenience of on-demand digital experiences like Amazon orders and Uber point to need for frictionless technology experiences at ATMs, including faster, easier transactions with digital ATM receipts Meeting consumers where they are Quick Easy Convenient Secure

8 Emerging industry trends Digital wallet transactions at ATMs Major banks are implementing NFC at US ATMs to enable wallets like Android Pay, Apple Pay and Samsung Pay to transact at ATMs Deploy the 2 nd (NFC) card reader at the ATM, with additional coding & messaging for recognition by Host as NFC transaction, as oppose to standard magstripe or EMV transaction, with different CVN cryptograms for each wallet provider Card Network support to route on-us ATM Acquirer transactions for digital wallet transactions Visa and MC do not support OFF-US ATM Acquirer digital wallet transactions at this stage but this is a question of when, not if Some banks have created their own app, e.g. CashTap; app comes alive as approach ATM, tap phone on machine for cash dispense for both beacon and NFC range

9 Emerging industry trends Meet Irving the Headless ATM No PIN pad No card reader No screen NFC, QR code or biometric authentication Fast cash in under 10 seconds (Bolt's 9.58 seconds best is the world record for 100m), with current average ATM transaction is 42 seconds (according to Advertising Age)

10 Emerging industry trends Where digital money meets cash Where the bank meets the customer The technological meeting point Where hightech meets the high street Where channels meet Where the past meets the future

11 Emerging industry trends As you walk past an ATM, the ATM detects you and triggers your app: An ATM is close, need some cash? Akbank bank app for an Apple Watch enables customers to access statements, locate nearest branch and draw cash from ATMs via SMS Pass or ibeacon.

12 Emerging industry trends Migrations to new operating systems for the 2020s: W Roadmap Alternative operating systems for future ATMs Android Linux WinCE 2023 Roadmap Manufacturers are most likely to choose between Linux, Android, W10 & W10 IoT Core to shape the operating environment of ATMs for the post 2020 world.

13 Emerging industy trends 2020 Roadmap specifications complete, based on a recommendation to migrate from W7 to Windows 10 IoT Enterprise, awaiting vendor commitments and delivery dates for W10 pilots later in Study of alternative operating systems, covering growing interest in the Linux open source system, with over 20% of ATMs in Brazil already on Linux and a major deployer in India selecting Linux, due to lower maintenance, and gearing up for a pilot phase. Android ATMs are also being extensively piloted. Industry RFI for Next Generation ATMs a gift to the 50 th anniversary of ATMs.

14 Emerging industry trends Studies on Cloud ATMs to gain a clearer picture of a future model of the ATM, including the whole software stack. Cloud ATMs 2 to analyse how the industry can migrate to the Cloud on a large scale and what standards might be needed for that to happen. Another goal would be to gauge interest levels among deployers, especially banks, across the world. Windows CE Positioning Paper, has been published and a new Windows CE 2023 Committee group has begun to draw up a 2023 Roadmap for around 15% of world s installed base.

15 Emerging Industry Trends US payments 2016 Paper checks still account for trillions of dollars of consumer payments yearly in the USA a 2016 study by Tremont Capital for ATMIA estimates checks will account for 7.5 billion consumer payments in A very small percentage of US consumers actually use mobile payments frequently today; there is no mass adoption of the technology as yet. Cash is still the most used form of payment for US consumers. Cash as a percentage of total transactions is slowly declining as the total consumer payment pool expands, but the study estimates cash accounts for 45% of payments by volume of transactions in 2016.

16 Emerging Industry Trends Mobile access, i.e. cardless Digital receipts (text or ) Interactive table-top touchscreen for cheque imaging, ID scanning, & document signing Video teller access Privacy panels Single-slot cash interface

17 ATMs Today a Position of Global Strength Great locations! Ease of access & simplicity of use! Global ubiquity! High trust levels! High security levels and best practices! Transformed from Automated Teller to Value-Added Touchpoint! Part of branch transformation! Part of omnichannel banking! Cross channel friendly!

18 ATMs Today a Position of Global Strength Growth in ATM installations forecast to be 37% between , to reach 4 million ATMs by 2020 (Global ATM and Market Forecasts to 2020, RBR) A new ATM is installed every 2 mins, 47 seconds! (source: RBR) Number of cash withdrawals grew 10% in 2015, up from 7% in 2014 & are forecast to grow 40% between , increasing from 92 bn withdrawals to 128 bn by 2020 (Source: RBR) 99 billion cash withdrawals made worldwide in 2015 (Source: RBR) Potential growth of banked population with 2 bn still unbanked, including about 38% of adults financial inclusion will drive up global ATM usage

19 ATMs Today a Position of Global Strength Increased added-value services in addition to its 5 core functions, advanced ATMs can handle types of transactions Global cash demand is high grew at 8.9% y-o-y during , more than double the GDP rate Card friendly but ready for the cardless future! Deposit automation 31% of ATMs worldwide include automated deposit functionality (ADTs); automated deposit and recycling ATMs make up 40% of global shipments (RBR) wave of growth predicted for cash recycling Ready for digital wallet transactions!

20 The Future for ATMs

21 The Future for ATMs Drivers of our future : Mobile internet The Cloud Mobile payments: P2P payments, Contactless transactions, m- commerce NFC Role of cash as trusted public money Reconfiguration of branch and ATM Real-time payment systems for faster payments Customer experience for the connected digital consumer Financial inclusion Environmental impacts

22 The Future for ATMs The future of the ATM depends on consumer trust, cash demand and continued technological evolution as a customer touchpoint Cash has a long past and a long future Uber Cash

23 The Future for ATMs Over 50 years after this media announcement of cash s demise, cash remains the world s most used payment method! 1963 comedy film The Man from the Diner s Club starring Danny Kaye ATMIA is seeing a great disconnect in many advanced economies between declining cash transactions and increasing value of cash in circulation. Cash plays a dominant role for small-value transactions, is the leading payment instrument for many types of purchases, and stands as the key alternative when other options are not available. Cash Continues to Play a Key Role in Consumer Spending :Evidence from the Diary of Consumer Payment Choice Cash Product Office, Federal Reserve, April 2014

24 The Future for ATMs From young markets with large unbanked populations, to the most sophisticated where consumers can choose from an increasingly wide array of banking channels, the ATM remains a vital touchpoint between banks and their customers. Dominic Hirsch, Managing Director, RBR (October 2015)

25 The Future for ATMs ATMs have become far more than machines that dispense cash. They are portals into a full array of technologies that let people bank anytime and anywhere. ATMs are now at the forefront of omnichannel technologies that are redefining the digital economy. Bill Nuti, CEO, NCR (2016)

26 The Future for ATMs The underlying power of the ATM Adaptable - the ATM has survived decades of competing technologies and has ended up absorbing them, welcoming the technologies, from the credit card to the smart phone, and enabling them to be used at the ATM Persistent demand for cash Ubiquity Value-add services Critical customer touchpoint in an era of bank closures, in which the ATM can do virtually everything the bank branch can do, and at a much lower cost Future-ready - ready for cardless, for the Cloud, for channel integration, for mobile integration, for consumer convenience, for digital currency and for the Internet of Things

27 Conclusions : 50 years of the ATM 2017 will celebrate the 50 th anniversary of the ATM: Can we even imagine a world without ATMs? There s no current plausible scenario for a world without ATMs. The ATM has successfully reinvented itself for its next phase of development in the faster, more mobile world of tomorrow.

28 Thank you! Q & A mike@atmia.com